A lot of dentists, and business owners in general, talk about their “numbers” but what are the numbers? Often, they are referring to things such as production, net income, or even overhead. But knowing your numbers is crucial to running a profitable business. To know your numbers, your bookkeeping MUST be set up properly and updated on a regular basis and that is where a good bookkeeper is vital to your success.
A good bookkeeper will be able to set up your chart of accounts in such a way that your financial reports will make it very easy to “know your numbers” the way you want to focus on them. With today’s technology you shouldn’t have to wait for quarterly reports to know how your business is doing. To navigate this environment, you need to work closely with your bookkeeper to discuss what numbers are important for you to know. It could be any combination of payroll, overhead, dental supplies, or lab expenses. A Profit and Loss statement can give you good labels for your “numbers,” but a good bookkeeper will be necessary to help explore which ones are the most important to pay attention to.
Knowing your numbers is crucial to a profitable business but what numbers are the ones to watch can be a bit different to each individual business based on your goals and dreams for the business you want to create. A good bookkeeper helps you figure out what those numbers are, and helps you make plans to optimize them.