It always pays to understand some basic principles of good accounting, even if you employ a professional to handle it for you. Here, experienced dental accountant Geoff Long explains that there are a few key ways to make sure the figures work for you.
Watch your costs and understand where you can cut them
Admittedly, this is a very complex and often tricky area for dental professionals to manage. There are expenses everywhere you look – whether in terms of the ongoing costs of maintaining or paying for your business premises, or the costs of having to buy expensive specialist dental equipment for your practice. So, it isn’t easy to manage and monitor these costs – but it is absolutely essential if you are going to avoid big losses in the long term.
My advice here, of course, is to employ a specialist dental accountant. Not only will they be able to advise you on where you can save in terms of tax relief on certain items, but they will also be able to give you the reassurance that your business is financially watertight. By this, I mean that employing a good dental accountant will give you the peace of mind that comes with knowing that all financial calculations are being made accurately and regularly, and that you are taking advantage of all the potential savings that are available to you.
Review your financial situation regularly – says Geoff Long dental accountant
Again, this is the kind of financial good habit that employing a specialist dental accountant will encourage. So, why are regular financial check ups so key? Well, clearly one of the most important areas is simply around spotting any financial wrongdoing that is going on within your business. While you might think that you know and trust everyone who works for you, it is essential to the financial health of your practice that you monitor what is going on closely.
This is where the expertise of a specialist dental accountant really comes into its own, because fraudulent behaviour or embezzlement is often actually incredibly hard to spot for non-professionals. At my practice, Long & Co, we recommend that a monthly financial check up is the best way to monitor exactly what is going on within your practice. Regular check ups allow us to identify financial patterns that, on their own, may not seem suspicious, but put together might reveal a significant internal issue with your practice.
Know the basics, and understand what different financial terms mean
I want to make final point about financial terms – and that is that it really is well worth putting in the time to understand what the most important ones mean, even if you are employing a specialist accountant.
Why? Well, firstly, because accounting, for good reason, is a profession that employs very specific language to very specific things. There are huge financial and legal implications to the work we do, and so we have to be very precise about the terms we use, and how and when we use them.
This has implications for you too, as you run your practice. For example, if you look at your ‘profit’ column one month and assume that it also represents your ‘cash flow’, you could start spending money your practice doesn’t yet have (or may never have, if the projected work doesn’t happen).
Properly understanding financial terms also allows you to have fully informed conversations with your accountant – ones where you are able to ask them demanding questions about the financial health of your practice, and then be in a position to understand, and act on their answers fully.
Geoff Long is a specialist dental accountant based in Stevenage, Hertfordshire. He advises on a wide range of dental tax issues and regularly writes for the dental press. Geoff has over 20 years’ experience with dentist’s accounts and is recognised for his proactive approach to dental taxation and business problems.
Geoff can be contacted on 01438 722224 or email firstname.lastname@example.org