Being a dentist practice owner means you’re constantly juggling a lot financially. Between your business’ finances and your personal bank accounts, how do you know you’re making the right decisions? 

Mistakes are part of life, even financial mistakes. The best way to avoid making them in the future is by becoming aware of them.

One way to make your dental practice's finances simpler is transforming your dental payments through Dental Intelligence Payments. This system makes payments easier for you and your patients.

If you’re dissatisfied with your financial position, it might be time to look at how you’re managing your finances. Below are the seven most common financial mistakes among dentists.

1) Not Evaluating Your Finances Regularly 

It’s easy to put off managing your finances when your day-to-day tasks are so time-consuming. However, this is a common financial mistake. Keep an eye on your books at all times — forgetting or failing to assess your dental practice’s finances leads to confusion, disorganization, and even theft. 

Even if you put an employee in charge of your practice’s finances, you should check in frequently to ensure that everything is going smoothly. 

By evaluating your finances regularly, you will catch any issues early on. 

2) Misunderstanding Your Loans

Many dentists have debt, such as student loans or business loans. While the practical thing to do might seem like refinancing them to avoid paying interest rates, this isn't always the best tactic.

Income-driven repayment plans are often the better option. You will have a lower payment every month, and you’re likely to have more of your loans forgiven. This option is sometimes better for your credit score, too.

Everyone’s financial situation is unique. To determine if you are better off refinancing your loans or using a repayment plan, consult a financial advisor. 

3) Pushing Off Estate Planning

Estate planning can feel morbid at first. No one wants to think about dying, but you will someday. What will happen to your assets, including your dental practice, when you're gone?

You have the power to leave your loved ones financially secure if you take the right estate planning measures. If you avoid estate planning, your family and loved ones may never know your wishes. Take control of your legacy by creating an estate plan.

4) Keeping All Assets Liquid

Not all of your assets should be liquid. Having some funds put away for emergency savings is smart. However, if all your money sits in a savings account, you miss out on opportunities. 

To build your wealth, take a portion of your assets and invest in the stock market, real estate, or another illiquid investment vehicle. Your money will grow faster that way.

Investing in the stock market means you’re investing in yourself, too. You can use the money you make back to renovate or improve your practice.

5) Failing to Take Out Insurance Policies and Fraud Prevention Measures

Practicing dentistry isn’t without risks. Insuring yourself and your practice can save you a lot of money and time in the future. Remember to be thorough when you’re going over your insurance policies or making a claim. Insurance fraud is common, whether intentional or accidental, especially for dentists who own their own practice or have business partners.

For example, a lot of dentists wait to purchase disability insurance. You never know when you could fall sick or injured. Having disability insurance, regardless of the stage of your career, is an important preventative measure.

6) Not Taking Advantage of Tax Credits

When you file your tax return, your goal may be to get it over with as soon as possible. No one enjoys filing taxes, but that doesn’t mean you can’t benefit from it. Don’t forget about the following tax credits:

• The Federal Research and Development Credit (R&D) for advancing products or practicing innovation
• Depreciation claims on new equipment your dental practice purchased
• Deductions for charitable expenses, including volunteer work like lodging and sponsoring

7) Not Planning for the Future

The day-to-day operations of your dental practice may prevent you from looking forward. However, it’s vital for you and your employees that you consider your future. Having retirement accounts for you and your staff should be a priority. 

Avoid Financial Mistakes with Dental Intelligence

If you’re dissatisfied with your dental practice’s financial state, you have options. Offering flexible payment options, avoiding common financial mistakes, and using tools from Dental Intelligence can alleviate that headache you get when you look at your books.

Dental Intelligence offers software to improve efficiency and quality in dental practices. To learn more, schedule a demo today.