A new more cautious approach to finance is detectable among many dentists. This assessment is based on observation of our client base, which is a nationally representative sample of the dental profession. We have noticed that clients are generally more prudent and focused on their financial affairs. For instance, no sooner had the 22/23 tax year ended, than two of our clients had submitted all the information we needed to compile their tax return. It was a wonderful experience for clients to be so prompt!
COVID has without a doubt had an impact on the financial outlook of the self-employed sector of the dental profession. Prior to 2019, practice-owning and associate dentists were accustomed to having a reliable flow of money into their bank accounts. The advent of COVID and the mandatory closure of dental practices made the future looked much less certain.
Employers with a sizeable workforce were desperate, until furlough was introduced. Once they were sure they could retain employees, concern turned to the future viability of the practice, particularly among those with a significant number of fee per item patients. Not only did they have to close their doors, when they reopened, appointments would be longer and spending on dental supplies increased by the cost of essential and appropriate PPE.
One client with a 100% fee per item business model had no income for the entire time that their practice was closed. It was the first time that they had ever felt really vulnerable. Fortunately, they are dentists who already maintain a contingency fund which cushioned the blow and enabled their survival.
However, the current economic climate with higher interest rates and inflation means dentists are continuing to be careful and mindful of their own and their patients’ finance. The current uncertainty as well as the legacy of COVID, means clients are taking a closer interest in their finances, checking on the direct debits going out while looking ahead to how their business will perform in the future. The annual business meeting we offer our clients has never felt so important.
Being worried about money is not positive but being prudent is. The new cautious mood certainly helps us do our job. If clients get the previous year’s accounts into us in a timely way, it helps us provide the service we believe you need. The sooner we have your paperwork (increasingly in electronic format so less paper involved!), the sooner we can book an annual review and help you plan your business strategy for the year ahead.
We are lucky to have Jenna on board now and she is majoring on submitting tax returns. Fortunately for us, she is a tax specialist.