Financial performance management refers to the steps you take to ensure profitability, sustained success, and informed decision-making at your dental practice.
In these crucial money matters, a Certified Public Accountant (CPA) is a dentist’s most essential ally.
A CPA is an accounting professional whose duties may include examining financial records, preparing tax returns, conducting audits, and preparing budgets and other financial documents. In the sections below, we’ll highlight the benefits of working with a CPA at your busy dental practice.
The Financial Landscape of Dental Practices
Dental practices have small staff sizes and relatively simple business models—but both revenues and costs are oversized, and the financial complications are significant.
The most challenging financial areas for dentists include:
- High costs for equipment, supplies, operations, and utilities
- Fluctuations in appointment volume
- Complications with billing, collections, and insurance
To tackle the unique challenges that the dental industry presents, many dental practice owners choose to work with a certified public accountant who has dental industry expertise. A dental CPA is equipped to help dentists improve daily financial procedures while also providing assistance with their most pressing financial concerns.
How a CPA Improves Your Dental Practice’s Financial Health
Dentists who work with CPAs benefit from in-depth financial analysis, improved record-keeping, and a more nuanced understanding of their practice’s financial health.
Here are a few areas in which CPAs offer valuable assistance.
Tax Planning and Strategy
CPAs are tax experts who can help you maximize deductions, minimize your tax burden, and avoid IRS complications. Your CPA can offer year-round assistance for proactive tax planning that prevents unpleasant surprises during tax season. Your CPA can also offer guidance on choosing a business structure that enables the best possible taxation outcomes.
Payroll and Benefits Management
Full-service accounting firms assist dental practice owners with the financial matters related to overseeing a staff. These include:
- Tailoring compensation and benefits packages that attract and retain top talent
- Developing payroll procedures and best practices
- Developing norms for raises, overtime, and bonuses
- Incorporating payroll and benefits planning into long-term financial planning
Payroll and benefits are tricky areas for any business owner. The assistance of a CPA is helpful for developing an employee compensation system that’s fair and profitable for all parties.
Cash Flow Management and Financial Forecasting
Dental practice profitability involves productivity, efficient spending, and an effective system for billing and collecting. Your CPA can assist with developing and administering a set of procedures that ensures timely collections and minimizes conflicts.
An accountant can also provide guidance on connecting daily transactions to long-term financial planning. Your CPA can evaluate the details in your balance sheets, cash flow statements, and income statements to make sense of your overall financial situation. You can then work together to develop forecasts and plans that help your practice maintain financial stability amid the unpredictable nature of cash flow fluctuations.
The Specialized Advantage of a CPA with Dental Industry Expertise
Any skilled accountant can provide helpful services and guidance. However, it’s preferable to work with a CPA who has expertise in your industry. For dentists, that means working with a CPA who specializes in healthcare, or better yet, in the dental industry.
Working with a dental CPA means you’ll receive tailored advice from a money expert who knows your industry inside and out. They’ll help you understand industry benchmarks and growth patterns so that you can practice informed goal-setting and financial planning.
A dental CPA is also up-to-date with the latest regulations, standards, and technologies that pertain to your industry. They’ll help you sort through the noise to identify the changes and developments that really matter, while avoiding potential pitfalls.
Finally, an experienced dental CPA may become a valued networking partner. A financial professional who works exclusively with dental practice owners is likely to be connected to referral partners, service providers, and vendors who can bring value to your business.
Get a Dental CPA’s Help for Better Financial Performance
For a customized approach to financial performance management at your dental practice, join forces with Duckett Ladd. We’re an expert team of CPAs and advisors working exclusively in the dental industry. Our services include:
- Dental practice accounting business services
- Dental practice growth planning
- Dental practice acquisition and disposition planning
Contact our team today to learn more.
Duckett Ladd, LLP does not provide tax, legal, or accounting advice. This content has been prepared for informational purposes only and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Also, tax law is ever-changing, and every effort should be made to seek out the most current information. Make sure to check the date of published content to ensure the most current information.