Preparing for the financial ups and downs to come

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Posted by: Dental Design 2nd November 2023

Heidi Marshall is a Chartered Accountant and Partner at Dodd & Co, who specialises in healthcare. She has a wealth of experience in helping clinicians navigate complex financial waters, offering bespoke advice and invaluable support to enable individuals to strengthen their positions. Heidi is also the Chair of the National Association of Specialist Dental Accountants & Lawyers (NASDAL) and will be speaking on each day of the BDIA Dental Showcase 2024, sharing her expertise on the latest updates regarding pensions, tax and other important financial topics.

Despite the financial challenges that many people continue to face, there are some positives to be utilised in the dental profession. Heidi considers some of the opportunities available to dentists right now:

“Although the national media often focuses on the negatives, the fact that demand for dentistry is so high provides opportunity for practices and clinicians. It is comforting to know that there are many people wanting quality dental services, which provides potential for professional and business growth.

“Another positive relates to the pension changes that came into effect earlier this year for those working in the NHS. The adjustments allow more people to continue building up their pension pot without many of the problems that they previously faced.

“In addition, given that several corporates have been offloading practices at relatively cheap prices, several associates have been able to purchase businesses at reasonable prices. With the right financial support with regards to borrowing, this provides exciting opportunities for more individuals to own their own practices.”

Of course, these are still challenging times for many dental professionals, and there are some areas in particular that Heidi is regularly speaking to clients about:

“Recruitment issues are top of the list for most principals today, for both dentists and dental nurses. Loan interest rates are also very high and anyone who has just bought a new practice and has a variable loan will likely be facing some hefty interest payments above what they had previously anticipated. Add to this the increasing overheads of running a practice with rising utility bills and other expenditures, financial situations are being stretched for many.

“With regards to staff, there are a few solutions that clients are turning to. If you can’t attract new staff with higher salaries, then it’s important to look beyond financial incentives. It may prove useful to reconsider skill mix in the practice by sharing work among dentists and dental hygienists or therapists.

“Unfortunately, there’s not much anyone can do about the interest rates on loans, but shopping around is key to getting the best deal available. Some banks are being reasonable with capital repayment holidays, for example, which could offer a much-needed reprieve for some practices.

“Finally, it’s necessary to review your pricing if you haven’t already. Having a good understanding of your income and outgoings means you can logically assess which increased expenses you can absorb and which need to be passed onto patients. It’s about finding balance between the two.

“To do this effectively, it’s important to stay on top of your accounts. Few practices still do it, but leaving everything to the end of the year and sending it all to your accountant in one go is not ideal. By updating your accounts monthly, you’ll be able to more closely monitor progress and make adjustments throughout the year to significantly improve your financial position.”

Reflecting on the growing trend of practice handing back their NHS contracts and associates preferring to work in private practices, Heidi adds:

“I think it’s important to do your homework before moving away from the NHS. It’s necessary to think carefully about the benefits you may lose out on as a result – including pension benefits, death in service, maternity pay etc. Be sure to explore all these so you can confidently decide whether private dentistry is a better option for you.”

We all wish we had a crystal ball – especially at times like these – but all anyone can do is prepare for the possible eventualities. Many people may take comfort in the fact that this is not the first time economic troubles have hit the UK or the dental profession. Indeed, we may be able to learn from previous trends to guide current decisions.

“I don’t think anyone would predict positive changes to interest rates in the immediate future,” Heidi continues, “but dentists have historically been ok during recessions and there’s no reason why they won’t be again. To survive or even thrive during this part of the economic cycle, you simply have to be more prepared and more careful in your business decisions.”

To hear Heidi discuss some of these and several other related topics at the BDIA Dental Showcase 2024, make sure you get the dates in your diary. In today’s economic climate, everyone can benefit from a little financial support! Registration opens in November – keep up-to-date with the monthly newsletter and register your interest today at https://dentalshowcase.com/register-interest-pr.