{"id":11298,"date":"2023-06-06T09:00:57","date_gmt":"2023-06-06T14:00:57","guid":{"rendered":"https:\/\/www.cainwatters.com\/digitalblogs\/?p=11298"},"modified":"2023-07-12T11:08:21","modified_gmt":"2023-07-12T16:08:21","slug":"take-pulse-of-your-dental-practice","status":"publish","type":"post","link":"https:\/\/www.cainwatters.com\/digitalblogs\/take-pulse-of-your-dental-practice\/","title":{"rendered":"Taking the Pulse of Your Practice"},"content":{"rendered":"\t\t<div data-elementor-type=\"wp-post\" data-elementor-id=\"11298\" class=\"elementor elementor-11298\" data-elementor-post-type=\"post\">\n\t\t\t\t\t\t<section class=\"has_ae_slider elementor-section elementor-top-section elementor-element elementor-element-c62ecb9 elementor-section-boxed elementor-section-height-default elementor-section-height-default ae-bg-gallery-type-default\" data-id=\"c62ecb9\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"has_ae_slider elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-2c78a151 ae-bg-gallery-type-default\" data-id=\"2c78a151\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-1e7e21f2 elementor-widget elementor-widget-heading\" data-id=\"1e7e21f2\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"heading.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t<h2 class=\"elementor-heading-title elementor-size-default\">Find out if your net profit is in line with the industry averages<\/h2>\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-4b38531d elementor-widget elementor-widget-text-editor\" data-id=\"4b38531d\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>The last three years have been a roller coaster for dental practice owners. From COVID closures to the stimulus-fueled production boom to the possibility of a prolonged recession, doctors have shown remarkable resiliency in keeping their practices healthy and profitable.<\/p><p>The question is, what exactly <em>is <\/em>a healthy net profit these days? Should dentists expect the same profit margins they enjoyed before 2020? Or is there a new normal to which the industry should steer itself for the near future?<\/p><p>\u201cLike most industry trends, the answers lie in the data,\u201d says CPA and Financial Advisor <a href=\"https:\/\/www.cainwatters.com\/brittany-frazier\/\" target=\"_blank\" rel=\"noopener\"><span style=\"text-decoration: underline; color: #33cccc;\">Brittany Frazier<\/span><\/a>.<\/p><p>Each year, CWA compiles client data across six specialties to create the<em> <a href=\"https:\/\/www.cainwatters.com\/hdydpc-contact\/\" target=\"_blank\" rel=\"noopener\"><span style=\"text-decoration: underline; color: #33cccc;\">How Does Your Practice Compare? <\/span><\/a><\/em><a href=\"https:\/\/www.cainwatters.com\/hdydpc-contact\/\" target=\"_blank\" rel=\"noopener\"><span style=\"text-decoration: underline; color: #33cccc;\">Report<\/span><\/a>, a comprehensive benchmarking tool for doctors to compare their numbers with industry averages.<\/p><p>\u201cIn a 2020 <a href=\"https:\/\/www.cainwatters.com\/digitalblogs\/practice-vital-signs\/\" target=\"_blank\" rel=\"noopener\"><span style=\"text-decoration: underline; color: #33cccc;\">article<\/span><\/a>, I described net profit as the \u201cheartbeat\u201d of a practice,\u201d says Brittany. \u201cIt\u2019s the most direct metric to check the pulse of your practice, and the Dental Practice Comparison Report makes it easy to see how your compare.\u201d<\/p><p>According to the latest report, a healthy 2022 net profit should fall in the following ranges:<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-2fcc031 elementor-widget elementor-widget-text-editor\" data-id=\"2fcc031\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h5><strong>Net Profit Range 2022, Per Specialty*<\/strong><\/h5>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-a276059 elementor-widget elementor-widget-image\" data-id=\"a276059\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<a href=\"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Article-Table_transparent-background.png\" data-elementor-open-lightbox=\"yes\" data-elementor-lightbox-title=\"Dentaltown Article Table_transparent background\" data-e-action-hash=\"#elementor-action%3Aaction%3Dlightbox%26settings%3DeyJpZCI6MTEzMDQsInVybCI6Imh0dHBzOlwvXC93d3cuY2FpbndhdHRlcnMuY29tXC9kaWdpdGFsYmxvZ3NcL3dwLWNvbnRlbnRcL3VwbG9hZHNcL3NpdGVzXC8yXC8yMDIzXC8wNVwvRGVudGFsdG93bi1BcnRpY2xlLVRhYmxlX3RyYW5zcGFyZW50LWJhY2tncm91bmQucG5nIn0%3D\">\n\t\t\t\t\t\t\t<img fetchpriority=\"high\" decoding=\"async\" width=\"300\" height=\"300\" src=\"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Article-Table_transparent-background-300x300.png\" class=\"attachment-medium size-medium wp-image-11304\" alt=\"\" srcset=\"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Article-Table_transparent-background-300x300.png 300w, https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Article-Table_transparent-background-150x150.png 150w, https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Article-Table_transparent-background-768x768.png 768w, https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Article-Table_transparent-background.png 1000w\" sizes=\"(max-width: 300px) 100vw, 300px\" \/>\t\t\t\t\t\t\t\t<\/a>\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t<div class=\"elementor-element elementor-element-91b077e elementor-widget elementor-widget-text-editor\" data-id=\"91b077e\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>*Due to economies of scale, a multi-doctor practice would lean higher in the range, whereas a single doctor practice can typically expect to be in the mid to lower range.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"has_ae_slider elementor-section elementor-top-section elementor-element elementor-element-703a13d9 elementor-section-boxed elementor-section-height-default elementor-section-height-default ae-bg-gallery-type-default\" data-id=\"703a13d9\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"has_ae_slider elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-78b626b0 ae-bg-gallery-type-default\" data-id=\"78b626b0\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-6ba17f95 elementor-widget elementor-widget-text-editor\" data-id=\"6ba17f95\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>\u201cIf your net profit fell into one of these ranges, congratulations,\u201d says Brittany. \u201cEven still, it\u2019s always wise to keep an eye on areas you could be doing even better.\u201d<\/p><p>If your net profit came in lower than the averages, Brittany emphasizes not to beat yourself up.<\/p><p>\u201cThese are extraordinary times,\u201d says Brittany. \u201cThe first step is to arm yourself with the tools to diagnose your practice, then take steps to get your net profit back in line with the averages.\u201d<\/p><h5><strong>FOCUS ON WHAT YOU CAN CONTROL<\/strong><\/h5><p>With all the external economic stressors we\u2019re dealing with, it\u2019s easy to get overwhelmed with factors we cannot control.<\/p><p>\u201cThat\u2019s why I start by shifting my client\u2019s mental outlook from a fear-based approach to a more data-centric, goals-based approach focused on what we can control,\u201d says Brittany. \u201cThings like how many new patients the practice is bringing in and how much is it writing off.\u201d<\/p><p>Brittany also suggests taking a step back to make sure there is a rock-solid, goals-based financial plan in place.<\/p><p>\u201cBy leveraging the advice of a trusted CPA or advisor, it\u2019s easier to pinpoint areas that need attention and put a solid growth strategy in place,\u201d adds Brittany.<\/p><h5><strong>IDENTIFY AREAS TO IMPROVE<\/strong><\/h5><p>\u201cFor most practices, the first area to look at is expenses,\u201d says Brittany. The report not only shows direct and fixed expense averages, but it also breaks them out with detailed expenditures under each. For example, how did your lab fees compare to the averages, and how much did you spend on drugs and supplies?<\/p><p>\u201cIf you find yourself above the averages, you\u2019ve found a good place to focus on for improvement,\u201d says Brittany.<\/p><p>The 2022 report shows that fixed costs increased more than in the past \u2014 no surprise there. Brittany says what is surprising, though, is the types of fixed costs that rose the most.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"has_ae_slider elementor-section elementor-top-section elementor-element elementor-element-1a917f3 elementor-section-boxed elementor-section-height-default elementor-section-height-default ae-bg-gallery-type-default\" data-id=\"1a917f3\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-no\">\n\t\t\t\t\t<div class=\"has_ae_slider elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-23cfef64 blue-box ae-bg-gallery-type-default\" data-id=\"23cfef64\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-5a36633 elementor-widget elementor-widget-text-editor\" data-id=\"5a36633\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>\u201cIt\u2019s not the expenses like staffing and supplies and lab that increased more than expected,\u201d said Brittany. \u201cIt\u2019s the lesser fixed costs that sharply increased, like subscriptions and janitorial.\u201d<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"has_ae_slider elementor-section elementor-top-section elementor-element elementor-element-9ac03ec elementor-section-boxed elementor-section-height-default elementor-section-height-default ae-bg-gallery-type-default\" data-id=\"9ac03ec\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"has_ae_slider elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-265fe7b6 ae-bg-gallery-type-default\" data-id=\"265fe7b6\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-11695351 elementor-widget elementor-widget-text-editor\" data-id=\"11695351\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>Then again, Brittany says expenses may not be the reason profits are low.<\/p><p>\u201cIf your expenses are within range, yet profit was low, that\u2019s a clear indication to focus more on increasing revenue,\u201d says Brittany. \u201cRevenue drivers include new patient flow, treatment acceptance and conversion speed.\u201d<\/p><p>To help illustrate how the factors work together to determine net profit, use the following profitability formula.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"has_ae_slider elementor-section elementor-top-section elementor-element elementor-element-401c51dd elementor-section-boxed elementor-section-height-default elementor-section-height-default ae-bg-gallery-type-default\" data-id=\"401c51dd\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"has_ae_slider elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-6b541f8b ae-bg-gallery-type-default\" data-id=\"6b541f8b\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-2115ee7a elementor-widget elementor-widget-image\" data-id=\"2115ee7a\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"image.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<img decoding=\"async\" width=\"640\" height=\"335\" src=\"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Profitability-Factors-1-1024x536.png\" class=\"attachment-large size-large wp-image-11305\" alt=\"\" srcset=\"https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Profitability-Factors-1-1024x536.png 1024w, https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Profitability-Factors-1-300x157.png 300w, https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Profitability-Factors-1-768x402.png 768w, https:\/\/www.cainwatters.com\/digitalblogs\/wp-content\/uploads\/sites\/2\/2023\/05\/Dentaltown-Profitability-Factors-1.png 1200w\" sizes=\"(max-width: 640px) 100vw, 640px\" \/>\t\t\t\t\t\t\t\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"has_ae_slider elementor-section elementor-top-section elementor-element elementor-element-aa6998a elementor-section-boxed elementor-section-height-default elementor-section-height-default ae-bg-gallery-type-default\" data-id=\"aa6998a\" data-element_type=\"section\" data-e-type=\"section\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-default\">\n\t\t\t\t\t<div class=\"has_ae_slider elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-14d75d76 ae-bg-gallery-type-default\" data-id=\"14d75d76\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-30994cbf elementor-widget elementor-widget-text-editor\" data-id=\"30994cbf\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<h5><strong>REASSESS YOUR INSURANCE WRITE-OFFS<\/strong><\/h5><p>According to Brittany, taking a close look at insurance write-offs is essential, as they factor heavily into profitability.<\/p><p>\u201cI\u2019ve seen clients who increased their revenue but didn\u2019t see a jump in net profit,\u201d she said. \u201cUpon looking deeper, we saw the practice only got paid 60 cents of every dollar of revenue.\u201d<\/p><p>This percentage will vary dramatically based on whether the practice is 100% insurance driven versus fee-for-service only. Brittany suggests talking to your CPA or <a href=\"https:\/\/www.cainwatters.com\/contact\/\" target=\"_blank\" rel=\"noopener\"><span style=\"text-decoration: underline; color: #33cccc;\">contacting CWA<\/span><\/a> to determine the \u201cnormal\u201d range for your practice type.<\/p><p>\u201cAs practices raise fees to keep up with higher operating costs, it\u2019s imperative to maximize cash flow by making adjustments with insurance providers,\u201d says Brittany.<\/p><h5><strong>CHECK YOUR COLLECTIONS RATE<\/strong><\/h5><p>Another important metric of practice health is the collection rate, which Brittany says should be around 98% of adjusted production.<\/p><p>Collections rates out of the 98% range could indicate a variety of issues, such as comping too many procedures or collections procedures aren\u2019t as efficient as they should be.<\/p><p>\u201cWhatever the reason, all collections systems must function correctly to ensure a healthy profit line,\u201d added Brittany.<\/p><p>Ultimately, it\u2019s about knowing your practice data, how it\u2019s changed over time and what those trends tell you. It\u2019s not an easy thing to pin down, as Brittany says doctors are often too busy running their practice to properly analyze their numbers and create a solid growth strategy.<\/p><p>\u201cThat\u2019s why having a trusted advisor help you put the right profit-driving systems in place will help in the short term and better prepare your practice to weather the next storm,\u201d added Brittany<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<section class=\"has_ae_slider elementor-section elementor-top-section elementor-element elementor-element-47f84de2 elementor-section-boxed elementor-section-height-default elementor-section-height-default ae-bg-gallery-type-default\" data-id=\"47f84de2\" data-element_type=\"section\" data-e-type=\"section\" data-settings=\"{&quot;background_background&quot;:&quot;classic&quot;}\">\n\t\t\t\t\t\t<div class=\"elementor-container elementor-column-gap-no\">\n\t\t\t\t\t<div class=\"has_ae_slider elementor-column elementor-col-100 elementor-top-column elementor-element elementor-element-25d8d134 blue-box ae-bg-gallery-type-default\" data-id=\"25d8d134\" data-element_type=\"column\" data-e-type=\"column\">\n\t\t\t<div class=\"elementor-widget-wrap elementor-element-populated\">\n\t\t\t\t\t\t<div class=\"elementor-element elementor-element-151387cf elementor-widget elementor-widget-text-editor\" data-id=\"151387cf\" data-element_type=\"widget\" data-e-type=\"widget\" data-widget_type=\"text-editor.default\">\n\t\t\t\t<div class=\"elementor-widget-container\">\n\t\t\t\t\t\t\t\t\t<p>To learn more about optimizing your net profit or get answers to any other business or personal finance question, a CWA advisor is always here to help. <a href=\"https:\/\/www.cainwatters.com\/contact\/\" target=\"_blank\" rel=\"noopener\"><span style=\"text-decoration: underline; color: #33cccc;\"><strong>Set up your free consultation<\/strong><\/span><\/a> today.<\/p>\t\t\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t<\/div>\n\t\t","protected":false},"excerpt":{"rendered":"<p>Find out if your net profit is in line with the industry averages The last three years have been a roller coaster for dental practice owners. From COVID closures to the stimulus-fueled production boom to the possibility of a prolonged recession, doctors have shown remarkable resiliency in keeping their practices healthy and profitable. The question [&hellip;]<\/p>\n","protected":false},"author":7,"featured_media":11301,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":"","_ppma_block_editor_authors":""},"categories":[16,41,20],"tags":[],"ppma_author":[48],"class_list":["post-11298","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-digital-news-feature","category-featured","category-practice-management"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.5 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Taking the Pulse of Your Practice<\/title>\n<meta name=\"description\" content=\"When it comes to taking the pulse of your practice, the question is what exactly is a healthy net profit these days? CPA Brittany Frazier explains national averages in the How Does Your Practice Compare? Report.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.cainwatters.com\/digitalblogs\/take-pulse-of-your-dental-practice\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Taking the Pulse of Your Practice\" \/>\n<meta property=\"og:description\" content=\"When it comes to taking the pulse of your practice, the question is what exactly is a healthy net profit these days? CPA Brittany Frazier explains national averages in the How Does Your Practice Compare? 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