Maintenance and Other Operating Expenses

MAINTENANCE AND OTHER OPERATING EXPENCES

Prepare a maintenance and service schedule for the whole practice

Identify w/c task should be done by the dentist and w/c by other members of the practice staff

Set goals for these maintenance intervals eg. Weekly, monthly,6-monthly, annually, etc.

Find out what materials/supplies are needed for the maintenance

Ensure that the practice has an effective tool-kit w/ an appropriate range of tools to fit every item of equipment in the practice

To minimize in convenience to patients and lost practice income you would prefer maintenance to be done in the evening or at weekends

In your budget forecast, you should have made realistic provisions for routine repairs, renewals and maintenance

Monitor your actual cost and compare them w/ your budget

In regular routine maintenance, one can schedule time for well advance at appropriate intervals w/c there is always the unforeseen repair

Staff should report any repair/maintenance task that they noticed by having a fix-it book

To identify suitable time-blocks for specific task

To maximize effectiveness use of time

CONTINGENCY PLANNING

Contingency handbook provides details of each item of equipment, and summarizes what to do if it goes wrong

Simple faults and how to rectify themSpares and accessories held (bulbs, etc)

where to find them in the practice and how to fit/use them.

What are the possible options to do if a more serious fault occurs

Who to contact to effect a repair or obtain loan equipment.

OVERHEADIs an operating expenses associated with running the dental practiceIt includes:

Rent or mortage paymentProperty taxesPayrollIndependent contractor expensesOutside consultantsSuppliesDental lab bills and utility bills, etc.

FIXED EXPENSES

Includes those office expenses w/c remain fairly constant from month to month.

These are generally larger bills eg. rent and mortage, payroll,utilities and lease payments on equipments

VARIABLE EXPENSES

Includes those office expenses w/c vary from month to month or are received only on occasion

These may include dental supplies and lab fees, new equipment purchases, and new services

CONTROLLING PRACTICE OVERHEAD THROUGH BUDGET

GOALS

Budget goals help contain costs incurred by the practiceOffice manager should keep practice overhead revenues w/in an establish percentage of production

Categories of Practice Expenses

The following categories may be used as a guide in determining anticipated office expenses at annual budget review time

It is based upon gross collections of a solo practitioner office

Personal expenses

It is the highest overhead associated w/ personnel payroll,

including salaries and taxes

Occupancy expenses

Cost of physical occupancy of the practice

Includes: lease note plus interest, depreciation, insurance, janitorial and maintenance services.

Administrative expenses

Cost of administering the practice.

Includes: accounting and legal services, collection costs, bank charges, etc.

Equipment and furnishing

Cost of equipment and furnishings

Interest on equipment and or cash purchases of equipment

Clinic and dental supplies

Cost of dental supplies associated with patient care

The incurment of additional infection control and barrier protection cost associated w/ compliance w/ government regulations

Lab feesThe cost varies greatly, depending upon

the type of practice and volume of prosthetic cases.

Marketing cost

Cost for marketing expenses varies from practice to practice

Eg.donations, telephone, space advertisement, etc.

MANAGING SUPPLY INVENTORY

Maintaining a sufficient amount of dental supply items and purchasing them at the lowest price

Most of dental practices spend upward of 10% of their total overhead on dental supplies

TYPES OF SUPPLIES

4 categories:Consumable

Disposable

Expendable

equipment

CONSUMABLE SUPPLIES

Those that are completely used up or consumed with use

These include anticariogenic agents, cements, impression mtrls., and gypsum products.

DISPOSABLE SUPPLIES

Single-use items that are discarded immediately after the procedure for w/c they are used.

Eg. cups, gloves, dental dam, cotton rolls, anesthetic needles, and carpules

EXPENDABLE SUPPLIES

Items that are relatively low in cost and are replaced frequently.

Eg. Paper clips, burs, matrix band, plastic impression tray

EQUIPMENT

Major purchases that are used for five or more years and may be depreciated by the office over a number of years

Eg. Computers, chair, dental units, sterilizers, lasers,handpieces, etc.

MANAGING SUPPLY

Shelf life

Rotating stock

Storage consideration

Rate of use

Storage of controlled subs.

Shelf life

Amount of time a product is guranteed fresh

Product should be use before it reaches the expiration date

Rotating stock

Must ensure that when new supply items are received in the office the oldest items are used first

New items are placed farthest back in the storage.

Storage concideration

Consideration must be given to special storage requirements on product labels such as light and heat sensitive

Rate of use

Determine a rate of use on commonly used items to establish a routine reorder point

When the item reaches the minimum quantity additional units should be ordered to avoid running out.

Storage of controlled subs

To prevent abuse of controled subtances, unauthorized, the office that dispenses this prescription should use a double lock storage system.