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!
Reduce your overhead for big financial returns
A disciplined and effective procurement process can yield significant financial returns. Method provides a platform to realize these results in your practice.
- Negotiate discounts with suppliers and maximize your buying power using our cost analysis tool.
- Hold suppliers accountable for promised pricing and price adjustments, credits, and promotions.
- Reduce the volume and frequency of orders for supplies by implementing efficient inventory procedures.
- Eliminate invoice inaccuracies by comparing products received for every purchase.
- Improve the process of tracking credits for returned supplies.
- Manage incidental charges through reduced freight or shipping costs as well as ancillary charges not negotiated up front.
- Eliminate waste through tracking product expiration dates and preventing over-ordering and inaccurate ordering.
- Reduce the administrative effort required to request, approve, order, track, receive and pay for products across all types of suppliers.
