Six Strategies to Optimise Dental Group Finances

In a recent article published on dentistry.co.uk, financial expert Arun Mehra offers comprehensive insights into optimising financial operations for dental groups, highlighting the critical intersection of clinical excellence and business management.

The Evolving Landscape of Dental Practice Management

Mehra, who co-founded the Neem Tree Dental Group in London and the southeast, explains that dental groups have undergone significant transformations in the past five to 10 years. Practices have typically grown through diverse strategies, including acquisitions, loans, and start-ups, often resulting in a “piecemeal approach” that can create substantial complications.

Strategic Financial Framework

The primary financial objective for dental groups, according to Mehra, is to increase EBITDA (earnings before interest, taxes, depreciation, and amortisation). He emphasises the importance of a cohesive financial structure that can enhance valuation and potential investor interest.

Key Recommendations for Success

Mehra outlines six critical strategies for dental group financial optimisation:

1. Unified Systems: Implement a consistent accounting system across all practices to efficiently track performance metrics.
2. Structured Ownership: Create a holding company with individual limited companies for each practice to maintain clear financial reporting and simplify potential future sales.
3. Technology Integration: Carefully select and implement technological solutions that streamline financial processes, from invoice management to reporting.
4. Advanced Accounting Tools: Leverage modern platforms like Xero, Quickbooks, and complementary apps such as Approvalmax and Dext to automate and enhance financial operations.
5. Team Structure: Develop a strategic financial team, potentially including dedicated bookkeepers, accountants, and financial controllers.
6. Continuous Monitoring: Produce and review management accounts monthly to gain actionable insights into business performance.

The Importance of Financial Visibility

“Without a solid grasp of your numbers and a structured system, you won’t have the visibility needed to grow and develop your business effectively,” Mehra notes, underlining the critical nature of robust financial management.

Conclusion

Mehra’s approach emphasises that successful dental groups must view financial management as more than an administrative task—it’s a strategic imperative for sustainable growth and potential future transactions.

Read the full article here.