Written by Bryan Martin, CPA, Managing Partner and Founder of Taxstra. Last updated September 1, 2026.
Start with a denominator everyone agrees on
Production, adjusted production and collections answer different questions. Label the denominator on every ratio and reconcile collections to deposits and the general ledger before drawing conclusions.
- Gross versus adjusted production
- Collections by period and provider
- Refunds, write-offs and timing differences
- Cash versus accrual reporting choices
Separate fixed, variable and provider-driven costs
Rent behaves differently from lab expense; front-office staffing behaves differently from owner clinical compensation. A useful chart of accounts preserves those distinctions and stays consistent month to month.
- Clinical labor and administrative labor
- Lab and clinical supplies
- Occupancy, technology and insurance
- Owner pay, associate pay and benefits
Use trends and drivers, not a universal target
A ratio can rise because cost increased, collections fell, mix changed or a growth investment arrived before revenue. Review dollars, ratios and operational drivers together before cutting.
- Trailing 12-month trend
- Budget and prior-period variance
- Provider days and chair capacity
- Location and service-line contribution
Turn the close into a short action list
The monthly review should end with named decisions: fix a reconciliation, investigate supply usage, change a schedule, revisit pricing or update a forecast. If no one owns the next action, the dashboard is decoration.
- One source of truth
- Materiality threshold for investigation
- Owner and due date for each action
- Forecast updated for confirmed changes
Questions owners ask
What is included in dental practice overhead?
Definitions vary. A useful report clearly states whether owner compensation, debt service, taxes and non-operating items are included and separates major operating categories.
What is a good dental practice overhead percentage?
There is no single percentage that explains every practice. Specialty, provider model, location, growth stage and reporting definitions can all change the result.
How often should overhead be reviewed?
A monthly close supports timely review, while longer trend windows help separate noise from sustained changes.