Hi {{firstname|there}},
While running the finances for The Neem Tree practices, one of the things that kept me sharp even when the books looked healthy was knowing exactly what was coming up in the next few weeks. Payroll. Lab bills. Equipment service contracts. The kind of things that don't show up in your P&L until they've already hit your account.
Running a dental practice is genuinely hard. You're managing patients, staff, associates, compliance and somewhere in the middle of all that, you're supposed to have a handle on your finances too. Most dentists I've worked with over 25 years aren't ignoring their money. They're just watching the wrong number. They check the bank balance. That tells you where you've been. It tells you almost nothing about where you're going.
That's what this issue is about. Fixing that.
82% of small businesses that fail cite poor cash flow management as a key factor
13 weeks - the gold standard forecasting horizon every practice should be working to, at minimum
The gaps we find without a forward forecast are usually avoidable and not small.
Profit and cash are not the same thing. I cannot stress this enough.
You can be profitable on paper and still run out of money. It happens more regularly than you think in dentistry, and it always feels like a surprise, even though it never really is. The signals were there. They just weren't being watched.
Profit is what your accountant reports after the year ends. Cash is what's in your account on a Thursday afternoon when payroll, lab invoices, an unexpected chair breakdown all land in the same fortnight. You need to manage both, but most practice owners are only watching one, if that.
The fix isn't complicated. You just need to start looking forward, not backwards.
Two forecasts. That's your starting point.
1. The 13-week rolling cash flow
This is your early warning system. Updated every single week, it maps every pound coming in and going out over the next quarter, NHS payments, private receipts, plan income, lab bills, wages, rent, loan repayments. When you can see a crunch coming six weeks out, you have time to act. When you find out on the day, you don't. It's that simple.
From experience: The three cash surprises that hit dental practices hardest are almost always the same: Corporation Tax or Self Assessment, Unpaid PAYE, and annual equipment service contracts. None of these are actually surprises, you know they're coming every year. They're only surprises because nobody put them in a forecast. Do that one thing and you've already solved half the problem.
2. A 3-year financial plan
I know - you're a dentist, not a finance director. But this doesn't need to be a 40-page document. It needs to answer one question: where do I want to be in three years, and what will it cost to get there? A new chair? An associate? A second site? Without even a rough plan, every financial decision becomes reactive. You're constantly firefighting. With one, you're making choices not just responding to situations.
The 5 forecasting mistakes I see constantly
Treating the invoice date as the payment date - NHS BSA payments can lag by weeks and that gap trips people up every time
Forgetting annual costs that don't appear monthly - indemnity renewals, CQC fees, software licences, equipment service contracts
Not planning for seasonal dips - August and December are consistently quiet on private revenue, every year without fail
Building a forecast once and leaving it - it has to be updated weekly. A stale forecast is worse than no forecast because it gives you false confidence.
Treating tax as a surprise - Corporation Tax, Self Assessment, PAYE - provision for these monthly, every month, like clockwork
When to bring someone else in
If your practice turns over more than £500k, you shouldn't be doing this yourself. Not because you can't but because you won't. You're treating patients, managing a team, running a business. Your time is the most expensive resource in the building. That's exactly why our CFO clients pay us to build and maintain these forecasts, flag anything unusual, and sit down with them once a month to go through what it all means. Twenty minutes of their time. That's it.
→ Want us to build your first cash flow forecast? We'll look at your last three months of accounts, build a 13-week forecast with you, and show you exactly where the gaps are. No obligation. Just clarity. samera.co.uk/service/dental-cfo-services
Speak soon,
Arun
Uros Turcic
Business Development Consultant
Need finance for your next practice?
Uros has helped hundreds of dentists secure funding at excellent rates. Book a free 30-minute call and find out what's possible.
QUICK READS THIS WEEK
Dental Practice Startup - Why Buy when you can Start up a Dental Practice for a much lower cost?
Dental CFO Services - Our Dental CFO Services can take much of the financial decision-making burden off your plate, giving you more time to see patients and enjoy your life.
Making Tax Digital for Dentists - Automate your dental accounts and tax when you go digital with our specialist dental accountants.