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Best Jobs – U.S. News and World Reports – Oral Health Industry Excels

January 14, 2020 by Hugh Duffy

U.S. News & World Report just completed their rankings of the best jobs across 17 categories and the oral health category excelled. Below are the highlights:

100 Best Jobs – Dentists were ranked #2. Orthodontists were ranked #4. Oral and Maxillofacial Surgeon were ranked #9.

Best Paying Jobs – Oral and Maxillofacial Surgeons were ranked #3. Orthodontists ranked #5. Prosthodontists #8. Dentists #10.

Best Healthcare Jobs – Dentists were #1. Orthodontists #3.

Consistently across the board, all aspects of the dental and oral health industry scored extremely well.

For more detailed analysis, here is the analysis.

Last Minute Tax Legislation – Impact on Dental and Medical Practices

December 26, 2017 by Hugh Duffy

With the newest tax legislation, many dental and medical practices feel like they are being pulled into quicksand. V - Smiling Dental Client That’s right, this year’s tax legislation has created a quagmire of uncertainty for professional service firms who need extra guidance to identify the loop holes created by last minute legislation. We all know that last minute legislation is like swiss cheese.

Rather than continuing to work with a local CPA, many oral surgeons, orthodontists, pediatric dental practices and dental specialists are searching for a higher level of expertise. For example, many dental specialists are searching for dental CPA firms that have located tax savings opportunities specific to dental practices.

For savvy dental practice owners that realize the tax saving opportunities, this presents an opportunity to make a more informed business decisions in uncertain times. Many dental practice owners and newer dentists with high levels of dental school loans are reaching out to the Dental Accounting Association to locate a dental CPA nearby.

Aggressive Tax Savings for Dentists

November 9, 2017 by Hugh Duffy

There are very few financial advisors (and even fewer dentists) who have ever heard of cost segregation depreciation. Dentists are constantly requesting tax advice from their CPAs as well as their financial advisors. Since they are high-income earners, they want the best people advising them about tax write-offs and how fast they can get them.

Most CPA’s and Dentists know the guidelines for section 179 depreciation, which involves a quick write-off for depreciation for equipment and other non-real property related assets. When the question is posed about cost segregation depreciation, they are at a loss and often feel that it does not apply to a small dental practice.

Cost segregation depreciation is a quasi-science for financial experts that provide this service. Many CPA’s do not realize that it is cost effective for a small office building. In years past, cost segregation applied to larger, more expensive commercial buildings (think manufacturing plant, auto dealer, utility, skyscraper office building, mall, etc.). As a result, very few CPA’s recommend cost segregation depreciation and most don’t really understand it very well.

Cost segregation depreciation is well understood and accepted by the IRS. The tax savings are significant for a dental practice if the service is provided by the right experts. And because the rules are complicated, cost segregation is done by boutique firms that do this full time.

Cost segregation actually came about as a result of Hospital Corporation of America suing the IRS…and winning! The Supreme Court of the United States heard arguments from opposing counsel and ruled that there are building components qualifying for shorter depreciation periods…5-years, 7-years and 15-years. This is simple mathematics for forensic accountants.

To provide aggressive tax savings for dental practices, the Dental Accounting Association works with a forensic engineering firm that applies all of the Internal Revenue Code to the advantage of the commercial property owner (the dentist). Specifically, they use IRC § 481(a), the “catch-up” provision. This little section of the tax code allows forensic accountants to give any commercial property owner a windfall tax refund. Without amending a single tax return, they can go back to January 1, 1987 and get your overpaid taxes paid to you in the current tax year. The IRS grants what is called “automatic consent.” For you, the taxpaying property owner, it means the IRS gives you all of those overpaid taxes simply by filing Form 3115. The forensic accountant that Dental Accounting recommends will provide that exact role at no additional charge.

So, if you own or lease commercial real estate of any kind, we can help. Each of our Dental Accountants will recommend the right forensic engineering firm to save you taxes. The service is so complicated that it is not done in-house by your local Dental CPA. The forensic engineers recommended by your Dental Accountant are highly trained in building componentization and applying the tax code to those components.

To initiate this evaluation, simply provide us with your contact information and we will put you in touch with a Dental CPA near you to quarterback this project and identify the potential tax savings.

If you are tired of overpaying taxes, this aggressive tax savings tool is rock solid and black ‘n white.

Dental Profit Coaching – Critical Numbers to Track

November 7, 2017 by Hugh Duffy

Within a dental practice, there are endless things to track and monitor. So where does one start to evaluate production, compare performance versus similar practices in the local area, evaluate pricing, and practice profitability?

As Profit Coaches for Dental Practices, our members within the Dental Accounting Association are asked these questions all the time. Here’s how we typically approach this process and how we monitor performance and production.

First and foremost, the Dental Accounting Association uses one standardized set of industry benchmark costs, one chart of accounts, and one business intelligence system (SIKKA) to evaluate production, standardize reporting, and evaluate pricing. That said, here are the key numbers to watch:

Dental Practice Overhead

Typically, the first place to evaluate profitability is examining dental practice overhead and getting control over areas to prune costs. While most aspects of overhead change infrequently, there are inflexion points when overhead can be reduced dramatically. These is worthy of a discussion with your Dental CPA for guidance and recommendations on how to cost reduce key drivers of dental practice overhead.

Profit and Loss Statement

While every business owner uses a P&L statement as a starting point to evaluate profitability, one key ingredient is that the underlying categories need to standardized and categorized so your P&L can be compared to similar sized dental practices. Comparing a typical P&L to another dental practice requires that expenses and categories are classified the exact same. Absent of this standardized approach, you will be comparing apples to bananas.

Within the Dental Accounting Association, we use one standardized chart of accounts so we are comparing apples to apples.

Personnel Costs

Most dentists know where they stand on this category but having outside comparisons never hurt.

To properly evaluate, personnel costs need to be broken down by departments; chairside, hygiene, clerical, etc. Second, outsourced services such as temps should be part of this category as well.

Other Key Cost Categories

Variable Costs (include dental supplies and lab fees)
Facility and Equipment Costs
Discretionary Costs
Owner’s Comp

Critical KPIs

sikka As part of the dental profit coaching, we like to review key performance indicators (KPIs) of the dental practice to compare and contrast profitability. The SIKKA software makes this process easy for us to evaluate this as well.

Fee Optimization

The last piece of this process is reviewing fees charged by procedure. This is where SIKKA software excels and helps us pinpoint opportunities.

Selecting a Dental CPA for Profit Coaching

While working with a local generalist CPA is convenient, a general CPA does not have the time, interest or in-depth knowledge of the dental industry to provide dental practice profit coaching. For that matter, they often don’t have all of the resources to take full advantage of all the tax breaks available for a dental practice. For example, our members provide boutique capabilities like cost segregation and/or put you in touch with commercial real estate experts who focus on the dental industry to save even more money at no additional cost to you.

Dental CPA’s are trained to take full advantage of the tax law for dental practices and they collaborate with other dental vendors to take it several steps further. Like operating your dental practice, there are economies of scale by working with dental practices and working with boutique providers for dentists. Your Dental CPA provides some of these boutique services in-house and will introduce you to dental experts at the right moments of your practice horizon.

If you are searching for a higher level of expertise, visit the Dental Accounting Association website to locate a Dental CPA nearby or contact us and we’ll make an introduction for you.

FREE E-Book – The First Few Transitions as a New Dentist – If you’d like to gain more insight into the lifestages of a dental practice and how a dental CPA can help you minimize your taxes while maximizing your wealth, request our free eBook. It’s free.

Dentists Net Production per Hour and Trends

November 7, 2017 by Hugh Duffy

One of the most important numbers for any dental practice to know is exactly how much the dentist is producing Z - Dental image - open mouth on a daily basis. When you consider that the dental practice is a business and the dentist is the highest-paid employee of that business, it’s important that the dentist is producing at a high level.

Using data from more than 12,500 dental practices compiled by Sikka Software, we have a good indication of how a dentist’s production in the average dental practice is looking. We’ve taken the average over the last seven years and put the numbers below.

Figure 1: Dentist net production per hour, 2010–2016
2010 – $251.31
2011 – $233.43
2012 – $191.35
2013 – $191.66
2014 – $195.04
2015 – $205.57
2016 – $216.24

Both dentist net production and hygiene net production took a massive hit in 2012. Neither have recovered to their levels of 2010.

So what does that mean for you? It means business today is different than it was at the start of this decade. Cash-to-insurance ratio as a method of payment is at an all-time low right now. Your patients are looking to see what is covered by insurance and hesitant to do more than what is covered out of pocket. That means it’s a great time to understand exactly how payment options like the ones provided by CareCredit and other financing companies work.

How can you keep your production at a high level? It’s a critical time for dentists to take a look at their annual budget, says noted practice management consultant Jan Keller.

“When preparing the annual budget each year, knowing the total office production is important in forecasting what both hygiene production and doctor production needs to be for the upcoming year in order to meet our budget and have a profit,” Keller says. “Have a plan in place as to how you will meet your production goals, then know each quarter the goal may increase.”

Z - Dental Office Keller also believes having a strategic plan is critical for today’s dental practice. “You have to have a plan in place to monitor this information,” she said. “You need to be asking questions like, ‘Where are we spending our money each month?’ ‘What can we modify or change if necessary?’ ‘What adjustments do we need to make in our spending to keep costs in line or what specific things can we improve upon to increase our production?’”

Keller also believes it will take a team effort to ensure production stays high at your practice.

“So many times, hygienists are performing more than a prophylaxis but are afraid to discuss the periodontal involvement because of the financial aspect.” Keller said. “The entire team needs to be comfortable not only with the fees of the practice but also in charging for the treatment they are delivering. Having team meetings to work on diagnosis and presentation skills in each department is so important to keep the production numbers high.”

Source – This article was provided for reprint by SIKKA Software. SIKKA is the leading provider of business intelligence software for the dental industry. The Dental Accounting Association utilizes SIKKA intelligence software to provide profit coaching and make recommendations to improve production. To learn more about SIKKA, simply visit www.sikkasoft.com.

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