Procurement Return on Investment
Discover how transforming your spend management can deliver radically improved financial returns.
We've reached an era where dentists can no longer depend on automatic growth. The modern dental practice is faced with mounting financial pressure due to stagnant reimbursement rates and increased competition for patients. Many organizations are operating with extremely high levels of overhead, which makes it challenging to grow profitably and drive results to the bottom line.
Does your practice know its overhead?
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
Boost Your Profits with Procurement Savings
Reduce Overhead
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.
Improve Inventory
Eliminating $1,000 a year in obsolete, expired, or lost inventory produces the same financial result as $2,900 in production.
Actively Manage Purchasing
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, and managing incidentals and freight costs. Multi-locations can save even more.
Adopt a Digital Process
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!
