Running your dental practice’s finances can be incredibly difficult, which is why it’s important to know when to accept help and hire an outside consultant. Not only will retaining an accountant ensure that your finances and taxes are handled correctly, but it will free up precious time to allow you to focus on what you do best – dentistry.

In February, Managing Partner Bill Gowie presented to a crowd of dental practice owners at the Montgomery Bucks Dental Society Business Success Symposium on the 10 most common financial mistakes that dental practices make and ways to avoid them.

So, what are these common mistakes, and how can professionals in the dental world combat them? Read on to learn about the first five mistakes in Part I of our Dental Accounting Series.

Not Treating the Practice Like a Small Business

Your practice provides patients with expert dental care, but have you defined your core mission? Identifying your practice’s mission and key messages will help to establish a ‘brand,’ which will ultimately contribute to the success of your practice. In addition, make sure you understand each of your employee’s roles, and what they do specifically to support the business.

Not Understanding Key Financial Terms

Understand the differences between key accounting terms like ‘cash flow’ and ‘profit’ to combat any confusion come time to review your finances. Knowing these terms will also aid you in determining proper spending decisions after your practice’s expenses are met.

Failure to Invest in Training

Investing in you and your employees’ continued education is a key part of keeping a business running smoothly in our fast paced and ever-changing world. Keeping employees up-to-date on the latest industry-related technology and trends are crucial to running a modern business and leveling the playing field.

Incorrectly Recording Transactions

This goes without saying, but you need to make sure every transaction is correctly documented. Maintaining organized records may seem like a no-brainer, but it is always helpful to reiterate the importance of staying on top of your finances. Closing the books is an important step to ensuring transactions are being accounted for properly. If not, these incorrect records will negatively affect all future reports, tax documents and cash figures, and could eventually lead to a more serious offense.

Failure to Share Financial Information with Staff

In the spirit of transparency and mutual trust, keeping employees informed of your practice’s financial health will benefit culture and work ethic. In short, if employees know their workplace is on solid ground, they will be more invested in their contributions.

Those are the first five mistakes Bill frequently sees dental practice owners make. Interested in exploring the next five? Keep an eye on our blog for Part II of our dental series.