Most Web sites use the first button on their site as Home which typically creates a second Web site session. I use this button to explain my vision for the Dental Practice Financial Calculator.

My vision was to create a strategic financial model in Microsoft Excel that could be adopted as a standard financial model for any dental practice. (The unique structure of the Microsoft Excel model is explained at the end.)

U.S. businesses normally don't adopt broad standards and governmental commerce doesn't promote or support standards either.  However, it's different in Europe.  For example, in Germany, most non-public businesses use the same chart of accounts and account numbering - even very large, privately owned businesses with hundreds of millions of euros in annual revenue.  I think the German approach to accounting is so much savvier than the U.S. mindset (maybe it's because they have been doing it a lot longer).  

An accepted standard dental practice strategic financial model within Microsoft Excel could revolutionize financial practice management just as the introduction of the first spreadsheet software transformed corporate accounting. The two greatest benefits that the dental industry can achieve from adopting the Dental Practice Financial Calculator as an industry standard are:

    I.    A substantial decrease in the cost of practice ownership.
    II.   More time to focus on what dentists enjoy most; the clinical side of practice ownership.

The Dental Practice Financial Calculator was designed with the understanding that dentists are trained in medical science, not business management. My aspiration is to help dentists utilize this strategic financial model to reduce costs and allow you to spend more time on your patients.

Microsoft Excel has become the global standard for spreadsheet software. I would be very surprised if any software company had serious plans to develop new spreadsheet software to compete against Microsoft Excel because there is no reason to waste money doing that. Most dentists have at least some basic knowledge of Excel. In fact, my model is actually a great way to learn how to use Microsoft Excel.

Over time, even more dentists currently in dental schools will have better computer skills - including Excel expertise - than dentists currently in practice. And, as you are aware, many of today’s dentists are nearing retirement age.

Here is my point: There's no reason why the Dental Practice Financial Calculator could not become an industry standard for dental practices. There is no reason why dental practice accountants could not use this model to report monthly results to their clients in place of the normal four-page reports they issue. At year-end, they could issue their traditional reports. But the Dental Practice Financial Calculator would be exponentially more effective and helpful for their clients when reporting monthly results. As long as (revenue / collections) and pre-tax income in both sources agree, that's all that is needed under the cash method of accounting.

One of the five primary functionality features in the model is the ability to estimate the fair market value of a dental practice. The simple English terminology used in the three FMV segments is intended to be a teaching tool and reference guide to define financial formulas commonly used in most FMV calculations. This functionality and the current “graying factor in the industry profile are additional contributing factors that give me confidence that I can someday achieve my vision to create a financial model that could be adopted as a standard for dental practices.

The initial version of my software product evolved from the financial-management assistance I provided Dr. Joseph Pesicek one year after he purchased his dental practice. The software was developed from scratch over a two-year period through our careful collaboration and draws on his experiences as a new practice owner. Dr. Pesicek was less than 30 when he purchased his dental practice in 2004 and spent $20,000 with a consulting company to determine the fair market value.

He earned his degree in 2002 from UNC-Chapel Hill. He'd never previously held a job except for working a few summers' jobs in fast food restaurants. Two years after graduating from dental school, he found himself running a business with 11 employees - but he did not have any business experience at all. It was a business scenario unlike any other. Someone loaned $1 million to a young dentist just two years after he earned his degree who was less than 30 years old and who had absolutely no business experience.

My goal was to develop a dental practice strategic financial management tool that is easy to learn and use because dentists are trained in medical science, not business management. Most dental schools only offer limited courses in finance and management in their dentistry curricula. Another goal is to persuade dental schools to use my free practice model that can be downloaded from my Web site and used in their finance and management courses.

Some of my major design considerations about the targeted customer base were:

• Computer skills
• Business-management exposure
• Prior supervisory experience
• General understanding of accounting and finance

When I reviewed financial statements from Dr. Pesicek’s accountant and several of his colleagues who participated in the software development, I couldn’t understand the rationale behind their accountants’ choices for the chart of accounts. For instance, one accountant used more than 100 P&L accounts in his statement. The 26 expense accounts I use in our model are the 26 categories the IRS considers major expense categories. (I often change some of these categories as a custom service for some of my clients.)

As discussed above, one of the five primary functionality features in the model was to determine the fair market value of a dental practice. It’s not unusual for third-party appraisals – which come in big, impressive black books - to cost as much as $20,000. To pad their deliverable, consultants often feel it is necessary to write out the mathematical formulas for calculating present value and many other calculations used in the appraisal. In my opinion, most of the information is nothing but page-filling boilerplate and simply a reason to charge $20,000 for the appraisal.

There’s no reason why the Dental Practice Financial Calculator can’t be at least a starting point for every fair market value appraisal of a dental practice. Both the financial rates and financial criteria that I selected for the FMV calculation in my model can be replaced with different rates or criteria that the user (a dentist or his/her financial advisor) feels are more appropriate for their practice. Using the Dental Practice Financial Calculator as even a starting point would save time and money and force consultants to think twice before charging $20,000 appraisal fees.

Below is an explanation of the unique structure I used to create my strategic dental practice financial model within Microsoft Excel.

There are three copies of the Excel model that I maintain and continue to update:

1. The Excel file that that I sell for a one-time license fee of $399 and e-mail to new customers.
   
2. The Excel file that is named the Practice Model. It can be downloaded free from my Web site. This model contains 24 months of financial and productive data for demo purposes. It’s a great way to learn how to use the model and Microsoft Excel. It is a fully functional model of a fictitious dental practice that contains all the data you need to try out the model, including generating various strategic simulated plans, forecasts, and “what-if” scenarios.
   
3. The Excel file formatted for the “2-month” - free trial offer.

All three files are exactly the same except for a few minor cell formatting changes. The last two free Excel files are a great way to improve your Excel skills.

There is no difference in these Microsoft Excel files than any other Microsoft Excel file you have saved on your computer. These Microsoft Excel file are 7.5 MB. (To put this in perspective TurboTax 2008 is 443 MB).

The Excel model of the Dental Practice Financial Calculator for the “2-month” -free trial offer that will be e-mailed to you can also be used to calculate an estimate of the Fair-Market-Value of your dental practice. To use this free trial offer Excel file to calculate the FMV of your dental practice you only have to use “one” of the “two” monthly data input periods available for use to enter monthly data. (Only one period is required to fully run the model) Calculating an estimate for the FMV of you dental practice is achieved by entering your best “estimate” in the cells for both the Financial and Productivity data input software segments. (There are only 28 financial data fields and three productivity data fields for each dentist and hygienist that is entered.)

Your estimate should be based upon the practice's current or anticipated level of business and expenses. You also have to enter your Manpower practice data in the Excel template the same as you would when using this Excel Model for the “2-month” - free trial offer.

My Strategic Plan is to upgrade the Web-site once a quarter, and release one new fee annual model upgrade to license clients. Some of the quarterly upgrades include new software segments that provide additional functionality that I feel adds value. The model is designed to allow copying data from one Excel file to another easily. Free telephone support is offered to anyone. The goal is to continue to improve the model with every annual model release.

Only one other software vendor – Sikka Software - focuses on practice financial management. Sikka positions its solution as "business intelligence and optimization." But there many important differences between the Sikka software and the Dental Practice Financial Calculator.

To start; Sikka is very expensive - $200 to $500 per month, depending on functionality used. Sikka builds business management and business intelligence solutions for the dental and medical provider marketplace. It focuses on certain key areas of the practice and return on investment (ROI) in marketing, patients, fees, and insurance that enable practice owners to make informed business decisions and focus on essential areas that require attention. While larger in scope than our software, it requires a major commitment to learn, use, and integrate with other practice management and financial software. Keep in mind, the American Dental Association lists 40 vendors in its directory of practice management software solutions. If the practice financial statements are not generated by QuickBooks or similar software (perhaps prepared by an accountant), you cannot download them into Sikka.

Sikka offers a benchmarking tool they call the hotoptimizer. It is a benchmarking tool populated by zip code for the dental industry. The problem with the data is you do not know how many data contributing dental practices are in the zip code. If there is only one or two the information could be misleading. I have also analyzed some of the information it generates. Many of the statistical formulas that the hotoptimizer offers as benchmarking information make very little sense to me. In fact, it’s hard to find a zip code that offers any data. I think they only have a few hundred customers, compared against tens of thousands of zip codes. .

I accumulate anonymous data from service clients to allow me to give benchmarking information so my clients can see how their practice compares to other dental practices. All consulting services include a strict confidentiality agreement to carefully protect and preserve their privacy. In simple English, this agreement ensures that their information is not disclosed, shared, sold, or otherwise distributed to anyone whatsoever. I also guarantee that I will never ask to or use clients as a reference to sell my software and or services or reveal the name of any client.

By contrast, the Dental Practice Financial Calculator is easy to learn and use and was designed for computer, accounting, and financial novices. The Excel model sells for a one-time license fee of $399 which includes free telephone support. It only takes a few minutes each month to enter required data and the process is very intuitive and informative.

In addition to my free telephone support, I offer my consulting services for $100 per month. There is no contact or obligation. My maintenance service enables dentists to derive immediate benefit from the strategic practice financial model. I do it all, satisfaction guaranteed. The primary benefit for dentists to use my service is it enables them and their staff to focus more time on what they do best, dentistry. There is nothing to learn and no additional work for the dentist, the office staff, or their accountant.

When dentists subscribe to my service, they receive an updated copy of the Dental Practice Financial Calculator Microsoft Excel file e-mailed to them each month. I often add customized software segments that I feel the clients require to better understand the financial drivers of their practice. After I populate their practice financial model with the data, I’ll schedule a webcast meeting with them to review it. Some clients have several staff members join the webcast. One client even has staff members participating from several different locations. During this webcast meeting, I review the monthly financial results, express my opinions, and highlight financial issues that may require attention or further investigation.

The Dental Practice Financial Calculator addresses the strategic challenges that practice owners face and focuses on the financial aspects of practice management not tactical processes and workflows. Practice management software solutions normally do not address strategic challenges that practice owners face. Most PMS solutions merely automate or interface with bookkeeping software, set appointments, store images, and streamline other dentistry-related services.

My software and consulting service is different than what most CPAs or dental practice consultants provide. My consulting service aligns with and complements the software model, the Dental Practice Financial Calculator.

Most CPA’s that have dental clients perform the following functions:

• Payroll and all related transactions and filings - Transferring direct-deposit payroll twice a month into the correct bank accounts is the easy part.
• Cash Management -The scope of this tactical work is normally confined to reconciling S-Corp.-required bank accounts and accounts payable and all related transactions.
• All required tax requirements and filings – This is for both S-Corp. and personal federal/state tax reporting for practice owners.

Most dentists use one of many practice management software solutions and rely on administrative employees to handle other tactical work not handled by the CPA. The CPA normally is not actively involved in the everyday production reconciliation or the accounts receivables tactical workload.

Many dentists choose or inherit a local CPA. (Male dentists often choose a school or golf buddy.) The CPA practice might not have many dental clients -- if any. And the professional services fees that competitive CPAs charge are often highly price-sensitive which results in a fair value for most dentists. However, those professional services fees allow little time for the CPA to get actively involved in the strategic challenges facing dental practice owners. And, of course, the CPA may not have much – or any - experience with the business side of a dental practice.

The Dental Practice Financial Calculator and my consulting services focus on the strategic financial aspects of a dental practice not tactical processes and workflows. All consulting services include a strict confidentiality agreement to carefully protect and preserve your privacy. In simple English, this agreement ensures that your information is not disclosed, shared, sold, or otherwise distributed in anyway whatsoever. We also guarantee that we will never ask to or use you as a reference to sell our software and or services or reveal the name of any client.

The one-time license fee for the Dental Practice Financial Calculator is only $399 My consulting fees are $100 per month with a three-month initial minimum. After this period, we will contact you to see if you want to continue the service for the next three months. There is no contract or obligation. To cancel, just call and we will immediately delete your credit card information from our records.

To obtain more information call me at 919-975-5368.