Explore how improving spend management boosts financial returns for dental practices in a competitive market with financial pressures and stagnant reimbursement rates.
It’s probably more than you think. Noted dental economics expert Dr. Roger Levin, DDS indicates the average dental practice bears overhead expenses as 66% of its production*.
This means 66 cents of every dollar your practice makes goes towards funding business operations, including the purchase of equipment and supplies. Even the slightest reduction in overhead will yield an increase in profit for your practice without having to increase production.
*Levin, Roger P. “Data Bites: Dentists cut overhead in 2016.” Dentistry iQ, 13 Sept. 2017
In a typical dental practice with a 34% profit margin, every $100 saved in overhead yields the same profit to its owner as increasing production by $290.
Eliminating $1,000 a year in obsolete, expired, or lost inventory produces the same financial result as $2,900 in production.
A typical location can save $10,000 annually by finding more competitive suppliers of products and services, taking advantage of quoted discounts, promotions, and free products, while also managing incidentals and freight costs. Multi-locations can save even more.
Creating an improved digital process for managing procurement activities can eliminate the costs associated with 25% to 50% of a full-time equivalent employee. At $26,000 per employee per year, this reduction of up to $13,000 delivers the same result as $37,000 in production!
A disciplined and effective procurement process can yield significant financial returns. Method provides a platform to realize these results in your practice.
Negotiate discounts with suppliers and maximize your buying power using our cost analysis tool.
Improve the process of tracking credits for returned supplies.
Hold suppliers accountable for promised pricing and price adjustments, credits, and promotions.
Manage incidental charges through reduced freight or shipping costs as well as ancillary charges not negotiated up front.
Reduce the volume and frequency of orders for supplies by implementing efficient inventory procedures.
Eliminate waste through tracking product expiration dates and preventing over-ordering and inaccurate ordering.
Eliminate invoice inaccuracies by comparing products received for every purchase.
Reduce the administrative effort required to request, approve, order, track, receive and pay for products across all types of suppliers.
Method Procurement Technologies gives independent dental practices and DSOs the inventory management and procurement capabilities they need to succeed. With our full, end-to-end solution, ordering dental supplies is straightforward and hassle-free.
Learn how Method Procurement's spend management solutions can improve your bottom line. Get in touch with our team today or request a demo to see it for yourself.
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