4 forecast & budget tips for Multi-location Dental Practices
Forecasting and Budgeting Tips for Multi-Location Dental Practices
When it comes to driving financial success for your multi-location dental practice, budgeting and forecasting are essential steps. Proper forecasting ensures you’ll have the right amount of money to pay bills, make payroll, and invest in growth. Good budgeting helps you ensure that your carefully tracked and earned cash is put to the most effective use possible.
Unfortunately, when you’re running a multi-location dental practice, budgeting and forecasting often get overlooked because it is time consuming enough just to make sure the basic accounting is getting done. Then, when you reach month-end or even year-end, it’s common to find that your budget and actuals don’t line up.
How do you stay on track to meet your goals? You guessed it—consistent budgeting and forecasting. Here are a few tips to get you started.
Know your history
Use your cash flow statements and other reporting from the past year to analyze what has been typical for your practice. There will be trends over time in terms of cash out – both big and small expenses – and cash in. For example, your pediatric dentistry practice might see a small drop in visits right after the start of the school year, and it might be best not to line this up with large investments or increased expenses. Alternately, you can plan for this and take advantage of the quiet time to improve and invest in your practice. With good budgeting, you’ll have the money when you need it.
Set long-term goals
It’s easy to get caught up in the trivial details, but remember the purpose of a budget is to help you meet long-term goals. While your budgets may be short-term, they should be based on the big-picture vision for your practice.
This is best done by using both your vision and comparing your practice to others in the industry. For example, how does your endodontic practice compare to other endodontists in your region? Comparing with benchmarks is a great way to set realistic goals while staying ahead of the competition.
Use visual analytic tools
It’s important to regularly pay attention to your budget vs. actuals. Our brains are hardwired to understand compelling visuals more quickly and effectively than sets of numbers of a page. Use dashboards to set up visual monitoring of important business metrics. The specific metrics you choose will depend on your practice. For example, for oral and maxillofacial surgeons, you’ll likely find it important to track metrics such as production to operatory chair.
Showing these metrics on dashboards in visual format gives you the option to see the big picture at a glance and drill down for more details. Visuals also make it easier and more impactful to share financial goals and successes with your workers, who play such a critical role in the overall financial success of your practice.
Get help from the experts
Excellent financial management of your dental practice is critical for success. But, it also requires diligence, time, and expertise. At Performance Business Analytics, we specialize in helping single and multi-location dental practices improve their finances, manage their business processes effectively, and plan for the future. Contact us today to speak with an expert about your vision for your dental practice.
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