Keith Davis was an NFL player turned inspirational and motivational speaker. When talking about budgets he once said: “We didn’t actually overspend our budget. The allocation simply fell short of our expenditure.” While it is a bit humorous, I think actively taking steps to make sure you can fall within your budget is a better idea.
Dental supplies expense is one that can easily be measured and benchmarked. I suggest you start with a budget for the next year and then take steps to try and hit your budget. The below percentages are benchmark percentages based on Fluence clients and they are similar to McGill Advisory benchmarks. These percentages are based on the expense as it relates to collections. So if your collections were $80,000 per month and your benchmark is 7%, then your dental supplies should not exceed $5,600 per month.
- General Dentistry: 6.0%
- Periodontics: 9.0%
- Pediatric Dentistry: 5.1%
- Oral Surgery: 9.3%
- Orthodontics: 8.6%
- Endodontics: 7.1%
While there may be reasons for deviating from these amounts, they are a good place to start. Consider using the percentages to set a budget with your assistant or the individual that does the ordering; there should be only one person ordering supplies. This person should be reviewing the budget with you monthly and should take active steps to stay within the budget.
If you are over budget, there are a couple of things you can do improve. You should work with just one supply house; purchasing from multiple suppliers will lead to over spending. Also, talk to your supply rep and see what they can do for you. Let them know that you are willing to use them exclusively if they can provide you with a discount. When you challenge your dental supply rep to help you lower dental supply expenses, more times than not your supply bills will decrease.
Do not let yourself follow the Keith Davis School of Budgeting; take control of your supply ordering and your bottom line will improve.