Ever feel like money is disappearing from your practice? Tiff and Dana share where practices tend to find that missing money, as well as how to trim down those expenses.
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Transcript:
The Dental A Team (00:00)
Hello, Dental A Team listeners. I always want to say on that opening, Hello@TheDentalATeam.com and I have to really think about it. Hello, Dental A Team listeners. We are back here. Dana and I have been on a podcasting frenzy we love these days and then we're like out of breath and I also love that because it feels like productive and anaerobic. So I'll take it. I've got Dana here with us today. Dana, thank you so much for riffing with me today, for being here, for blocking out your morning, for podcasting and just
All awesome, awesome. Thank you for being an awesome part of this team. We were literally just talking about how my brain just is like ping pong, ping pong, and then I won't finish a statement. That was it. That was me proving to you that that really happens real life. So, and don't cut that podcast team, whatever. Dana, how are you today?
DAT-Dana (00:38)
you
doing really good. am honestly and truly, I feel like today we've rift a lot and we've come up with some really great, I think, content ideas for doctors and teams. And so, so far, I'm super proud of us today.
The Dental A Team (01:01)
I agree. I agree. think the marketing one, if you guys haven't listened to the marketing matters, I believe that's what they're calling it. But there's a marketing one that Dana and I just did. I actually, I think that was one of our best podcasts. That was so good. So good. And KPIs again, I know we talk about KPIs a lot, but we really went on a very good tangent of inspiration versus motivation for those KPIs. So I agree. I think it's been fun. And I love talking profit now.
Dana, I think you and I have grown to love profit. Not that we didn't love profit before, but I think we've grown to really, really see some high value in the profit side and just love finding it and talking about it more than we ever did before. So I want to talk about profit today. And we talked about it a lot. It's a huge piece of Dental A Team's Magic Sauce is really, really working systems and
logistics and business and leadership to turn into profit because at the end of the day, that's the only way the business is going to survive. And Dana, when we talk about profit, think teams tend to be like, okay. And I think doctors think teams hate it, that they don't want to hear about it, that they don't want to know that it's like, yeah, that's going in your pocket. But the reality is most teams want to know that their business is profitable because most teams
want a place to work, if nothing else. They want a profitable company because it guarantees that they get to stay where they're at. And if you guys have, you know, we talked about that inspiring why earlier, and if you've got a really inspiring place, you've got a place that people want to work, they want you to be profitable so that they can keep working there.
DAT-Dana (02:44)
I agree with you. And doctors, if you feel like your team doesn't care about profit, then it's because they don't understand what profit means to them. And so I think that instead of so often, doctors just shy away from it. And I think instead of shying away from it, make sure that they know what that profit means to them. Because Tiff and I can say, hey, we know and hands down, you're right, Tiff, like people are going to pick job security, right? They're going to want to be in an office that has job security. Do they know that that's profit? Probably not.
The Dental A Team (03:09)
Yeah.
DAT-Dana (03:13)
Right? And so somebody says something about that or like that. Do they want to grow in their position? Yep, they probably do. Do they know that that comes from profit? Maybe not. And so I think sometimes it's just like, hey, my team. Well, if your team doesn't want to talk about profit or you think they don't care, it's probably just because they don't understand that profit drastically impacts their lives too.
The Dental A Team (03:35)
Totally agree. That was massive, massive. And that's the space of really understanding the intentionality behind what you're doing. So if you intend for the team to understand profit, then they will. You'll say the words and they'll understand it. profit turns into not only job security, but it also turns into being able to invest in more tech, more, I don't know, chairs. Oh my gosh, do know how many times as a front office team member I was like, can I just get a new chair? My back hurts so bad.
And they were like, well, let's look at the budget. I'm like, cool, what do I have to do to get a new chair? But those things all come from that profit because we can't spend what we don't have. And so teams really understanding what that turns into and also like how can we impact the community? We've got kids sports teams coming in saying, can you ? sponsor our team? Can you do night guards? Can you do this? Like we wanna be able to say yes to all of those things and that comes from the profit.
Now you know our stance on profit, but Dina, what about disappearing profit? I've had actually, I've had this come up a couple of times. I've had a couple of emails from doctors that they're like, I can't find the money from 2025. I don't know where it went. I should have had X amount of dollars, 400, $600,000 and it's gone. I'm like, okay, well let's look for it. And Dina...
Love those and I hate them because I'm like, well, what do we do for a year? Where what were we doing here? Okay, so I have you know, I have my ideas on where it goes and and we dig and we find it we usually find it but Dana Where do you see the biggest question marks on when doctors say where's the profit? Like where the biggest question marks? Where do you start digging and where are you usually finding it?
DAT-Dana (05:01)
Yeah, it usually leads to a rabbit hole, but...
Yeah, typically I am digging first and foremost into just like expenses, right? Like where did expenses fluctuate? Did we spend more than we needed to or did we spend in arbitrary areas just because we weren't keeping track of it? So honestly and truly, do you know what your BAM is and can you assess very easily or quickly like months where it is?
well below well above right so that you can kind of watch those flexes. just worked with an office on this not that long ago and I'm like hey from January to March expenses swung by $100,000 right like what happened let's dig in here because those giant fluctuations to me are a red flag of like hey we're not watching something or something got overcharged double charged things like that so I think the first place to tackle is just like knowing those things like knowing what
the profit should be, knowing what the expenses should be and are you, do you have a cadence where you are looking, reviewing? Because I think what happens is we hire a CPA, we get into QuickBooks, everything auto syncs into QuickBooks and we just kind of like set it and forget it.
And I think that like we don't know that sometimes hey things can swing that Gigantically if we're not looking at those things and we're not looking at those prior to making decisions, right? We're not looking those before we're like, hey, yeah, you can have a raise or hey Yeah, I want that cvct writer. Yep. Let's it's time to mill same-day crowns and we didn't look at that now We're in a big swing of expenses
The Dental A Team (06:51)
Yeah.
DAT-Dana (06:52)
So I do feel like making sure that all of that is to say, making sure that you know what your numbers are when it comes to expenses every month where they should sit roughly and honestly and truly what you're spending all your money on.
The Dental A Team (07:06)
Yeah, I have practices Dana that have Amazon Prime. I think everybody has Amazon Prime. My sister and I canceled Amazon Prime actually, and we just have Amazon, which is wild. And every time you try to purchase something, they try to sign you up for Amazon Prime. But it's kind of like, it honestly reminds me of all of the financial stuff you've done with all of the companies we don't have to name. But ? it reminds me of those because you really second guess the purchase.
And then you're like, okay, well, let me let it sit in the cart for a minute. And then you go back in, you're like, why did I even have this here? Or I'll throw stuff in the safe for later because I'm like, well, it's not on sale right now. And I'm not gonna get it today. So do I really need it? So I'll put it in the safe for later. But I have practices that are so Amazon Prime ready that they're like, we need paper. I'll just order it real quick.
we need pens. you like those pens better? You like the Sharpie pens? I'll order those on Amazon real quick and we'll have them here tomorrow. Right? So they're just constantly processing these Amazon orders. And then what happens, I have a practice that was like Amazon galore. I'm like, where is all of this money? Like what is happening here? And then what happens is you've got some demo supplies, some front office supplies. It's impossible to like see the difference because of how you're placing the orders. It's just this constant running battle or Walmart. I'll have
practices that are like, we have a list. So I just sent Joanna to Walmart and I'm like, okay, but why aren't these on orders? And we say, we watch the dental supply budget and ordering really closely. And we'll say order two times a month. Once is phenomenal, two times a month max order your dental supplies.
but then we forget those front office supplies and they're sneaky or the paper towels or the toilet paper or just those like paper supplies, they're sneaky. And I have seen that happen where the practice literally had to be like, okay, we're revoking Amazon and you're gonna send in a list just like you do for dental office supplies. And we will both order the same as we do for dental office supplies.
DAT-Dana (09:08)
Yeah, you're so funny that I have an office where it was like, okay, well, you hit your you hit your dental supplies, you hit your office supply budgets. But like, what is this? ? that's Amazon. And I'm like, Okay, but what did we order from Amazon? Like, how much of that was dental supplies, office supplies, like stuff for the team? Like, where do we need to that? then I know that's just Amazon. I'm like, No, but that's money spent. And it's spent in one of these categories. And it should be part of your budget for those guys. Like
If you need an Amazon budget, right? If that has to be a thing, fine, we can set one up, but understand that that's coming out of all these other buckets.
The Dental A Team (09:40)
Crap.
Correct,
yes. Or if your Amazon is your personal Amazon too, and it's getting run through the same and whatever. Yes, I agree. I agree. I have a couple of practices too that I have like a small equipment budget because they'll add that into their supplies. And it's like their supplies are 18 % one month. And I'm like, what the heck? I'm like, you can't just, if you need hand pieces.
We need a budget for handpieces. You can't just order Cabotron tips because we need Cabotron tips. We've got to look at it and we've got to budget that in and make sure that we have the cash for it. So I totally agree. Another one, think, are subscriptions. So the Amazon Prime is a subscription, so make sure that that's in there as well. But we get hit with a lot of subscriptions. I remember this is like an update.
me mostly, but I remember magazine subscriptions, right? And it was like, what the heck? We would pay monthly for magazine subscriptions and then you found out like they're gonna send them to you anyway, so cancel the subscriptions and they're gonna send you the magazines no matter what and I don't think anybody's reading magazines. So those kind of subscriptions, gosh, a lot of people will have like a Uber Eats subscription for the practice or a DoorDash subscription for the practice. Are those necessary subscriptions?
And what are we paying out of convenience that's getting used sometimes that doesn't need to be there? So I think subscriptions and then allocating supply orders correctly.
DAT-Dana (11:05)
Yeah, and I even think office tech subscriptions too, like how, you know, patient communication and then like review requests and then, and sometimes like we can bundle those and get a better dealer. Sometimes it's like, hey, well, this does this, but this also does part of that. And like, we're just overlapping a lot of those things. And so can we condense them into one thing? So I think even just looking at like your office tech, because oftentimes like those are a big chunk of budgets and I'm like, Hey, but are you utilizing that? Like, yes, you've got this, you've got this
The Dental A Team (11:09)
Yeah.
DAT-Dana (11:33)
review subscription, is great. But like if we're asking in person and we don't feel like, I just think sometimes we have these things just because they sound fantastic, but we're only using a very, like a small fraction of it. And there's oftentimes a workaround on that small fraction that like, again, we can just reduce because we don't necessarily, we aren't using it consistently or it overlaps with something else that we have.
The Dental A Team (11:46)
I agree with that.
Totally agree. That makes me think of like some of the analytics companies, you know, high cost that also have patient communications, right? So, but then we've got a patient communication platform, like maybe Weave or something. We're like, well, but like Weave doesn't connect with this piece well, or it doesn't pull this report, right? So we have this one that's pulling the reports, Weave that I can do text messages and emails from. So I don't use it over here, but I don't use that over here. And we're paying thousands of dollars between two.
two models, well, is there a third model that maybe encompasses both or can we, what can we shift around? So I totally agree. That happens a lot actually. Or people will have the dental intel or the Adit. love Adit. So they'll have Adit and they're like, okay, well I get my reports and I can pull all my data. Should I sign up with whatever company for text messaging? And I'm like, well, what Adit does that.
DAT-Dana (12:34)
Mm-hmm. Yeah.
The Dental A Team (12:56)
Right, like most of the analytic companies these days, it wasn't that way. When I was in practice, it wasn't that way. So it's been pretty recent within the last, I would say three to five years that the analytics companies started piecing all of those things together or vice versa. The communication systems are now doing analytics too. So I think they don't know, but it's a huge space of savings, especially because those analytics, they're expensive.
DAT-Dana (13:19)
Yeah, I agree with you. And, and all those platforms are great. It's just which one works best for you. And which one will you get the most bang out of for what you're paying in that monthly subscription? Because yes, they all do the same thing, but yet also a variety of other things. And so like which package best fits your office. And I think just even annually assessing that and annually looking at your tech bundles and like, are we utilizing it? Is it a better platform? Because they're all fantastic platforms. It's just what you're going to use within your practice.
The Dental A Team (13:25)
cracks.
Totally agree. It's like the cable subscriptions, right? We used to get hit with those with the wifi and the cable and the phone and these bundles. And the next thing you know, you're $30 more and you didn't even realize that it had changed. I totally agree with you. Yeah. So subscriptions, supply costs, something that I find. And I think a lot of people tackle this one first. They'll look at like employee costs. So what's my staff cost? And totally yes. Watch for overtime. I also like to caveat.
Overtime typically means that there's a systems failure because we should be able to get the work that we need done and the amount of time that we have. And so, Dana, I often see overtime as understaffed or incorrectly staffed. maybe our job descriptions aren't clear. Maybe there's someone that's doing everything. Everybody else is leaving at 4 p.m.
when the patients are gone and then that person's there till six cleaning things up. So over time, definitely, I definitely watch that and I look at staff costs, but it honestly is one of the last places that I look because we need the people there to produce what we're producing. And then, ? Dana, taxes, taxes. You guys, I have a practice that I love so much. I have got a two or three practices this year that is like, my gosh, where'd the money go? And I'm like, well, you...
had $600,000 of taxes last year that you paid for 2024, and then you also paid your 2025 taxes. So you made up for what you were lacking the year before. But remember that auto email that I've got going out, or remember how many times we talked about, did you put the savings aside for your taxes? If you put the savings aside for your taxes and you paid out of that savings, it is still going to show up on your P &L. That does not mean that that money is gone. It just means that it was used over here.
and you should still be saving for your taxes. But Dana, I think that is one of the biggest spaces that doctors or business owners in general, because I've seen even, we've worked with non dental offices that they quote unquote lose their money because they had to pay taxes.
DAT-Dana (15:55)
Yeah, and I will say too, an even something that I think I noticed in a trend in that is like taxes on their personal distribution, right? Because it's like, ? I pay payroll taxes and and like they know they have to pay business taxes, right? But depending on how they structure paying themselves, we kind of forget that we
The Dental A Team (16:05)
? yes, yes.
DAT-Dana (16:15)
to pay taxes on our own personal distributions or how we pay ourselves because, for team and all those, they're just like auto deductions and auto things that come out on our P &L and we see our pay, right? We see our pay come out, but what we don't see come out and we sometimes forget is that we are taxed on the money that we pay ourselves. So doctors, that's just like also I see that.
The Dental A Team (16:16)
Yes. Yep.
Yep.
DAT-Dana (16:38)
having a lot, but it's like, oh, well, I was prepared for taxes, but we forgot. Like, yes, we were prepared for the business taxes, but we weren't really prepared for the taxes on our personal income that came from the practice.
The Dental A Team (16:50)
Yes, or vice versa. Karen and I were literally just talking about this on Friday, we went for a walk after summit and she was like, gosh, like CPAs, like just need CPAs to like get it all. And I'm like, well, I think CPAs are either like thinking of the business or they're thinking of your personal taxes. And it kind of, does suck, but you can't rely on one person or one entity to do it all for you. You know, you've got, we've got multiple people looking at it and you've got to be responsible to your money. So a lot of CPAs are like,
you know, yes, you've got your personal taken care of. And then you get hit with $400,000 of business taxes. Or they're like, awesome, we've got your business taxes taken care of. And here's your $200,000 of your personal taxes. And that's like, no matter what, something's going to come up short. So just know, this is what I need to save for. I'm going to save 40 % on the side. And if I don't have to pay 40%, cool. I've got savings for next year, or go spend it. I don't care what you do with it, but you've
you've prepped and you've saved for those taxes because that is the biggest space. Legitimately, I have an office that was missing X amount of dollars. And when we looked at the tax payments, it was X amount of dollars. It literally equaled out. It's like there was your profit because you weren't prepped for those 2025 taxes. Now it's 2026. You know, we're we're backlogging. So, yep.
DAT-Dana (18:06)
Yeah. And I think we
hire like we bring on CPAs, we bring on financial advisors, we bring on all these things, but the end of the day, like they don't know you as a human. And so it's your responsibility to to like share like what kind of human you are with them. And so like if they're setting up that you take individual distributions, and you know that like, if money gets tight, you're not going to sit that aside, and you're not going to put it in a savings account for taxes, like, say that I think that sometimes like
The Dental A Team (18:31)
Yeah.
DAT-Dana (18:32)
Yes, they're going to give you advice based on like what our best practices or what they feel like will set you up for the most tax savings or the most tax success. But you know you as a person too. And if you know that you're not a great saver, maybe a personal distribution really and honestly and truly isn't the best thing for you, even if that's what they advise. So I think also to like know yourself, be able to communicate those things and make sure that the advice that they're giving you or the directions that they're giving you is something that you will truly do too.
The Dental A Team (18:50)
Totally.
Yeah, I totally agree with you. Totally. we can't see. Maybe they can. But that's not their job to check and see did you move that money. I know a financial advisor that gets asked a lot that they're like, well, shouldn't my savings be those? He's like, I don't know. I don't know what you're doing with your savings. I advise you on what you should do. I'm not the one that's moving the money. I'm not your money manager.
And so we do the same thing. We advise you on what you should be doing, but I'm not in your accounts nor do I want to be in your accounts seeing what you're actually doing. I'm trusting that you're taking the advice and you're moving forward. And when I ask, did you do the thing and you say yes, I'm trusting that you did it. So huge caveat, I love that. And then honestly, last but not least, and this is why I do not tackle employee cost first is collections.
Oh my gosh, I have so many practices that are like, Tiff, where's my cashflow? And we look at it and I'm like, well, where are your KPIs? Because your collections right now is less than 90%. Like where, where's that? And your month's fluctuating is going to, can create cashflow like month by month stretches, like a little skimping here or overflow here. But on average, you should be at 90 % or higher collections. And Dana?
I think collections is a very overlooked space when it comes to the P &L because we're thinking they don't think about the collections. They just think about, okay, this is my P &L and it's like it's a separate entity. At that point, they get the P &L and it's totally separate from the practice. Like that doesn't, the practice doesn't matter anymore. This is the P &L, but they have to be smashed together.
DAT-Dana (20:20)
Yeah.
Yeah, they do. I think too, like collections, feel like doctors always tend to just like look at production because it's the one thing they can control, right? It's it's the thing that they can really control, tackle, push for. And so I feel like that's a number that they look at heavily. And then I think collections, right? Yes, which doctors understand that collections is the money in the bank, right? I think we understand that concept, but we don't necessarily look at the health.
The Dental A Team (20:44)
Yeah. Yep.
DAT-Dana (21:02)
of the collections within the practice. And you're absolutely right that like, can we cut all over time? Can we look at team and say, look, no more over time, right? But if the overtime is what they were using to get the collections to 98%, right? Versus 87 % without it, right? Then maybe that's not the thing that we've got to tackle. We've got to look at that collections network.
The Dental A Team (21:18)
Mm-hmm.
Yeah.
DAT-Dana (21:26)
Or we can say, like, yeah, we can cut our supply budget and you can take a supply budget from 6 % to 5%. But is that gonna move the needle as much as taking your collections from 85 to 98?
The Dental A Team (21:33)
Pressure.
Correct. I love that. with that, go look at your collections. That was massive, Dana. Thank you. I love when I can get you on a soapbox and you're like, just go do the thing. And that was beautiful. Thank you. So disappearing profit, is a thing. Not having cash flow, it is a thing. Is it normal? Normal? Like, yeah, we see it. Is it what you should have? No, no. You should know your numbers forwards and backwards. If you're at summit.
You know that if you were not at Summit, you should be at our virtual events. They're freaking awesome. Our in-person events are amazing. We literally go through line item, PNLs at most of our in-person events for this reason, because there's always just something hidden. There's just like when you comb through your personal bank account and you're like, my gosh, or when you use Apple credit card to pay for everything. And then you're like, my gosh, now I got to pay my credit card off. And how did I spend $2,000 this month? Because it was easy.
It's easy to say yes to Amazon Prime and just order it right now instead of waiting and saving. So go through, comb through. You should do this quarterly. Make sure that at least yearly, I would do it quarterly. Make sure that things make sense. There's nothing that's been hidden in there. There's nothing that's orders are duplicated. There's not subscriptions that you shouldn't have and that your collections, you should be looking at that constantly. And you should be looking at that with your KPI.
reports, your scorecards with your consultant. If you're a client of ours and you don't know what I'm talking about, get on your consultant because you should. Especially Dana and I's clients. If you're out there, we love you and you just let us know. I think.
Action items, pull your P &L. It's where out of Q1, you've got a whole quarter to look at, you've got a quarter and then some at this point to look at, and we're coming up on the end of Q2, so it comes up really quickly. Go look at it, look to see, are there things that you can bundle? Or do you have a bunch of subscriptions that, you know, you've got multiple different companies overlapping that you can use one or two rather than five? Are you using the scanner that you're paying the monthly subscription for? Are you using all the things that you're paying for?
Is there anything that you can reduce and what is your collections at? If you can say yes, you've done both of those things and your collections is where it should be. Now we're going to take a look at, is your schedule full? There's so many layers. Like we're going to take a look now at production, team, like really how big is your team and do you have enough production to support the team that you have? So Dana, anything you'd like to add?
DAT-Dana (24:10)
this, I think just like you said, know those numbers inside and out, look at these things regularly, evaluate expenses on a quarterly basis, ? and take a look at those subscriptions because they can hit us hard as well as those taxes.
The Dental A Team (24:26)
They're sneaky. Both of those are sneaky. Awesome. Thank you, Dana. All right, everyone, go leave us a five star review. You know, we love to see those. We love to know that this content was awesome for you. Let us know any tricks or tips that you have as well or things that are working well for you. Hello@TheDentalATeam.com. When you're ready, if you are not yet a client and you're ready to find that disappearing profit, reach out. You guys, we are like hounds when it comes to this stuff and really freaking good at our jobs. So the systems behind the numbers and the systems behind the money,
We will help you figure out what's working, what's not working and get you in the best shape of your life. Dana, thank you so much for today and everyone, we will catch you next time.