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Dental Accounting Association

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Dental Practice Coaching

SmileDirectClub Plunges After IPO

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Smile Direct ClubOrthodontic start-up SmileDirectClub fell 28% on its first day of trading in New York,  closing at $16.67 after it raised $1.35bn in an initial public offering. The deal priced at $23 a share, above the expected range of $19 to $22. Dealogic data on IPOs on U.S. exchanges showed the plunge was the year’s worst stock market debut for a U.S. company valued at over $1bn. The company’s methods have been questioned by orthodontists. The American Association of Orthodontists (AAO) had previously said that it had “serious concerns” about the approach used by SmileDirectClub and its market peers. The company sells clear teeth aligners directly to consumers without requiring them to visit orthodontists’ offices. The AAO said it had filed complaints against the start-up with dental boards and authorities in 36 states.

Source – Wall Street Journal

Prescription for Big Tax Savings

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The oral health industry is a broad field encompassing many different types of practices. The term oral health means maxillofacial surgery, endodontics, periodontics, prosthodontics, and other types of dental practices.  While the clientele may differ in each setting, the goal is always the same; to help the patient heal and feel better regardless of how many teeth they have left!  Another commonality of all oral health professionals is the desire to pay less in taxes legally.

If you’d like to pay less in taxes, then read on…

 

What is cost segregation and what does it have to do with me?
Cost Segregation is the reclassification of assets in order to accelerate depreciation. This method can be used on buildings that are acquired, newly constructed, and even (on a look back basis) for buildings that have been owned and operated for many years!

Z - Dental OfficeWhat if you don’t own your building? No problem, Cost Segregation can be performed on the interior improvements that you have undertaken as a tenant as part a buildout.  This strategy allows you to “front load” your depreciation at tax time, freeing up significant cash flow which can be reinvested into your building or practice. You will not get more money back, you will simply expedite the time frame of your depreciation allowing your money to work for YOU rather than pay our government! This is a particularly good time to consider a Cost Segregation Study with the newly implemented 100% bonus depreciation regulation as part of the Tax Cuts and Jobs Act of 2017. This legislation is different from the past version because it now includes acquisition where previously bonus only applied to newly constructed buildings.

In addition, the bonus rate (as mentioned earlier) is now 100% for certain assets!

 

What is my tax benefit?
The benefits of a Cost Segregation Study vary depending on the details of your property.

Z - Cost Seg2For example, a newly constructed dental office with a cost basis of $1,540,000 can expect to see around 30% accelerated, and with the new bonus depreciation, the first-year tax savings could be in excess of $180,000!  A rented two story medical office with recent tenant improvements totaling over $290,000 was able to accelerate over 91,000 or roughly 60%!

Again, the results are heavily based on the facts and circumstances surrounding your property, but on average dental facilities can expect to see between 20-50% accelerated depreciation! If you have bought, built or renovated your office (even if you rent) please let us determine your estimated return!

 

If you’d like to pay less in taxes legally and think cost segregation might fit your situation, then complete this form and we will have a Dental CPA contact you immediately.

 

 

Dental Accounting Association

DAA-logoAll members of the Dental Accounting Association are licensed CPA’s and have been vetted.  Each firm attends at least one national dental show (e.g., ADA, AAO, AAPD, AAOMS, etc.) along with some regional dental shows.  In addition, each firm is provided with advanced training in proactive tax planning which is well beyond the state requirements for being a licensed CPA.  This advanced training is designed to find loopholes, credits, deductions and strategies to lower your effective tax rate.  While these methods are perfectly legal, they often require extra work that a local generalist would never consider to offset the incremental time demands.  Cost segregation is one example of proactive tax planning designed to maximize tax credits and loopholes.  The Dental Accounting Association works with a leader within the cost segregation industry to provide ethical ways to lower your taxes.

Differentiate To Become The Best At Something

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Are you tired of haggling over the price of your service? Have you found it difficult to charge the prices that your services deserve?

Without a differentiated service, your service becomes a commodity because you become subject to the market and vulnerable to someone else with a lower price. To command a higher price for your service and maintain superior profit margins, you must differentiate your service and provide more “perceived” value. When done properly, your value proposition becomes well known, the sale becomes easy, and your retention rates will increase.

Z - Blue Ocean imageTo learn more, here are two suggestions that go into more depth on how differentiation can change your world.

Blue Ocean Strategy by W Chan Kim – This international best selling book is an interesting read on how brands and companies have effectively differentiated their offering to make their competition less relevant. In crowded categories like wine, air travel, entertainment, fitness, and music, learn how differentiation can create a huge difference.

By all means, the concept of differentiation or die is not new.  In fact, Jack Trout wrote a book called “Differentiate or Die” back in 2000 and it became a #1 Best Seller.

Another example on how differentiation is impacting dental practices can be found in this article by Forbes magazine.  Essentially, the article explains how becoming the “best” at one particular service enables you to increase price and attract new patients from a broader geographic area, not just five miles.

Learn how to become the best can set your practice on fire.

 

Embezzlement Is More Prevalent Than You Realize

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Fraud and embezzlement in dental practices is far more common than any of us want to accept.  Yes, it will happen to you at some point within your practice.

Fraud Risk imageRecently, we had an expert speak to the Dental Accounting Association and the myriad of ways that embezzlement occurs in a dental practice and it was alarming.  All of the various ways they can steal is endless from padding payroll, petty cash, employee advances, patient refunds, insurance checks, buying office supplies at Costco and even prescriptions.

Here are several ways to minimize your risk of fraud:

  • Background checks – All employees should be subject to background checks before being hired, especially office managers, receptionists and key staff. This is inexpensive and standard procedure for savvy dental practices.  Most office fraud cases are caused by serial employees who repeat this crime and get better at their craft.
  • Digital time clocks – The days of submitting payroll manually are over. Your office should be using a digital time clock.
  • Inventory levels of office supplies and free samples should be very tight and overseen by multiple people in your office.
  • Separate responsibilities so you don’t rely upon one key employee.
  • Ensure that multiple people can perform all tasks and ensure all employees take vacation. Embezzlers typically avoid taking time off and want to control all tasks.
  • Many embezzlers have a tight relationship with the practice owner. Physical or emotional.

In a nutshell, all dental practices will experience theft at some point within your ownership period.  If you suspect embezzlement at your office, there is a process to follow before accusing any staff member.

Dental Accounting Association firms are another resource to contact if you suspect something is not quite right.  Our members have a process to follow and an independent fraud risk expert to help you at the appropriate time.

Dental CPA Summit at American Assoc of Orthodontists Annual – Wash DC

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The Dental Accounting Association will be hosting their 3rd Annual Dental CPA Summit on Friday, May 4th, in Washington DC.

This year’s Dental CPA Summit will be held just before the American Association of Orthodontists (AAO) Annual from May 5th to May 8th. ZZ - Coach K

The AAO Annual is expected to generate over 17,000 attendees.  The keynote speaker will be Duke’s head basketball coach, Mike Krzyzewski (aka – Coach K).

For the Dental CPA Summit, the keynote speakers will be Susan Gunn, who is a nationally recognized speaker on dental practice embezzlement.  She has published 39 books and is recognized annually by Dentistry Today as a leader in dental practice consulting.  She has also co-authored ADA Publications on dental financial best practices.

Our second speaker will be Christian Pearson, National Director of Dental Partnerships for Treloar & Heisel, the largest specialty advisor for dental specialists ranging from orthodontists, oral surgeons, to various dental specialties.

 

Dental Accounting Association

The Dental Accounting Association is comprised of twelve (12) Dental CPA Firms covering the United States.  Each member firm is owner operated and committed to providing best-in-class technology and techniques designed to give your orthodontic practice a competitive advantage.

If you are searching for a trusted advisor who focuses on dental practices, we have members from coast to coast attending this conference.  Stop by and visit us at booth # 1649.  Or alternatively, visit our Dental CPA Firm member directory to learn more.

Dental Practice Ownership is Falling, Especially Amongst Younger Dentists

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The share of dentists in private practices who are owners has declined overall since 2005, reports the ADA Health Policy Institute (HPI). The trend is much more pronounced for younger dentists than for older ones. Dentists under the age of 35 have seen a decline of practice ownership of 44% in 2005 to 28.4% in 2017, and dentists aged between 55 and 64 showed a small decline from 93.8% to 92.3% over the same period, according to the HPI figures. Meanwhile, the data indicate that female dentists are less likely than male dentists to own a practice. In 2005, 66.8% of female dentists were owners; in 2017, the comparable figure was 63.4%.

For more insights, go to ADA News.