Who we serve
Your practice does not behave like a general small business, so it should not be measured like one. Below is how we work by practice type, the overhead ranges a healthy practice runs, and the nine numbers worth checking every month.
The gap nobody sees
Two practices both collect $1.1 million. Both owners work four days. Both are busy, both feel productive, and both check the bank balance at the end of the month and decide the month was fine. One takes home $310,000. The other takes home $118,000. Neither owner can tell you why.
The difference is not production. It is overhead, spread across six or seven categories where a few points each add up to a number that changes a career. Overhead is the most useful diagnostic in dentistry because it is comparable, and comparing it requires a chart of accounts built for a practice rather than a template.
Every single point of overhead you recover on $1,000,000 in collections is $10,000 a year, and it repeats.
Dental
The largest part of our book, and the specialty our benchmarks and chart of accounts were built around.
The core case. Owner-operator producing most of the dentistry, a team of six to twelve, one location, and a profit figure that an S Corporation election usually makes worth optimizing.
Periodontics, endodontics, and pediatric practices too. Higher equipment intensity, different case mix, and receivable behaviour that a general dentistry benchmark will read wrong.
Multi-site operators and owners partway through a roll-up. The reporting has to answer whether each location earns its keep, and the structure has to survive a transaction.
De novo builds and practice purchases. The financial setup in the first ninety days decides how easy the next five years are.
Medical & other healthcare
Different clinical worlds, the same underlying problem: an owner who produces the revenue personally and runs the business at the same time.
Independent practices and physicians leaving hospital employment. Billing complexity is higher, the business-skills gap is wider, and the structure question usually arrives at the same time as the first partner.
Practices carrying real inventory alongside clinical production, where inventory treatment changes the timing of your deductions more than owners expect.
Elective and cash-pay providers, where marketing dependence is higher and a general dentistry benchmark will actively mislead you.
Read the benchmark ranges as a starting point, not a verdict.
A practice in a high-cost metro, a practice doing heavy implant or orthodontic work, and a practice with three associates will all run different numbers legitimately. What matters is not hitting the middle of every range. It is knowing which categories sit outside it and whether that was a decision.
The benchmark
Percentages are of collections, not production. Pull your last twelve months of profit and loss, divide each category by total collections for the same period, and see where you land.
| Category | Healthy range | Watch zone | Action zone | What drives it |
|---|---|---|---|---|
| Staff wages and benefits | 25% to 28% | 29% to 31% | Over 32% | Scheduling efficiency, staffing levels against actual chair time, and wage creep without a matching production increase. |
| Clinical supplies | 5% to 6% | 6.5% to 7.5% | Over 8% | Ordering discipline, inventory controls, and how many people can place an order. |
| Lab fees | 8% to 10% | 10% to 12% | Over 12% | Case mix and fee schedule. High lab with low collections usually means fees are behind. |
| Facility and occupancy | 5% to 7% | 7% to 8.5% | Over 9% | Rent relative to production capacity. Often a square footage problem, not a rent problem. |
| Marketing | 3% to 5% | Under 2% or over 6% | Over 8% | Too low is as much a warning as too high. Under 2% usually means new patient flow is about to soften. |
| Office and administrative | 4% to 6% | 6% to 8% | Over 8% | Software stack sprawl, merchant fees, and subscriptions nobody has audited in three years. |
| Total overhead | 55% to 62% | 62% to 68% | Over 68% | The sum of the decisions above. |
58%
Total overhead in a well-run general practice
71%
Total overhead in a practice that has stopped watching
$143K
Annual difference between those two on $1.1M in collections
The monthly habit
Nine numbers, ten minutes, the first business day of every month. That is the whole habit, and it is the clearest dividing line we see between practices that grow and practices that just stay busy.
| # | The number | How to calculate it | Healthy target |
|---|---|---|---|
| 1 | Collections | Total money actually received this month. | Trending up year over year |
| 2 | Collection ratio | Collections divided by production. | Above 98% |
| 3 | Total overhead | All operating expenses divided by collections. | 55% to 62% |
| 4 | Staff cost | Wages, taxes, and benefits divided by collections. | 25% to 28% |
| 5 | New patients | Count of genuinely new patients seen. | 25 to 50 per month per doctor |
| 6 | Case acceptance | Treatment accepted divided by treatment presented. | Above 70% |
| 7 | Receivables over 90 days | Balance aged past 90 days divided by total receivable. | Under 15% |
| 8 | Days cash on hand | Cash on hand divided by average daily operating expense. | 30 to 60 days |
| 9 | Owner take-home | Salary plus distributions actually paid to you. | Rising with collections |
Books that close monthly are worth ten times books that close annually.
You cannot review numbers that are not finished. If your bookkeeping is chronically behind, that is the first problem to solve, and the review will not work until it is. KLAS clients get these nine metrics calculated, benchmarked, and delivered every month.
By practice type
Dental is the largest part of our book, but not the whole of it. We work with physician and medical group practices, veterinary practices, optometry, med-spas and other cash-pay providers, and allied health. What these have in common is an owner-operator who produces the revenue personally and carries the business at the same time. That combination drives the tax planning, and it is what we are built around.
Directionally, but not literally. A heavy implant or orthodontic practice runs a different lab and supplies profile than general dentistry, an oral surgery practice carries different equipment, and a practice with three associates has a different staff cost line. Benchmarks are a starting point, not a verdict. What matters is knowing which categories sit outside the range and whether you chose that on purpose.
Confirm the categorization before you react. Roughly half the red flags we get sent turn out to be bookkeeping problems rather than spending problems. Lab coded into supplies makes both numbers wrong. After that, look at the trend across three months rather than one, and fix the largest category first. Two points of staff cost is worth more than every subscription you could cancel.
The compliance work multiplies and the reporting has to answer a harder question: whether each location earns its keep. We structure the books so every site can be judged on its own, consolidate for the return, and handle multi-state payroll and filing. Structure decisions also carry more weight, because a group is usually heading toward a transaction of some kind.
Now, ideally in the first ninety days. The setup window is when this is easy to get right: four bank accounts, a dental-specific chart of accounts, state withholding and unemployment registration, quarterly estimates, and the purchase price allocation carried correctly into your depreciation schedule. Fixing those later is a reconstruction project instead of a setup.
The tax planning is similar but the operational picture is not. Cash-pay and elective practices carry different receivable behaviour, different marketing dependence, and often inventory that affects timing. Marketing as a percentage of collections usually needs to run higher than an insurance-driven general practice, and reading that line against a general dentistry benchmark will mislead you.
Send your last twelve months of profit and loss and we will return a benchmark report showing every category against practices your size, flagged green, yellow, or red, with the two categories costing you the most identified. No cost. Or call (844) 552-7100.