One of the biggest mistakes dentists can make is to confuse revenues with cash flow. You may look at the patients waiting in your packed office and think things must be fine, only to wonder how come you’re so extended on credit lines and why there isn’t enough money to cover your overhead and payroll. Rather than a revenue problem, you might have a cash flow problem. Sure, lots of patients are having lots of procedures…but how are they paying for them?
Obviously, cash flow in a dental practice isn’t completely straightforward; there are many moving parts. Improving cash flow will take effort from the entire team, but when you see your accounts receivable hit an all-time low, it will be worth it.
Here are 5 tips to improve your dental practice cash flow.
Changing the way you do things may involve a little time and work upfront, but will more than pay off in stress reduction down the line. Coupled with adequate reserves to help get your practice through any slow periods, these tips should help you retain staff and simplify operations.