5 Accounting Tips to Increase ProfitabilityJune 23, 2015 | Category HR, Practice Management
Maximizing your effectiveness in your role as the Chief Financial Officer (CFO) of your practice, and therefore the profitability of your practice, requires a thorough understanding of accounting and finance. The information below is an introduction to the type of information covered in-depth at the Dental Business Institute.
1. Having a detailed business plan is critical for any dentist who is considering adding an associate, expanding an existing practice or opening a new practice location.
2. Make sure your financial statements are designed to be “Dental Specific” in their format so that they are truly management tools.
3. Embezzlement is more common that most dentists think. Watch for warning signs such as low collection percent, high accounts receivable, excessive overhead in several categories, employee lifestyle changes and disorganized books or computer entries.
4. Setting up your practice as an “S” corporation may save taxes compared to a sole proprietorship. Pay yourself a reasonable salary and then pay the rest as a “dividend distribution” to save paying the 2.9% Medicare tax on the dividend portion of your income.
5. Work with an expert to prepare your exit strategy. Too many dentists reduce practice hours and fail to invest in equipment and technology in the years leading up to retirement. This can significantly reduce the value of the practice.
To learn more about accounting and the other topics taught at the Dental Business Institute, visit www.HenryScheinDental.com/DentalBusinessInstitute.