Improve Cash Flow in Your Dental Practice

Does your dental practice suffer from poor cash flow management? Well, you are not alone. Roughly 61% of small businesses worldwide experience cash flow problems that prevent them from growing their business. Whether it’s inefficient payment collections or slow-paying patients, you want to address these problems before they snowball out of control.

In this article, we’ll discuss a couple of tips you can use to improve cash flow in your dental practice and maintain the financial health of your business.

1. Stay on top of patient payments

One of the simplest ways to improve cash flow in your dental practice is to monitor patient payments. The goal is to identify existing problems that cause patients to miss their payments and provide an immediate solution to their needs.

Some of the most common reasons why patients don’t pay are:

  • Financial struggles
  • Unaware of due dates
  • Owed amount unclear

For example, if your patients miss out on their payments because they can’t afford them, you can offer in-house payment plans to ease their burden. On the other hand, if patients routinely forget their monthly dues, you can use dental scheduling software to set automatic reminders.

Ideally, you want to communicate the billing details to your patients before the treatment starts. Provide accurate estimates and ensure they’re fully aware of the overall costs. The easier it is for patients to pay you, the better it will be for your practice’s cash flow.

2. Keep track of your expenses

Managing overhead costs is a big challenge for most dental practices. Regardless of how much revenue you generate, if your expenses are out of control, it can cripple your dental practice. To promote healthy cash flow, you want to reduce overhead costs by looking at the numbers and making specific adjustments.

You can save money by starting with your dental supplies. While brand-name products are the ideal choice, you can save money on house brands without sacrificing quality. Consider switching to cheaper alternatives on consumables such as gloves, cotton rolls, PPE, and hygiene/disinfection products. For items that help you diagnose or treat conditions, choose name-brand products to ensure quality.

Lab fees are a silent killer for your dental practice. You want to keep your lab expenditures under 10% of your practice’s production to maintain a healthy cash flow. If you find the figures are above 10%, you may want to look for a larger dental laboratory that offers reasonable fees.

3. Review your staff’s salary

Staff salaries often come up when discussing budgets for dental practices. While most practice owners will try to save money in this area, the wiser move would be to review your staff’s salary and bump the rates of deserving employees.

The reason? Employee turnover. The dental industry experienced high staff turnover in recent years, and the value of retaining staff is higher than ever.  It’s much better to hold on to a talented employee than to train a new one each time a staff member resigns. While it may increase your outgoing cash flow, you save more money in the long run by running a practice surrounded by dedicated and talented people.

Plus, a well-trained team satisfied with their current pay can help weather your practice through difficult economic hardships (the recent pandemic being a good example).

Cash Flow
Good cash flow management goes a long way in helping you to cover expenses and reinvest in your dental practice.

4. Elevate your marketing

Most dental practices prefer not to spend money on advertising and rely on word-of-mouth to attract new patients. While it’s true that referrals are cheaper to acquire than advertising to new customers, you’re hindering the growth of your practice if you fail to market your services effectively.

There are many ways you can step up your dental practice’s marketing game, and one of those is influencer marketing. Trust and communication are key to attracting new patients, and a credible influencer can help convincingly deliver your message to your target audience. By tapping into the follower base of an established influencer, you can generate brand awareness and get new patients to walk into your practice.

5. Use dental practice software to automate tasks

With an abundance of automation software available to dental practices, it’s wise to leverage these tools to boost production. Dental practice software helps you automate daily tasks and boost the productivity of your staff. By maximizing your practice’s efficiency, you promote healthy cash flow through lower labor costs.

Other benefits of dental practice software include improved patient engagement, accurate recordkeeping, and access to dental marketing tools. By improving upon these areas, you can enhance the patient experience and boost satisfaction rates. A satisfied patient will more than likely refer your services to their friends and family, thus helping to improve the cash flow in your dental practice.

6. Plan for seasonality

To improve cash flow, dental practices must prepare for the various seasons throughout the year. Seasonality in dentistry starts with spring when most patients look to correct imperfections in their teeth before summer arrives. Many dental practices experience a slump in revenue during the fall when school starts, so planning and budgeting are vital to maximize inflow and minimize outflow.

Smart allocation of resources is vital to managing revenue fluctuations. If you know that the dental chairs will fill up next month, it’s wise to stock up on your supplies to accommodate your patients. Once you have a firm grasp of the seasonality trends in your area, you can effectively plan on when to lower expenses and when to spend money to generate more revenue.


Nearly every dental practice faces cash flow problems in one form or another. The good news is there are steps you can take to improve cash flow and maintain the overall health of your business. Hopefully, after reading this article, you’ll become more proactive with managing the money that goes in and out of your business.

Having trouble sorting out your dental practice’s financial records? Don’t worry, our team is here to help! Feel free to fill out the form below, and our team will get in touch with you shortly.

Having trouble sorting out your dental practice’s financial records? Don’t worry, our team is here to help! Feel free to fill out the form below, and our team will get in touch with you shortly.  

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