With insurance reimbursement rates in a state of stagnancy, and rising inflation related to the cost of supplies, dental practices throughout the country are struggling to make ends meet.
Lab and supplies fees have risen steadily, while reimbursements from major insurers simply haven’t been able to keep up. The result? A persistent reduction in profit margins for dental practices who were once able to predict their revenue. Without the help and support of expert accounting for dentists, even those practices that are well established, face dwindling margins that make investing in new technology or developing employees, virtually unthinkable.
Let’s take a more detailed look at some of the biggest pressures related to costs, faced by dentists today:
Supply and lab
More expensive than they were just a couple of years ago, fees for implants, work on crowns and bridges, as well as orthodontic appliances, have risen to become a significant pain point, along with the increased materials, labor and shipping costs incurred by labs that are subsequently passed on to dental practices.
Add controlling the cost of inventory to the equation, and you’ve got a major cost issue for U.S. dental practices of all sizes.
Payroll and staffing
With inflation and a job market that has become increasingly competitive, wage expectations are higher than ever before, making the optimization of employee payroll, a critical task. With payroll often the biggest expense for dental practices, dental practitioners must balance staff scheduling with the flow of patients, ensure that employees are cross-trained, and try to keep payroll costs on a par with industry benchmarks. Fail to do so, and they may have to wave goodbye to any hope of making a profit.
Equipment and facility
Annually climbing, service contracts on such items of equipment as autoclaves, X-ray machines and dental chairs can quickly eat into a practice’s profits. Not accounting for these costs when budgeting, can lead to practice owners delaying much-needed upgrades or dipping into their reserves. The rising cost of utilities is another urgent matter that if not monitored and addressed, can consume monthly revenue.
Delays in insurance reimbursements are more than just an inconvenience for dental practices; they can have a significant impact on their financial wellbeing overall. Let’s take a closer look:
With claims held up while being processed, dental practices struggle with a lack of cashflow to pay employees, rent, and order timely supplies. Many practitioners apply for loans to help them cover the shortfall, adding interest fees to their already diminishing profits.
Fortunately, with help from a dental accounting professional, practices can review their cashflow cycles, claim-submission efficiency, and aged receivables, to help them identify bottlenecks, and put systems in place to reduce the lag associated with reimbursements.
Protecting profit margins with strategic accounting
Working with a dental accountant can help you recover lost profit margins, and here are a couple of the methods they may use:
- Negotiating vendor contracts
An accountant who is familiar with the financials of dental practices, will analyze vendor contracts to push for more favorable pricing or terms of payment.
- Carrying out an expense audit
With the help of dental office accounting, an audit of a dental practices expenses may uncover a range of inefficiencies that can help reduce costs.
Don’t let rising supply costs destroy your profits; regain control of your financial outcomes with guidance from a specialist dental accountant. They’ll help you combat the rising cost of supplies, deal with delays to insurance reimbursements, and better manage expenses from spiralling overheads, to keep your precious profitability intact.