Inventory Management
Procurement
Method Pay
Analytics & Reporting
Dental practices are at a precipice; insurance payouts are dropping while supply costs are simultaneously rising. In fact, the American Association of Dental Office Management expects these supply costs to skyrocket due to new tariffs.
Keeping up with these rising costs doesn’t need to send you scrambling, it is the unfortunate part of doing business. You must pivot and adjust with the times. Learning to adapt will ensure your practice keeps its doors open for generations to come.
In reality, you cannot control everything, but there are things well within your power. Focusing on what you can control will yield significant results in keeping your expenses low. Smart budget and procurement practices focus energy on controllable factors that directly impact profitability.
Let’s start by highlighting what you cannot control. These are factors that, no matter the amount of stress and worry you allot them, nothing will change of your own volition. Therefore, it’s not worth exhausting any mental effort towards these. These uncontrollable factors include:
The best piece of advice: Don’t waste time and energy fighting unchangeable forces.
Focusing your efforts on what you can control is vital. Picking and choosing your battles is a necessary component to successfully managing your budget. Let’s delve into actionable measures you can take to take command of your budget.
Choosing the right products is important and well within your control. While reducing costs is the goal, there are many items that you must not compromise quality, as this can cost you greatly in the long run. Carefully selecting each product based on its use and performance is an integral component of creating a healthy budget.
Here are some strategies for product selection:
Mastering inventory practices can reduce overhead and eliminate waste. You also want to free up cash flow by limiting what’s tied up in excess inventory, without risking shortages.
Some helpful strategies include:
Understanding your practice’s historical use data is key to mastering your inventory. Running out of certain items is detrimental, yet overstocking can really hinder your purchasing power. Working with accurate data is essential to understanding your limits with each product.
The correct purchasing strategy and vendor choices can also help you maintain a healthy budget. Large vendors may offer better costs but smaller, local distributors may offer better and quicker service. You must find a balance that works for you.
Here are some tips in line with these goals:
With some focus and efficient resource allocation, you can keep overall spending to a minimum. The industry average spending sits between 6-8% of revenue. You can drastically improve profitability if you aim to keep your spending under 5% of your revenue.
For each $1 you are able to save, this can be translated into $3-4 in production value, this is extremely vital to keep in mind. Saving a dollar on sticky notes can have a ripple effect, as that dollar could be spent on more productive and beneficial items.
The best way to limit spending is having an actionable gameplan, and sticking to it. You can keep track of each penny spent and analyze the data over weeks. This way you can correct course if need be.
So how can you implement a successful budgeting strategy?
Simple.
Start with a spend analysis baseline. To fix any problem, you must first identify the problem. Before changing a thing, look at your spending habits over weeks or months; this way you can track tendencies and paint a picture of what needs to be addressed.
After analyzing your typical spending habits, you can identify your biggest areas of need. These are actionable decisions that will see immediate impact. For example, you’re spending a lot on name brand garbage bags when the generic is 70% of the cost. This item is used everyday and is reordered weekly, opting for the generic brand can save you money instantaneously.
Easing into the rest is a breeze. Slowly implement a reordering and inventory strategy that fits your needs without breaking the bank. You can create standardized lists of appropriate products, as well as guides to restrict purchasing to specific times. Keeping your whole team on the same page is vital.
Regularly reviewing the performance and cost of products is vital as well. With uncertainty of supply costs in today’s world of tariffs and trade wars, it’s good to be on top of ever-changing costs and product quality. Keeping a regular review cycle is a good idea to stay ahead of any surprises.
Don’t waste time stressing over factors that you cannot control. Focus that energy towards improving what you can control about your budgeting strategy. Even making small tweaks to your budget can have monumental improvements down the line.
Take control with the right tech. Procurement technology can amplify your control over your budget and streamline your ordering. There are a plethora of procurement platforms available, but you must ensure you pick the one tailored to your specific needs.
By integrating with tools like Method, you can:
Ready to take control of your supply costs? Schedule some time with one of our experts to see how leading practices are transforming supply chain management and budgeting.
