As a dental organization, you want to provide the highest quality care for your patients. However, you may be overspending if you regularly purchase the newest equipment and technology for your dental practices. Improper budgeting may lead to inefficient inventory management, including shortages and excesses. Dental purchasing software can help you keep track of your inventory and spending to properly budget and optimize inventory management.
Here are three reasons why you may be spending too much on dental supplies.
Proper budgeting is crucial for your bottom line — spend analysis helps you estimate and compare revenue and expenses. Budgets are a way for your dental organization to set financial goals over a defined period and maximize profits and provide a financial guide for your practices so they can ensure to remain within budget. Dental practices typically include these common expenses in budgets:
When creating a dental practice budget, supplies should cover about 5% to 6% of revenue. When overhead costs begin creeping up toward 7%, it's time for your practice to re-evaluate by analyzing areas where you may be overspending.
Method's dental purchasing software can maximize your practice's productivity so you can measure orders against your budget. You'll be able to better control spending by preventing costly mistakes when ordering from suppliers and only buying what you need when you need to. Plus, dental purchasing platforms let you request quotes from several suppliers to find the best price. Analyzing historical data will also help you refine your financial policies to ensure your budget scales with your growing organization.
An essential step in budgeting is gaining an understanding of your current spending habits. Proper spend analysis will help you identify items you can cut out of your budget and where you can find less expensive alternatives. Typical areas where dental practices overspend include:
Although new technological advancements may seem appealing, before making a buying decision, make sure patients will notice and value how the care has improved. If the new equipment isn't going to help you gain or retain patients, you may choose to only purchase new equipment when it needs to be replaced or if it allows you to expand your services. Also, make sure to do your research, and buy the right products the first time.
Method's dental inventory management software tracks your inventory to automate the inventory and spending management processes and reduce overhead. You'll be able to create a stock list to track stock levels, preventing supply shortages and excess inventory that lead to lost revenue. Method's software allows you to start optimizing your inventory management.
Because spending analysis helps you identify where you can cut costs when reordering supplies, you'll be able to improve inventory management and only carry the inventory you need. Intuitive ordering systems will tell you when it's time to reorder supplies. Keeping accurate records is also crucial for analyzing which instruments and materials are most important for your practice's daily operations and will help you better understand what is involved in your day-to-day operations.
Stockpiling extra inventory in your office can impact your bottom line as well. Although you may be attempting to save time and money, ordering too much inventory can increase costs and create physical and operational bloat. It’s suggested you only order about a month's worth of supply, as buying in bulk can also lead to wasted assets just sitting on the shelf. Plus, goods could become expired or damaged when sitting on the shelves for long periods.
When ordering safety stock, take time to evaluate risks and streamline inventory management. Lean inventory management is a method to reduce costs associated with managing inventory. Inventory management becomes more efficient, focusing on continuous improvement to increase value and profits. Lean inventory has five principles:
End-to-end inventory management software automates inventory tracking to ensure accurate inventory counts. Using software will free up your team so they can spend less time manually tracking inventory and more time caring for patients. You'll optimize stock levels to streamline reordering. Inventory management programs help you be proactive when supplies are running low.
If you're tired of overspending on dental supplies and materials, Method is here to help. At Method Procurement, we share your goal of increasing efficiency at your dental organization to help your bottom line. Your practice will experience both hard and soft cost savings with our easy-to-use dental purchasing software. Contact us today or request a demo to learn how our software can increase efficiency and target overspending!
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.