Are You Emotional about your Assets?

May 13th, 2013 by Our Experts

Asset ValuationsSmall business owners we work with take pride in their early start up assets: a new office, company car, computers and technology.  But when it comes to valuing those assets BE CAREFUL!  Using estimates, measurements and other valuations of assets can be a sticking point during an audit.  Items such as goodwill and other intangibles are under increasing scrutiny by financial auditors.  A good rule is to discuss such times with your accountant and to keep those assets under a cap that might raise red flags.

Often business owners fall in love with their own assets and want to keep their asset estimates high.  Truth is, that can really become an issue down the road – especially if the business is successful in the long run.  No one wants a young company that is doing well to suddenly become hampered in an audit.  At Foreman & Airhart we work closely with our small and mid-size business customers to ensure that they have a fair and defensible valuation strategy for their assets – real or intangible!

    How Dentists Can Achieve Their Practice Goals

    April 26th, 2013 by Our Experts

    dental accountant, dental accountingSpecializing in Dental Accounting, we are accustomed to dentists asking us how they can achieve their long-term goals for their practice.  Smart dental practices set goals, implement ideas to execute and track their results.  When we look at critical dental practice health metrics we usually want to see:

    New Patient Growth Rates – This is an early warning indicator for overall dental practice health if the practice is not attracting a healthy level of new patients.

    Patient Visit Frequency Rates – Current patients should be seen every 6 -12 months – for their dental health and to ensure you are holding your current clients.  Longer durations between visits can indicate a need to improve patient education, a change in insurance policies, a change in the patient demographics, an economic shift in the patient base or any number of other issues.  It is a metric that needs to be tracked – and when there are deviations, understand WHY.

    % of Lapsed patients Year over Year – Another critical metric for understanding how well the practice is meeting the needs of its patient base.

    Average Patient Age – An change in the patient age base (up or down) may drive new types of dental procedures and can be helpful in planning new staff training and education.

    There are other metrics some dentists review such as time spent/patient visit and revenue per patient or appointment.  Those are important – but for LONG TERM goals, we like to look at the metrics above.

    For practices that want to manage their growth, they need to implement marketing and service platforms that will attract and retain patients.  Among the many new options for dental practices are:

    • Shareable Facebook content – to educate and raise awareness.
    • Regular website and social media refreshes – to stay current and relevant
    • Regular dental office design updates – to make appointments more enjoyable and productive by implementing free wi-fi and iPads in the waiting room and texting appointment reminders to cell phones.

      How Dentists Can Reduce Cancellations

      April 15th, 2013 by Our Experts

      dental accountant, dental accounting

      The path for profitability in a dental practice is time management. The more appointment you book the more opportunity there is to generate revenue for the practice. Timeis the medium and expertise is the product. However, as everyone in the medical and dental field knows missed appointments or patients that show up late can disrupt the most effective time management plans.  The goal for every Minneapolis and Minnesota dentist is to keep the appointment calendar and filled as possible and to minimizde missed appointments (non-billable time).  Although there are no 100% guaranteed ways to prevent cancellations and no-shows (let’s face it clients will always have legitimate issues, challenges or problems that preclude them from making their appointment). However, there are some basic things your office staff can do to ensure the appointment misses are kept to a minimum. These include:

      1.  Business assistants must be proactive in identifying patients with a history of disappointment or late cancellation. Nondependable patients must be dealt with differently than dependable patients.
      2. It is unacceptable to leave reminder messages for any patient who has a history of cancellation/disappointment or new patients. You must speak to these patients directly, even if it requires a call after regular business hours.
      3. Do not allow patients with questionable dependability to preschedule hygiene appointments six months into the future. Send these patients a reminder card when it is almost time for their visit with instructions to call the office for an appointment. These patients provide a ready source of patients who can fill openings in the immediate schedule.
      4. Do not use the phrase “confirmation call.” Consider the appointment confirmed when the patient gives permission to be placed in the schedule. Calls made prior to the appointment are “courtesy reminder calls.”
      5.  During face-to-face contact, ask the patient if he or she would like a “courtesy reminder call.” If the patient says no, a reminder call is not needed. The business assistant can say, “Great; I’ll make a note of that. Thank you for being dependable.”
      6.  Build a database of patient email addresses and offer email or text message reminders. Always ask your patients’ permission before sending text messages, as some incur additional phone charges and may not wish to receive texts. This is a strategy that many of our clients are currently using and it is an effective way to be “present” and proactive in communicating with clients.

      Remember the key is to find a process for reducing the amount of cancellations your practice faces. The items listed above are merely strategies for staying ahead of problem situations. If you have idenitified an effective method for controlling this situation, please let is know. Foreman & Airhart is interested in hearing about your practice is doing.

       

       

      Adapted from an article that appeared on Dentistry IQ. Edited and reprinted with permission.

        Not All IRS Audits are the Same

        April 12th, 2013 by Our Experts

        IRS Audits

         

        Not all IRS audits are the same. Not all tax return issues involve the same complexity or require the same level of scrutiny.

         

        The IRS, in its effort to enforce the income tax laws of the Unites States, has three different types of audit examinations in its arsenal:

            1. Correspondence examinations
            2. Office examinations
            3. Field examinations

        Correspondence examinations are conducted entirely through the mail. (The IRS NEVER uses e-mail to correspond with taxpayers.) Since this audit requires less involvement from IRS examiners it is being used more frequently by the budget strapped IRS. This method is considered the ‘work horse’ of the IRS’s tools.

        Office examinations involve small businesses or individual income tax returns that predominantly include sole proprietorships. Office examinations generally take place at the IRS office located nearest to where the taxpayer maintains its financial records. Once the IRS has selected a tax return for office examination, the return is assigned to an examiner and scheduled. Office examinations are conducted primarily by interview. The taxpayer will provide certain records to support the items on the tax return. During this process, an examiner might ask a taxpayer to explain certain items such as insufficiently substantiated charitable contributions or itemized deductions which appear to be disproportionate to the taxpayers reported gross income.

        Field examinations are initiated by sending a letter 2205 or 3572 which lays out the issues to be examined and lists a specific IRS agent as the point of contact. Sometimes the taxpayer will receive a telephone call from the field agent prior to receiving the letter. The taxpayer has 10 days to schedule an interview.

        It is advisable to have your CPA represent you with any IRS interaction. This will ensure that the audit will be conducted in an efficient manner and that any adjustments are verified and agreed to by your CPA representative.

        Things to remember: There is a 3 year statute of limitations on all tax returns filed with the IRS. (beginning with the date of filing)

         

          Red Flags – Before Buying a Dental Practice

          April 8th, 2013 by Our Experts

          Great care should be taken when investigating the purchase of a dental practice. The most important steps in this process are the due diligence steps — the buyer should spend time looking for and understanding the positives within the practice. Opportunities and potential can enhance the value when those assets are understood and acted upon. But a potential buyer should also be on the lookout for red flags. While these flags may not necessarily be deal-breakers, a potential buyer should be able to identify them when they arise so that he or she can fully investigate them.

          1. Pressure to close quickly — While no one wants the process to drag out, undue pressure to get a deal closed can be a red flag. What’s the hurry? Is there something the seller is trying to hide? Take your time in assessing the practice — you may own it for the next 30 years!
          2. The seller won’t share information with you — If the seller won’t share information, this is a problem. You need to know what you’re buying. Don’t go through the purchase blindly. Many times the seller is concerned about revealing confidential information. While that is a legitimate concern, you as the buyer shouldn’t care. You need to make a thorough assessment with as much relevant information as possible.
          3. Declining production — This can sometimes easily be explained, for instance, the seller cut back some hours or days. However, be sure to understand, especially if there is a year-over-year increase that has occurred.
          4. Poor patient retention/patient recall — In a general dental practice, poor patient retention and patient recall is usually not good. Dig further and look at patient records and charts. Why are patients not returning? Are they going elsewhere, and if so, why? Oftentimes, the staff will have a good feel for particular patients, so these can be good questions to ask them.
          5. High employee turnover — High employee turnover is generally not good for a practice, but it can occur for many different reasons. If employees at the practice you’re investigating don’t stay long, find out why. Are they paid below market? Does the seller have a poor management style? Does the office have an unfavorable culture/environment? Are there disagreements over treatment styles?

          Knowing what red flags to watch for, and then being able to identify them is just part of the battle. Digging into them and understanding them is the other part. Be sure you do both in order to acquire a successful dental practice acquisition!

           

          Reprinted with Permission from Dental IQ 

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            Are You Emotional About Your Assets?
            Small business owners we work with take pride in their early start up assets: a new office, company car, computers and technology.

            How Dentists Can Achieve Their Practice Goals
            Specializing in Dental Accounting, we are accustomed to dentists asking us how they can achieve their long-term goals.....

            How Dentists Can Reduce Cancellations
            The path for profitability in a dental practice is time management. The more appointment you book the more opportunity there is to.....

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