Do's and don'ts for budgeting: Develop a comprehensive budget

2016 11 18 14 42 01 206 Practice Success2 400

As the practice leader, you need to track your overhead and production numbers. Remember, you are the CEO of your practice, so it is up to you to know how your practice is progressing toward its profitability goals. To create a viable budget, analyze past performance and evaluate how it relates to your practice's potential.

Do

Follow the money. The simplest approach to making a budget is to track and then analyze how the practice is spending money. Evaluate where revenues come from and where they go. Track all of the practice's collections and expenditures using practice management or accounting software.

Don

Don't forget to look for ways to reduce spending. Periodically, review what your practice is spending compared with what's budgeted. Look not only for deviations but also for line items that can be reduced or eliminated. Without this kind of scrutiny, overhead can get out of control -- reducing cash flow, profit and income.

Roger P. Levin, DDS, is the founder and CEO of Levin Group, the leading dental practice consulting firm in North America. For the complete list of dates and locations where you can attend his latest seminar, visit www.levingroup.com/gpseminars.

The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.

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