<\/span><\/h4>\n\n\n\nDue to growing labor requirements, salaries for dental hygienists, dental assistants, and administrative personnel are on the rise, representing the largest share of operating costs. The high turnover rate drives costs even higher as new hires must be trained, causing cash flow issues. <\/p>\n\n\n\n
Solution: Make use of specific dental accounting procedures to measure the proportion of payroll expense to total income, maintaining this ratio within the range of 23% to 26%. Incentive schemes tied to production numbers and using effective scheduling programs can help optimize productivity per worker, thus matching staffing to patient traffic.<\/em><\/p>\n\n\n\n<\/span>Equipment Maintenance and Repairs\u00a0<\/span><\/h4>\n\n\n\nDental equipment requires\u00a0significant\u00a0financial investment as well as ongoing maintenance. Unexpected failures can lead to unpredictable expenses and lost income from equipment downtime. High-quality equipment has extensive service requirements that are also expensive, therefore increasing operational cash flow volatility.\u00a0<\/p>\n\n\n\n
Solution: Begin a specific maintenance reserve account, or establish a preventative maintenance budget, which will help avoid large unanticipated expenses. You can use Section 179 tax deduction strategies to purchase equipment you need; this allows you to deduct the cost of the equipment in full for the year it was placed in service, thereby reducing your current taxable income and thereby also improving your cash flow.<\/em><\/p>\n\n\n\n<\/span>Inaccurate Tax Planning\u00a0<\/span><\/h4>\n\n\n\nNot having a tax plan throughout the year results in major unforeseen outflows of cash\u00a0at\u00a0tax time and can create\u00a0a financial crisis\u00a0due to a lack of working capital. This is especially true when a practice does not distinguish between or\u00a0properly manage: personal vs business vs distribution expenses, which leads to poor cash flow projections.\u00a0Debt Obligations\u00a0<\/p>\n\n\n\n
Solution: A dental-focused accountant can help you establish a proactive tax approach, take quarterly projections, and use deductions exclusive to dentistry. Advanced tax savings options (STR Rule – Company Meetings, depreciating Dental Equipment) between the two areas can provide you with improved cash flow by lowering your tax liabilities.<\/em> <\/p>\n\n\n\n<\/span>Debt Obligations\u00a0<\/span><\/h4>\n\n\n\nMany dentists face high debt burdens from practice acquisition to equipment financing, which takes up a significant portion of cash flow. Rising interest rates have compounded this issue, creating higher monthly obligations that tighten the cash available for daily operations. <\/p>\n\n\n\n
Solution: The expert CPA can assist you in creating a cash flow projection plan that would be tailored to ensure that all payments are met without having to resort to the use of high-interest credit cards; thus, using your company line of credit to fill temporary cash flow shortages, as opposed to a substitute for capital funding, and refinancing previous high-interest debt\/credit that has been around for some time will improve cash flow.<\/em> <\/p>\n\n\n\n<\/span>Conclusion\u00a0<\/span><\/h2>\n\n\n\nThe implementation of such strategies as suggested in the blog requires some degree of tact and planning because these cannot be implemented easily overnight. In most cases, each proposed solution to each dental cash flow challenges<\/strong> entail a number of considerations. These include the requirements of the company and the resources available to implement the solutions. Assess how it will affect current systems and processes in place. This way, one will have smooth sailing when implementing the solutions. <\/p>\n\n\n\nIt is also important to take into consideration the fact that, despite the apparent simplicity of the solutions, implementation is likely to involve collaboration between teams and employee training. A gradual process may be needed to ensure all dental cash flow challenges<\/strong> encountered are sorted out successfully. Adequate time should, therefore, be given to implement these solutions. It is through patience and persistence that positive results will be realized. <\/p>\n","protected":false},"excerpt":{"rendered":"Cash Flow problems in a dental clinic show up slowly at first, then all at once. It usually starts with a minor dip in collection rates and snowballs into a cash flow crisis affecting payroll and vendor payments. So, if you are able to catch them while your practice is still in the growing phase, you are already […]<\/p>\n","protected":false},"author":1,"featured_media":6337,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[28],"tags":[337,336,335,338],"class_list":["post-6309","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-accounting","tag-dental-cash-flow","tag-dental-cash-flow-challenge","tag-dental-cash-flow-challenges","tag-dentist-cash-flow-challenge"],"_links":{"self":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6309","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/comments?post=6309"}],"version-history":[{"count":2,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6309\/revisions"}],"predecessor-version":[{"id":6336,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/posts\/6309\/revisions\/6336"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/media\/6337"}],"wp:attachment":[{"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/media?parent=6309"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/categories?post=6309"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.acobloom.com\/us\/wp-json\/wp\/v2\/tags?post=6309"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}