Financial Planning Mistakes Every Dental Accountant Needs to Know About
When it comes to forecasting the future, no dental accountant has a crystal ball in front of them. That said, being able to get a sense of how cash flow and other financial elements may look in the months or years ahead is an exceptional skill, and one that dental accountants can get a great deal of mileage out of. As well-intentioned as many in this position tend to be, however, dental accountants have been known to make a handful of common mistakes, many of which can lead to exponentially larger problems if not properly addressed.
More often than not, it’s better to understand what not to do than anything else. Here are a handful of common financial planning mistakes every dental accountant needs to know about, all of which are avoidable with the right amount of care and attention.
#1 — There’s No Financial Roadmap
Few things matter quite as much as putting together a solid financial roadmap when it comes to understanding how well things are going month after month. If you’re looking to reduce the amount your practice spends and increase income by a certain percentage each month, you need to not only track these numbers, but also set verifiable goals in the process. Increasing cash flow should certainly be a goal, but defining this task will allow you to determine whether or not you’re actually hitting it.
#2 — The Wrong Investment Choices are Being Made
With so many new types of dental equipment becoming available every year, today seems like a veritable golden age for practices looking to make keen investments. Still, investing in expensive equipment is something that should never be done without an extreme amount of caution, as it could turn out to be an utter waste of money if it doesn’t find the amount of use you think it will. Take 3D printing equipment, for example, which can be very beneficial to the modern dental office if it actually gets utilized regularly. By authorizing poor investment choices, you’ll be setting your practice up for failure.
#3 — You’re Not Looking at the Risks
In many cases, dental practice managers and accountants who claim to be risk-averse are actually taking a much larger gamble than they may think. Why? Risk can be found everywhere if you look hard enough for it—in the market, in inflation, in interest rates and elsewhere. Effective financial planning means taking these and other risks into consideration even if they don’t appear to be affecting your practice at the moment. Remember that things can go wrong even if they seem to be on the right path, and that having an exit strategy to avoid risk is always a wise idea.
Making the right moves as a dental accountant can be difficult, but avoiding the wrong moves can be even harder. Practice foresight, and you’ll be doing your practice a huge favor as a result.