Business planning guide
Dental Practice Plan: Can Collections Meet the Payment Dates?
Assess dental practice payment capacity from dated collections rather than billed production.
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A practice can produce more than its monthly payments and still lack cash on payroll day. Start with realized fees and collection dates, then place wages, suppliers and debt payments on the same calendar. Scheduled appointments are neither completed treatment nor available money.
Use the same clinical workload in both cash cases
Original assumptions, $ for one month. Eighty clinically appropriate appointments fit an assumed qualified 80-slot schedule. Adjusted billed production averages $250 per appointment, or $20,000. Opening cash is $5,000; there are no receipts from earlier periods. Payroll is $9,000, suppliers $3,000 and the scheduled debt cash payment $2,000.
| Measure | 75% collected | 60% collected |
|---|---|---|
| Current-month receipts | 15,000 | 12,000 |
| Selected cash payments | 14,000 | 14,000 |
| Net cash change | 1,000 | -2,000 |
| Month-end cash | 6,000 | 3,000 |
The $3,000 difference comes entirely from collection timing or realization, not additional appointments. The debt amount is a selected cash obligation; its principal portion is not another operating expense. This table is a cash bridge, not a profit statement or a formal debt-service coverage calculation.
Month-end cash can hide a missed payment
Assume payroll is due on day 5, suppliers and debt on day 15, and all selected collections arrive on day 20. Opening $5,000 falls to negative $4,000 after payroll and negative $9,000 after day 15. Both cases therefore require $9,000 beyond opening cash before the receipts, even though both finish with positive cash.
Use aggregate collection reports to distinguish patient and payer receipts, opening receivables, adjustments and refunds. Reconcile realized amounts to the service period; do not accelerate old balances merely to meet a forecast target. Have practice staff confirm capacity and clinically appropriate service assumptions independently of financial goals.
Before adding a chair or repayment commitment, test the lowest dated cash balance alongside the full cost and staffing plan. The selected Dental Practice Financial Model is the seller's Dental Clinic model and links practitioner capacity, utilization, pricing and costs to a broader forecast.
Scope & limitations
Assumed business cash illustration only; clinically appropriate workload is fixed. No payer, treatment, clinical, tax or debt-service coverage standard is asserted.
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