As costs continue to rise, it’s easy to find yourself working more and getting less in return, causing you to pinch pennies harder and harder. One of the biggest gaps where money leaves your practice is your overhead gap, but there’s one incredible change you can make that will start saving your practice money right away: managing your supply budget better. Getting your money to work for you is crucial, because otherwise it’s going to work against you. To get you started, we’ve created three actionable steps. They may seem like small changes, but those are often the ones that have the biggest impacts.
Inventory What You Have
The first step I recommend is to go through your lab, supply closet, general spaces, and each operatory and clean house! There’s always something hiding that’s been forgotten, and as a result, it’s been unnecessarily ordered. You want to organize each area and make sure you have only what is needed, and no back stock. With a thorough inventory, you’re paving the way for a better budget.
Set a Supply Budget
Setting the budget itself is crucial, and the best way to start is by looking at your previous month’s collections. Take that figure, and allot 5% of it as your supply budget. Setting the budget is only half the battle, because you also must stick to it. This means that you need to align with whomever is responsible for ordering and make the expectations clear. Make it clear that the budget is the limit—once you hit it, stop.
Track What You Spend
Once you’ve set the budget, your job isn’t done, because how do you know if you’re staying within it? Like Kirk says, “What gets measured gets improved, but what gets measured and reported on improves exponentially,” so you’ve got to monitor your invoices closely. Furthermore, you must document them so you can compare them to your budget and easily see if you’re on track.
Remember, this isn’t a one-and-done task—it’s a process. You’re going to have to evaluate and reevaluate your ordering system often to make sure you’re on track, and you must hold both yourself and your team accountable throughout the process. It’s one of the easiest things you can do that will make an impact without affecting other areas in the practice, so it’s a great go-to that will let you start saving money right away. While the overhead gap is a significant source of lost money, there are others, which is why ACT created a Financial Gaps Calculator to help you find and plug those leaks. For a copy of it, don’t hesitate to email Gina and ask! And as always, don’t be afraid to reach out and let our coaches help you build a Better Practice and a Better Life!
Tune in next time and learn how to create a better blueprint for masterful strategic planning!
Miranda Beeson is a Lead Practice Coach at ACT Dental