When was the last time you looked at your supply costs and thought, "How did we spend that much…?" If you're like most practice owners, the answer is probably last month. And the month before that. And so on.
Dental practices routinely spend 20-30% more on supplies than they planned. Oftentimes, the root cause isn’t as simple as bad budgeting. Instead, it’s leaving it to their suppliers to help control spending, whether that’s the right cost after volume discounts or sourcing the correct products to keep on budget.
Honestly, that's never going to happen.
Your suppliers are running businesses, and their job is to sell products, not protect your profit margins. Expecting them to help you spend less is like expecting a waiter to advise you against that dessert (though a dentist certainly might).
In this article, we’ll cover how to institute better controls over your spending.
When it comes to overspending, we've seen the same story play out countless times across dental practices.
It usually starts out innocently enough.
A trusted staff member begins ordering supplies without much oversight. They likely do a fine job. However, the trouble starts when you start adding more and more people to the ordering equation.
Once different team members start placing orders—whether at a single location or across multiple locations—the end result is usually the same. Multiple people ordering the same supplies (likely even the same brand) from different suppliers from different prices.
Your practice ends up with five different types of composite because different dentists have their preferences, but nobody's tracking the cost impact.
Then, emergency ordering becomes routine and there are spur of the moment purchasing decisions. That new technology looks amazing at the trade show, but did anyone actually figure out whether it was budgeted for?
Studies show that dental practices can tie up as much as 30% of their annual revenue in inventory. For a practice collecting $1 million annually, that could mean $300,000 sitting on shelves. When spending gets out of control, that number can climb even higher.
The good news is this is more than possible to get under control. Your team can order precisely the materials they want to use from the suppliers they prefer. It just takes intentionality. Here’s how the most successful practices approach it:
Who can place orders in your practice? When should orders be placed? What approval is needed for purchases over certain amounts?
The goal isn’t to drive everyone crazy with loopholes to jump through. Clear ordering protocols prevents exactly the situation outlined above. You avoid costly mistakes while your team remains as productive as ever.
A formulary is a curated list of products, supplies, and sometimes medications that lists what your practice orders and from where.
This avoids the scenario where you end up with six different brands of the same product because everyone has their favorite. Keep in mind you should think of this as less of a blocker and more of a filter.
A formulary should be a living document. For instance, if one of your doctors hears about a new bonding agent, there’s a process in place to evaluate whether it makes sense to add it to the practice. This way you’re not having to get approvals on every single product but still having oversight on what gets ordered.
Set spending thresholds that trigger additional approval. Maybe individual orders under $500 don't need approval, but anything over that amount gets reviewed by the practice manager or owner.
How much did you spend on supplies last month? Which products are you using most? Are you paying different prices for the same items from different suppliers?
If you can't answer these questions quickly, you're flying blind with your spending.
Truth be told, trying to manage all of this manually is a recipe for frustration. The practices that have successfully gained control of their supply spending typically use some form of procurement platform.
The best dental procurement systems on the market provide the visibility and controls needed to manage spending effectively. Features like real-time spending dashboards, automated approval workflows, and price comparison tools make it possible to maintain control without creating administrative burdens.
For example, with a platform like Method, practice managers can see exactly where every dollar is being spent, compare prices across suppliers automatically, and ensure that all purchases follow established protocols. No more surprise supply bills or emergency orders at premium prices.
Ready to take control? Here's where to start:
As the practice owner or manager, you set the tone for spending discipline. This means communicating clear expectations, supporting your team through process changes, and consistently applying your new standards.
Over time, you’ll get closer and closer to ensuring every purchase serves the practice's best interests.
The most successful dental practices understand that controlling supply costs starts with internal systems, not supplier negotiations. Yes, good supplier relationships matter, but they're secondary to having robust internal controls.
When you have clear processes, good data, and the right tools in place, you can maintain spending control regardless of market conditions or supplier sales tactics.
The typical dental practice using Method saves thousands of dollars per location annually. This happens not because we negotiate better prices (though price comparison helps), but because we provide the visibility and control needed to make smarter purchasing decisions.
Ready to take control of your practice's supply spending. Request a demo today to see how Method can help shift your procurement process from reactive to strategic.
