Let’s start with the obvious: operating a dental practice is expensive, and time is valuable. Managing dental practice overhead can be challenging, overwhelming, and often discouraging — but with effective budgeting and the help of digital tools, it’s certainly not impossible.
Without a dental practice budget, it’s hard to understand where your practice stands financially. A dependable budget is necessary for estimating your practice’s future revenue, expenses, and profits. Still, the first step in preparing an effective budget is a complete evaluation of your past production, income, and costs.
How you view your expenses is critical before implementing a strategic budget. Between fixed costs, including rent, utilities, and insurance, and variable expenses, such as wages, consumables, and laboratory fees, it’s essential to recognize, understand, and monitor each specific cost. An accurate picture of these costs helps to thoroughly understand your profit margin and how you can plan around each expense to implement cost savings wherever feasible. Remember, maintaining a budget is a relatively simple concept but requires discipline.
Next, take a moment to reflect on your current overhead expenses. Are you in complete control of your total spend? Are there areas of the business where you can integrate changes to improve efficiencies? Are you utilizing technology and digital tools to simplify workflows, enhance patient care, and optimize your bottom line?
Following employee wages, supplies are generally the second largest expense in a dental practice. Dental inventory needs and order volume vary monthly, and manual budgeting can often be challenging to track. Digitization is a practical solution to help minimize costs and can be a highly effective procurement strategy. A purchasing strategy can help determine what you can and cannot afford, helps prevent overspending on supplies, and reduces monetary loss due to product wastage. The benefit of an inventory management system is that it not only manages supplies but also keeps an eye on spending and usage, allowing the much-needed flexibility to adjust budgets accordingly throughout the year.
With a custom, automated practice budget, you can choose how you monitor your expenses. From the creation of your budget to an effective spend management strategy, procurement solutions can save valuable time when it comes to annual budgeting. By automating your budget and forecast processes, you can help your practice enhance efficiencies and visibility, improve overall productivity, and make wise financial decisions that will significantly benefit your bottom line.