While it’s inherently important for dentists to focus on patient-focused clinical care, practice profitability is equally imperative. The two main drivers for profitability are revenue and expenses, but you have to cut expenses to increase revenue.
Pre-pandemic, the average dental practice spent between five to six percent of its total expense budget on supplies. Due to global supply chain issues and the continuing shortages of critical supplies, spending has increased to more than eight percent of overall revenue —and this number will continue to climb.
Operating a dental practice can help achieve both personal and financial independence, but it’s critical to focus on controlling expenses and not just on increasing revenue. Effective budgeting is an integral aspect of efficient practice management, and reevaluating your budget, supply costs, and total spend is mandatory to navigate the path to financial success. It’s essential to regularly review the practice budget to analyze the percentage of practice income allocated towards fixed and variable costs. After you’ve identified your expenses, it’s time to consider ways to reduce the overall spend.
Wherever you are in your procurement processes, trusted inventory management software can help quickly implement new strategies to reduce supply costs. Although we can’t control what’s happening concerning supply disruptions and inflation, you can integrate a more efficient procurement strategy that helps lower the overall cost of ordering supplies.
Below are three key advantages of inventory management that provide significant benefits to your practice:
Inventory management software is directly related to forecasting and effective budgeting. Real-time data provides strategic planning reports to view trends regarding usage, which can help dental practices make well-informed decisions with more accurate ordering, ultimately resulting in cost savings.
The ability to oversee real-time inventory activity can enhance the functionality of a dental practice. An online inventory management system eliminates team members’ need to monitor supplies manually. Without a proper ordering and tracking system, there is no way to monitor shipments and reconcile that what you ordered is actually what your practice is receiving.
Reduces product wastage
Sufficient stock levels are vital for an efficient dental practice, but proper supply management is crucial. Inventory software can forecast patient demand with greater accuracy and eliminate the possibility of human error, meaning the practice is more likely to avoid the costs associated with overstocking or understocking supplies.
Operating a profitable and productive practice requires proactively prioritizing efficiencies to save money on supplies. You have the opportunity to control your bottom line if you implement a trusted procurement process with inventory management software.