Maximize Your Practice Success With Effective Budgeting

With a new year approaching, now is the ideal time to think about your budgeting processes that are  essential for practice success.

Group practices and dental services organizations (DSO) have rapidly expanded, and their consistent growth is projected to continue. As DSOs expands, more and more patients have easier access to high-quality care and cutting-edge technology for dental procedures. The growth of DSOs enables dentists and owners to take a step back from the business side of the practice and the opportunity to focus solely on clinical excellence. But even though this model allows dental professionals to eliminate some day-to-day stressors associated with running a successful practice, it is still highly imperative to keep an eye on budget protocols to ensure operations meet the group practice or DSO requirements.

A budget is a critical part of the strategic plan of your dental practice. Without a well-thought-out practice budget, dentists are unable to have a proper understanding of where the practice stands financially or a road map to continued success. The operating budget contains multiple components, including payroll, occupancy costs, supplies, marketing, and more. Determining yearly revenue is fundamental for effective budgeting, as it ensures that the revenue exceeds operating expenses and aligns with your strategic plan. It is vital to determine how much the practice earns yearly before allocating funds to specific areas within the budget. 

But budgeting protocols are time-consuming and often frustrating, and overwhelming based on the amount of manual work involved in the process. Take supply inventory, for example. A dental practice simply cannot operate without supplies. Still, most practices find themselves paying more, buying more, and negatively affecting the supply budget without considering alternate solutions that could prove beneficial. It is entirely possible to keep supply costs down by comparing prices across various manufacturers and carefully considering each item’s return on investment. 

If this was your first year budgeting for supplies, you understand how essential it is to record supply purchases accordingly throughout the year and to itemize the expenses at year-end. But a more simplified and efficient option is implementing a proper procurement and inventory management platform that can do the manual ordering and tracking for you. An inventory management system can track all office supply orders, manage inventory, keep an eye on spending and usage, and allow the much-needed flexibility to adjust budgets accordingly throughout the year. Not to mention, it can lend a helping hand with the cumbersome budget process for the following year. 

Utilizing inventory management software offers a more comprehensive approach to ordering and tracking processes and will benefit your practice budget for years to come.