Practice Transitions - Sunset on your own terms!
Practice Transitions - Sunset on your own terms!
Frye Practice Sales is a Dental Transition and Commercial Real Estate Brokerage. Karl Frye is the Principal Broker and has provided these blog posts for those thinking about taking this step. Enjoy and feel free contact us!
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Getting Your Books Ready Before You Sell Your Practice

10/15/2026 2:28:00 PM   |   Comments: 0   |   Views: 67
If you plan to sell in the next one to three years, ask yourself this: if a buyer's lender opened your books tomorrow, what would they find? Not what you would find. You know where everything is. What would a stranger find when deciding whether to lend someone close to a million dollars to buy your practice?

Buyers pay for proof. Every seller believes there is upside: a younger doctor could add implants, the practice has never marketed. That may be true, but it does not move the price the way clean, verifiable numbers do. Lenders focus on three things.

Collections that are steady. Consistency over several years matters more than one standout year. If this year is trending down, understand why and document it.

True profitability. That means your earnings after normalizing your own compensation and pulling out personal expenses.

Accounts receivable. A large 90 day plus column tells a buyer the front desk is not collecting, and they will price that into the offer.

The most common issue I see is personal expenses. The phones, the vehicle, the family member on payroll. Every practice has some of it, and buyers understand that. But each item has to be identified and documented as an add back to show real profit. Add backs a lender can verify get counted. Add backs that only live in your memory get discounted or thrown out, and that can cost you multiples of the amount in the final price.

A simple year end checklist:
  1. Reconcile production and collections reports with your P&L. Discrepancies make lenders nervous.
  2. Move personal expenses out of the practice, or at least tag each one so your CPA can build a clean add back schedule.
  3. Work your AR now, so those collections land in this year's numbers.
  4. Document your fee schedule and PPO participation so a buyer knows exactly what they are stepping into.
Once the year closes, the numbers are what they are. A few months of attention before year end can make your financials tell the story your practice has earned.

Full article: https://fryepracticesales.com/clean-books-stronger-offers-your-september-financial-tune-up/
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