Tuesday, April 24, 2012

The Secret Lives of Dentists

Here is a guest post from our good friend Morgan Pace of ETS Dental, the best dental recruiters we know of.

The Secret Lives of Dentists

I remember the first time that I ran into my family dentist in town rather than in his office. I was a teenager at the time, so I should not have been shocked that my dentist had interests other than plaque removal and collecting issues of highlights. In reflecting on this incident I got to thinking. What do dentists do when they aren’t in the office?

As a grown up (sort of), I now have the answer.


I am a recruiter who focuses on finding associates, partners or buyers for dental practices around the country. As such, I have access to over 30,000 CVs and resumes saved in our computer system. Using our software’s keyword search functionality I was able to query the system for key words as they appear in the Hobbies and Interests sections of those documents. Keep in mind, only 10% of CVs or resumes list personal hobbies or interests. Also, certain keywords (running, reading, writing) appeared too often in job related descriptions and so are not included. Still, the results are fascinating, even if not altogether scientific.


Dentists are an active, open minded group. Over 90% list travel as a key interest or hobby. Of course, the dental industry magazines are filed with ads for CE events in exotic and otherwise beautiful locations, so this comes as no surprise.

Dentists are also avid participants in sports. 30% list an interest in “sports” while those who mention specific sports prefer Golf (18%) over Basketball (17%) and Tennis (16%). Others of note: Soccer (12%), Football (10%), Volleyball (7%), Baseball (5%) and Hockey (3%). Cricket comes in as a statistically irrelevant 1%. Incidentally, Yankees fans mentioned their team by name more than Red Sox fans by a 5-4 margin.

Outside of traditional sports, Dentists also enjoy skiing (14%), swimming (14%) and long walks on the beach (13%). Yoga trumps Aerobics and Pilates 4% to 1.4% and 1%, respectively. 9% enjoy camping while 6% garden and 4% appreciate the outdoors in general.

The arts are clearly an important outlet. Painting is the preferred release of 9%. 2% prefer poetry. Music is listed by 23%. Dancing occupies the evenings of 7% while 4% prefer to play guitar and 3% like to sing. Those 3% are brave souls - karaoke received a scant 6 total mentions. Presumably that 3% sing sober, but 2% of dentists enjoy wine enough to mention it on their CVs. Only one claimed to be a “partier”. 18% enjoy cooking and 5% confess to shopping.

Collecting is a passive hobby. 1.1% collect coins, .8% collect stamps and .4% collect antiques. 7% prefer to spend their quiet time watching a good movie.

Horseback riding stimulates 3.7% of dentists. 3.4% prefer to drive with 1.2% of those enjoying a good race. Safety first, though. Fast cars (3%) are preferred to motorcycles (.5%).

Companionship is important to all of us. While a keyword search of “family” returned too many unrelated results, it was also an extremely popular mention. Pets are also popular with dogs preferred over cats by more than 3-1.

While not representative of most dentists, we have also spoken with a dentist who enjoys clamming, one who writes musical compositions for Wii games, one who was a “Who” in a movie and one who performed with Men Without Hats.

It is not all lab coats and fluoride. Clearly dentists do have a life outside of practice. The logical follow up question: How many of the above activities are claimed as a business expense?

Tim Lott, dental CPA, responds: As many of them as possible as long as there is good documentation as to the business purpose.

For more information, please contact info@dentalcpas.com

Tuesday, April 17, 2012

Dental Employee Exit Interviews: Tell Us How You Really Feel

We've had several of our friends in the dental community inquire about how to best release an employee. We asked our friend (and employment lawyer) Nicole Windsor from Bowie and Jensen law firm to write this guest blog for us.
Handling employee departures like a pro takes practice, but the difference to your company can be significant.
Each employee departure is unique and provides an opportunity to learn about your organization’s strengths and weakness. This is especially true in the case of resignations.
As such, requiring all departing employees participate in an exit interview is a good investment of time. During an exit interview, an employee can be questioned about the reasons for the departure, including problems in the workplace such as lack of innovation, poor opportunity for advancement as well as perceived discrimination, harassment, bullying or other inappropriate conduct.
Collecting this information allows an employer to assess the risk of potential employment litigation involving the departing employee and others. If an employer learns that a departing employee is considering filing a legal complaint, the employer should address the employee's concerns immediately, to the extent possible. Prompt action may help avoid litigation or help protect against liability if a complaint is filed.
Exit interviews are also an excellent time to remind employees of any post-employment covenant obligations such as confidentiality, non-competition, non-solicitation of customers and no raiding of company employees. These interviews also provide an opportunity to discover risks relating to confidential and trade secret information. This can be done by asking about the employee's future plans. If the employee is joining a competitor, an assessment can be made about the likelihood the employee will violate any applicable non-compete or non-solicitation agreements, or misappropriate confidential and trade secret information.
Based on the information collected (and taking into consideration the company’s treatment past employees) consider whether a severance agreement and release is appropriate. Employers buy a measure of certainty when they secure a full release in exchange for the payment of severance or other benefits to which an employee is not otherwise entitled. While employees cannot release their right to file an Equal Employment Opportunity Commission complaint, they can release their right to any individualized relief. This means, among other things, they cannot seek money damages for any released claim. Releases generally cover anything relating to the employee’s employment or termination from employment.
Finally, exit interviews provide an opportunity to manage the employee's expectations. A smooth transition is more likely when employees have basic information such as the date to expect a final paycheck, and the status of any bonus, commission or incentive pay. Employers should also notify employees as to any payment for accrued and unused paid time off. Finally employers should notify employees when their benefits coverage will terminate and whether they are eligible for COBRA and when to expect to receive a COBRA notice. 
For more information please email Nicole Windsor or call her at 410-583-2400.

For more information, please contact info@dentalcpas.com

Wednesday, April 11, 2012

Dentist Has Questions About S-Corp

I'm starting a new associate position in the near future and the owner and I were discussing being paid as an employee vs. me forming my own S-Corp having my compensation run through the corporation. The situation is:

Expected per diem income totaling about 140-150k. He owns 2 offices
He has agreed to reimburse about 5k in dues, liability, uniform, etc.
He would reimburse $400 per month towards health insurance. I would not be eligible for the office retirement plan.

My wife is a GD buying into a practice so that ends up putting our combined income into the AMT zone so we lose out on all types of deductions (her partners are very conservative, and don't run much through the office).
If she's buying in why can't she do her own thing as a part owner? There are ways to protect the other partners if one of her deductions is tossed out by the IRS.

Obviously, if I formed a corporation I would then be responsible for all of the SS/Medicare taxes, but I'm trying to figure out if I can make up for that with business deductions within the corporation.  For example:
  • We will need to either purchase or lease a new car since ours is on its last legs
  • The mileage on said car, since I need to travel to/from the bank on behalf of the corporation and between the two offices
  • I will need to get my own health insurance for which the premiums will be deductible
  • CE courses and dental meetings
  • Meals and entertainment for referring offices (I'm an ortho and my wife is a referrer. I need to keep her happy to keep the referrals coming!)
  • Various unreimbursed business expenses that I would not be able to deduct as an employee due to the AMT
  • Charitable donations made via the corporation
  • Marketing and office supplies 
  • The biggest benefit I can see is the ability to put money away pre-tax in a qualified retirement plan.  I'm not sure if I could get away with the "I hired my wife as a consultant and used her salary to fund her retirement"

I'm trying to figure out if it would be worth it in the long run.  Losing out on all those deductions because of the AMT is tough.You need to "run the numbers" and do the math. All the things you mentioned are fine, however, if it totals $3,000 vs. $30,000 makes a HUGE difference in the analysis doesn't it?

And it's not helping that my wife's partners are so ultra-conservative you'd think they work for the IRS!

I’m still not getting why your wife’s partner’s tax position comfort zone should impact your wife’s?

Either that, or just be an employee and save all the headaches... 

KISS, there's something to be said for that theory! Especially if your employer is willing to work with you on YOUR professional expenses!

Some of your assumptions are wrong but the thing that stood out to me was that your wife is not buying into the partnership correctly and this could potentially cost you hundreds of thousands of dollars. Or you are not explaining her relationship with her partners correctly.

I'm still looking for the question that Jason answered...

The books for the practice are done by the CPA who leases the first floor of the building from the real estate corporation owned by my wife's 3 partners (she's buying into the practice only first.. then the real estate in the future).  The CPA manages payroll as well as all the day-today accounting.  The profits are divvied up based on a formula of percent ownership and days worked.  Any "perks" that are run through the office are brought to the accountant downstairs and deducted from the "bonus" paid to the doctor.So why not hand the accountant the professional expenses you want to "run through" and tell them to deduct it from the bonus and code them to the appropriate business category. Remember, they work for you. That said, if they say it can't be deducted pre-tax ask them why and if you don't like the reason seek a second opinion.

There are so many things we could be running through the office, but it just doesn't happen.  For example, the landscaper who does our home landscaping is the same one who does the office, yet we pay for our home landscaping with post-tax dollars from our checking account... it's frustrating!!
I'm not going to touch that one...

Then add to the fact that my wife, for some unknown reason, is never allowed to put the maximum amount away in a retirement plan ($44,000 or whatever it is now).  She's allowed to put the $17,500 plus whatever the office matches (although it is higher for her as an owner, so it ends up around $30k or so).  Unfortunately I know nothing about retirement and how this works, and even when I've asked our personal accountant, he can never give me an answer and just seems uninterested in explaining it to me.
Well there are retirement plan rules that employers have to abide by and I suspect they're handling the retirement plan correctly. However, that doesn't mean that there may not be a better plan for their practice.

Uhh. . .this doesn't make me feel any better about your wife buying into this partnership.  Has it happened already?  How is she buying in?  It smells like she is buying into a single entity partnership.  There are MAJOR issues involved in this, with the first one being that the value she is paying is based on an asset sale price, which means that she is possibly overpaying 20-35% of the purchase price!!!

Hopefully she has not acquired anything yet and you can begin to speak to people who know how to handle this type of situation (read: dental attorney and dental CPA and possible a dental management consultant

For more information, please contact info@dentalcpas.com

Friday, April 6, 2012

Great Thank You Note After a Dentist Interview

Here is a guest blog from our friend Carl Guthrie at ETS Dental, the only place to go for a dentist to get placed in a new practice.

I get asked about the best way to send a thank you note after an interview.  These days a simple email is all you need to send. Be sure to send the note within 24 hours of your interview.  The sooner the better. 

Below is a great example (with edits for confidentiality) of one that a Dentist candidate of mine sent to my Dental Practice client today.  
Dear Dr. "Smith",

I just wanted to say thank you for the opportunity to visit with you. Both the interview and the tour made for an exciting and complete day. I was so very impressed with the dental office tour. You were very thorough in explaining how the practice works and what would be expected when I join the team. I have been on several interviews and none have been as relaxing, stress free, and heartfelt as the one at "ABC Dental".

Thank you again for the opportunity to be considered for a general dentist position at "ABC Dental." The interview served to reinforce my strong interest in becoming a member of the practice. I appreciate the chance to visit with you. I look forward to hearing from you again soon. 

Best regards,

Dr. "Jones"
Great note!  Because of this note the doctor is moving quicker through the interview process because the owner knows this candidate has a genuine desire to work for the practice.  

Written by Carl Guthrie, Western Region Recruiter for ETS Dental.  
Contact Carl at cguthrie@etsdental.com | 540-491-9104 | http://www.etsdental.com/

Tuesday, April 3, 2012

What is the Difference Between a Dental CPA and a Standard Accountant?

What exactly does a "dental CPA" do that a traditional local accounting cannot?I'm not sure many of us can "do" anything differently. It's more of what we know.

They are not cheap... I'm paying $300/month for mine and then another fee for tax prep, which I cannot remember right now.
That's cheap! 


Seriously, just telling us what you pay and calling it "cheap" without telling us exactly what they do for $300 isn't telling us anything.

I am looking around for another CPA for a real estate company I own and there are guys that are half the price of my current CPA doing my practice.
For the exact same service?  That said, I have CPA friends that are more "tax only" CPAs and their tax prep fees are lower than ours, maybe half, they are solo practitioners and if they have a "tax client" that needs more than just tax they find it difficult to advise them...which is why we're friends.

They both offer about the same stuff...monthly financial statements, tax advice....
That's more of the "do" that I mentioned above. It's the "know" that separates CPAs. I know CPAs that focus on car dealerships, some that focus on insurance companies, some on home construction, and more. I would be clueless if I had one of those clients and they asked me about their industry stats, benchmarks, types of contracts, how much a drywaller or mechanic should cost. Yet we can all "do" a tax return.

So if I do not want a CPA firm to manage my investments and I am not looking for practice management/practice analysis, what else do they offer???The same basic services that most CPAs offer and we may not be any different if all you need is someone to prepare a tax return.

 I would reason that both CPAs can save the same moneys...numbers are numbers and tax laws are tax laws....I just don’t get why a dental CPA is superior over a local guy...
Will you ask your local CPA how much you should be paying for hygiene wages? How much your hygiene dept should be producing? How much to pay an associate? Are you ready to hire an associate? What kind of bonus plans have you seen? How you compare to their other clients? To the industry? What could you expect in revenue increase if you added another operation? What could you expect if you wanted to bring an endodontist into your office a day a week? What would they expect to earn? These are the issues that a Dental CPA can help you with IF you need the help, if you don't that's fine.

and please tell me why I need practice management/practice analysis....I am open minded and if I think something can really help me I will look into it...
Maybe you don't "need" one, if you know that you're doing everything properly and have no room improvement anywhere then you're in a better spot then most people including me.

For more information, please contact info@dentalcpas.com