Did we lose you at “financial statement”? What may seem like a dull document could be the secret weapon to skyrocket your practice’s success. Let’s take a step back.
Let’s think about this from a different perspective. Think of the dashboard of your car. Your car’s dashboard provides essential information such as speed, fuel level, engine health. This information is imperative to make informed decisions while driving. Imagine driving a car without one. This could leave you stranded on the side of the road without fuel, or with citations for speeding, which are not good things. This is the same power as your financial statement. It is like the financial dashboard for your practice. It gives you the power to make informed decisions for your business. Without the financial statement, it can be difficult to steer your practice in the right direction.
What’s All the Fuss About Financial Statements?
First things first – let’s simplify this beast. Reviewing your financial statement should be a frequent part of your routine as a business owner. It shows how your practice is doing financially over a specific period. But here’s the kicker – it’s not just a rear-view mirror. When used right, it’s your map for the future of your practice!
Why Does it Matter?
We know your business’s financial health and performance is important.
- Practice Performance in Numbers: Every line is a piece of the puzzle. Are there any broken or missing pieces, or do any need to be adjusted?
- Spot Problems: See that weird decrease in collections? Let’s dig deeper.
- Decision making: Do you need to cut costs? Expand your services?
- Sleep Better at Night: Know exactly where you stand financially. No reason to panic!
Making Your Financial Statement Work for You
Now, let’s get to the fun part. How do you turn this paperwork into your key success for your practice?
Learn more: Investing in Your Dream, How Dental CPAs Can Empower Practice Success
Customize It (Yes, You Can Do That!)
Your practice is unique, and your financial statement should be too. Here are some masterful ways to make it yours:
- Revenue Reporting: Show collections by each doctor, if you have multiple doctors in your practice.
- Benchmarking: Compare yourself to other practices. Are you geared for success based on key performance indicators (KPIs)
- Grouping Expenses: When expenses are grouped appropriately on the financial statement, it shows the actual cost. This can be valuable information. For example, staff expenses would include more than payroll. It would consist of payroll taxes and benefit costs.
From Numbers to Action: Conversations That Count
This is where it gets exciting. Your financial statement is a goldmine for important chats about the future of your practice, and even more fun – tax planning:
- Cash Flow Management: ready to upgrade equipment? Predict cash flow in advance!
- Owner Compensation: want to pay yourself more? Your financial statements will tell you how much more is possible
- Tax Talk: DO you need to mitigate taxes? Let’s talk options that save money on taxes but also may benefit your staff, such as retirement plan contributions
- Succession Planning: What’s the future of the practice? Let’s start by looking at your financial statements
Your Dental CPA: Your Partners in Success
Let’s face it – you’re amazing at fixing teeth. But your primary focus should be taking excellent care of your patients, not crunching numbers. This is where a dental-focused CPA like Rea is here comes in. We’re experienced financial advisors helping you get the most from your practice, like:
- Taking full advantage of benefits to minimize tax
- Making decisions on staffing, service offerings and buying new equipment.
- Tailoring your statement to your unique practice needs and goals
- Understanding profitability based on industry benchmarks
- Navigating financial nuances in a typical dental practice
- Planning for the long haul – from expanding your business to your well-deserved retirement days
Ready to Rock Your Finances?
- Take a fresh look at your current statement. Do you know how to find the value in the information it provides?
- Jot down what you wish you could see in your financial report.
- Reach out to a dental CPA like Rea, who speaks your language.
Your financial statement acts as a roadmap. It shows where your practice has been and can help guide where it should go next. Set strategies, adjust the course & achieve your goals!
Together we can build a future of success for your practice!
By Kara Hutcheson (Zanesville Office)