Are you spending uncontrollably in your business? Are you always raking up expenses on supplies, wages, utility bills, and other overhead costs? When your business is spending money uncontrollably, your income will remain low. The number of patients may be increasing, but if there’s no reduction in your practice’s spending rate, your cash flow will end up being negative. When you properly handle your dental practice finances, you’ll be able to overcome the issues of high spending. Here are some steps you can try to control expenditure in your dental practice:
The first step in controlling expenditure is understanding the actual reasons for such spending. Try to gain a complete understanding of your financial books by carefully going through them. Check everything, from tax payments to insurance, utility bills to patients’ fees, etc. If it’s all cluttered up and confusing, you can hire a dental associate accountant San Diego to properly analyze your practice’s spending.
Identify Where to Reduce Spending
When your financial analysis is accurate, you can identify departments that consume the most money. Recognizing the significant sources of spending gives you an idea of what you have to address when reducing expenditures. However, deciding to cut down on these sources is not always a simple thing. This is because, in most cases, high spending is a result of overhead costs. Your practice overhead is the necessary expenses needed to keep the business up and running. As such, it’s not advisable to take overhead reduction decisions on your own. You should consult with a specialist dental associate accountant in San Diego on steps you can take to reduce or control your overhead spending. Your accountant can tell you areas to cut down on expenditure and advise on converting the money into revenue.
For instance, do you have a large office space/building but use only some parts of the building? You may have to close off the rest of the building till you’re ready to expand, to save on utility costs. Also, those paid magazine subscriptions your practice has, do you need them? Asking and answering questions like these with your accountant can help you identify the best places to reduce expenditure.
Once you identify all causes of high expenditures, it’s time to organize them. Categorize your dental practice expenses in a scale of preference, cutting down on the things you don’t need. Create a spending budget every month, covering all your costs for the period. Don’t just cut costs unrealistically. Ensure that your budget can be followed through and take steps to stick to the account.
Also, the process of expenses reduction and saving money for your practice is not a job for you alone. After identifying and deciding on areas to cut expenses, bring your staff on-board the plan. Make sure that all members of your team are on board with helping the practice control spending.
Most businesses are always looking for ways to save more money and increase income. Your dental practice should be no different. Always run evaluation reports on your finances, or send them to an excellent dental associate accountant in San Diego for proper analysis.