When a practice owner has access to accurate and up-to-date financial data specifically designed to clearly show meaningful practice information, the dentist is in a position to assess their financial position, take action to correct any adverse trends happening during the year, and avoid unnecessary tax surprises.
Many general accounting firms are very tax-oriented and do not prioritize or dedicate resources to monthly bookkeeping. However, simply having the books prepared in the spring for a tax return denies the owner/dentist an opportunity to take advantage of valuable information contained in the monthly records as the year progresses.
With HDA Accounting Group's monthly Practice Profitability AnalysisSM, our clients have this valuable information available each and every month in a format that is easy-to-understand and presented in way which clearly shows the metrics critical for a profitable dental practice.
We only work with private dental practice owners. Everything we do all day, every day, is support dentists who own their business and want the best for their patients, their families, and themselves. When you read our reports and consult with our team, the professional advice we provide has tremendous value for your practice.
The two most important indicators of a practice's financial health are Revenue per Month and Profit Margin. You can think of it this way: A practice must have adequate revenue in order to cover fixed costs, variable costs, and still have profit available to be taken home as owner income. The amount of residual profit available for the owner is measured by the profit margin.
A healthy practice should also have an adequate Operating Cash Reserve on hand to meet monthly cash requirements without the owner having to juggle money during the month to pay rent, payroll, the supply bill and more. On the other hand, a practice owner does not need to have an excessive amount of cash in the business as that money could likely be put to better use such as investments or personal savings.
The Monthly Break-Even Point is the metric used to determine an appropriate cash reserve for the practice, to assess the availability of funds to take as profit distributions, and to use as an important factor to consider regarding future investments in the practice such as new or replacement equipment.
Expense benchmarks are measured as a percentage of total revenue and used to analyze the profitability of your practice. Aggregating data in this format is important because measuring the true financial picture of your practice is enhanced when expense categories specific to the dental industry are isolated and presented with context.
With 400 dental practices coast-to-coast, HDA Accounting Group enjoys an incredible amount of data to provide accurate and real-time comparisons and perspective for our clients. Real-Time Benchmarking allows us to show you how hundreds of other practices just like yours are performing in the same time period. All accounting work for each of these dental practices is done the exact same way with standardized accounting procedures at the same dental-specific CPA firm, so the data samples provided on our monthly reports are highly accurate, comparable, and substantially relevant.
General or local accounting firms do not have the extensive specialized client base to obtain this data, and most have not invested in the technology needed to collect and aggregate this type of critical information. Our Real-Time Benchmarking is a perfect example of how HDA Accounting Group continually invests and develops new client deliverables to provide the highest level of support and value for our dentists.
Having a professional accounting firm manage your practice accounting is also an excellent deterrent for fraudulent activity from employees who might otherwise think theft would go unnoticed. As part of our onboarding process, we will discuss how your front office is organized so that you have proper checks & balances in place to help minimize your risk exposure.
Approximately 1/3 of our dental practice owners started with HDA Accounting Group prior to opening day. It is never too early to form your team of professional advisors, and our firm can help as you navigate the process of becoming a business owner.
If you are considering a startup practice or acquisition, there are several important items that are likely already on your mind. We can advise you on each of these topics and answer any questions you have such as:
Set an Initial Consultation with Morgan today if you are negotiating this process.
Staff Accountant: Every practice has an assigned staff accountant who performs all work in QuickBooks and prepares your monthly reports for delivery. You have access to your staff accountant any time during business hours via phone or email. They will also contact you if there are any transactions or activity that is unclear to them.
Practice Advising: Key Advisors are available to help you understand your profit analysis and other strategic questions you may have. Online appointments are the best way to schedule these meetings as they allows us to prepare ahead of time for a substantive and productive meeting.
Tax Advising: Our experienced tax advisors will help you understand your tax situation, elements applicable to your overall tax planning, and tax questions. Like our other key advisors, easy-to-schedule appointments are the best way to set a time to review your tax questions so we can ready to make excellent use or our time together.
Please read Tax Savings & Planning in the next section to learn more about the advanced tax-savings strategies we employ to save our doctors the most money in taxes.