What Dental Practice Owners Need to Know About New Federal Payment Changes

Big changes are coming to how the federal government issues payments, and dental practice owners need to be prepared. The White House has announced it will eliminate paper checks for nearly all government payments by September 30, 2025, so the U.S. Treasury has approximately six months to make the necessary adjustments. If you or your practice currently receive any federal payments by check, including tax refunds, Medicare reimbursements, or other government-related funds, it’s time to get ready for a full transition to electronic payments.

Why the Change?

The move to eliminate paper checks is part of a broader effort to improve efficiency, reduce fraud, and save taxpayer dollars. Electronic payments are faster, more secure, and more cost-effective than mailing paper checks. The Treasury estimates that moving to digital payments could save hundreds of millions of dollars annually.

How It Could Affect Dental Practice Owners

If your practice is owed a federal refund or receives any kind of government reimbursement, the payment will now be issued via direct deposit or a similar electronic method. That means:

  • No more waiting on the mail. Payments will arrive more quickly.
  • Reduced risk of lost or stolen checks. Electronic transfers are generally safer.
  • Streamlined bookkeeping. Digital payments are easier to track and reconcile.

For dental practices that rely on timely cash flow to cover payroll, supplies, or operating costs, faster access to funds can make a significant difference.

What You Should Do Now

If you haven’t already made the switch, now’s the time to update your payment preferences:

  • Set up direct deposit for IRS payments. Make sure your practice provides its correct banking information each time you file a return so you can receive any IRS refunds electronically. 
  • Check Medicare provider information. If you participate in Medicare, confirm your electronic payment enrollment is up to date.
  • Talk to your vendors. Many private insurers and suppliers are also pushing for digital payments. Updating your systems now will set you up for a smoother future.
  • Review your accounting systems. Ensure your bookkeeping processes are ready to handle incoming electronic payments efficiently.

What Happens If You Do Nothing?

If you don’t update your information, you could experience delays in receiving payments. In some cases, the government may issue payments via a prepaid debit card if no direct deposit information is available, which could add cost and complications to your accounting and cash management processes. Additionally, prepaid debit cards pose increased risk due to loss, misuse, or internal theft.

How We Can Help

At Edwards & Associates, we specialize in helping dental practice owners navigate financial changes like this one. If you need assistance updating your information with the IRS or Medicare, reconciling digital payments, or ensuring your cash flow remains strong during the transition, we’re here to help.

Don’t Fall for It: How Dental Practice Owners Can Protect Themselves from Common IRS Scams

Dental practices are constantly juggling patients, employees, insurance claims, and the day-to-day operations. The last thing you need is to get caught in a scam, especially one that claims to come from the IRS.

Unfortunately, IRS scams are more common (and more convincing) than ever. Scammers know that small business owners are prime targets, and dental practice owners and managers are no exception. Here’s what you need to know to protect yourself, your team, and your practice.

Common IRS Scam Tactics

Scammers often impersonate the IRS through:

  • Emails (“phishing”) that look official but contain malicious links or attachments.
  • Phone calls claiming you owe taxes and demanding immediate payment.
  • Text messages directing you to fake IRS websites.
  • Mail that looks real but asks for unusual information or directs you to a fake phone number.

Important: The IRS will never initiate contact with you via email, text message, or social media to ask for personal or financial information. They primarily communicate through official mail.

How to Recognize an IRS Scam

Be on the lookout for these red flags:

  • Urgency or threats. Scammers often pressure you to act immediately by threatening arrest, license suspension, or lawsuit.
  • Requests for unusual payment methods. The IRS does not accept gift cards, cryptocurrency, or wire transfers for tax payments.
  • Unfamiliar sender or strange-looking links. Hover over links before clicking, if the web address looks suspicious or doesn’t end in “.gov,” don’t click.
  • Spelling or grammatical mistakes. Official IRS communications are professional and carefully worded.

Here is an image of a specific scam email. On the surface, it looks legitimate. But you’ll notice a few things that are off on closer examination. First, it is an email, which is not how the IRS typically communicates. Secondly, the IRS is not likely to refer to you as a ‘valued customer.’ Third, there is some urgency to the message, and it is asking you to click on an unidentified link.

What to Do if You Receive a Suspicious Email or Call

  • Don’t click on any links or open attachments.
  • Don’t provide any personal information, not your Social Security number, bank details, or even your name.
  • Hang up immediately if it’s a call.
  • Report the scam. Forward phishing emails to phishing@irs.gov. You can also report scam calls to the Treasury Inspector General for Tax Administration  (TIGTA) at tigta.gov.

What If You Accidentally Clicked or Responded?

If you clicked a suspicious link or provided information:

  • Immediately run a virus scan on your computer.
  • Contact your IT provider to check for any breaches.
  • Monitor your bank accounts and credit reports for unusual activity.
  • Report identity theft to the IRS at identitytheft.gov and file a report with the Federal Trade Commission (FTC).

It’s also a good idea to reach out to us if you shared any tax-related information. We can guide you on the next steps to help limit potential damage.

Protecting Your Practice Starts with Awareness

When in doubt, always double-check. Contact the IRS directly using the information on irs.gov, not a phone number or link provided in a suspicious message. And if you have questions about anything that feels ‘off,’ we’re here to help.

Your financial health is just as important as your patients’ dental health. Stay vigilant, stay informed, and don’t let scammers take a bite out of your business!

Preparing Your Dental Practice for Potential Tariff Uncertainty

As the political landscape shifts, many dental practice owners are wondering how potential tariff changes under a new administration might affect their businesses. While it’s impossible to predict exactly what future trade policies will look like, there are smart steps you can take now to prepare without getting caught up in unnecessary worry.

What Could Be Impacted?

Dental practices rely on a range of supplies and equipment that are often manufactured overseas, including:

  • Dental chairs, imaging equipment, and sterilization machines
  • Handpieces and other specialty tools
  • Personal protective equipment (PPE) like gloves and masks
  • Lab materials, including crowns and implants

If tariffs are placed on goods from certain countries, costs for these items could rise. However, much remains uncertain, and even if tariffs are introduced, they could take time to phase in, giving practices an opportunity to adjust.

Don’t Forget Company Vehicles

Another area that could be impacted by tariffs is company vehicles. If your practice owns or leases vehicles for business purposes, potential tariffs on imported automobiles and parts could drive up costs.

Even vehicles manufactured in the U.S. often rely on parts sourced globally. This means:

  • The cost of new vehicle purchases or leases could increase.
  • Repairs and maintenance expenses could rise if imported parts become more expensive.
  • Lead times for service or new vehicle availability could be affected if supply chains are disrupted.

If you anticipate needing to replace or add a business vehicle in the next year or two, it may be worth evaluating your options sooner rather than later. 

What Can Dental Practices Do Now?

  • Review Vendor Relationships: Now is a good time to review where your equipment and supplies are sourced. Talk to your suppliers about contingency plans or alternative options should tariffs impact certain products.
  • Maintain Healthy Inventory Levels: If you rely heavily on imported supplies, consider modestly increasing your inventory on key items to hedge against short-term price increases.
  • Budget with Flexibility: Build some extra flexibility into your supply and equipment budgets for 2025 and 2026. Having a little financial cushion can help absorb any potential price fluctuations.
  • Stay Informed, Not Alarmed: Rely on reputable, non-partisan sources to track policy changes. Professional organizations like the ADA and your trusted advisors (including us!) will help break down what changes could mean specifically for dental practices.
  • Focus on What You Can Control: Operational efficiency, strong vendor partnerships, and proactive financial planning will serve you well regardless of the broader economic environment.

While the headlines may feel overwhelming at times, dental practices are resilient. With some thoughtful planning, you can navigate potential changes smoothly and continue delivering outstanding care to your patients.

If you’d like to discuss ways to strengthen your practice’s financial resilience, our team is here to help.

Podcast Recap: Marketing Mastery for Dentists – Building an Authentic Brand and Growing Your Practice

Attracting and retaining the right patients is one of the biggest challenges dental practice owners face after opening their doors. With new offices popping up on every corner and the rapid evolution of social media and digital marketing, standing out has never been harder – or more important.

In a recent episode of Beyond Bitewings, Edwards & Associates compiled expert advice from Darren Tessitore (CEO of Thrive Reviews), Erin Gregor (founder of Pod Growth), and Brandon Hubbard (founder of Pain-Free Dental Marketing) to share practical strategies for growing your dental practice through smarter marketing. 

Content First, Social Media Second

One major takeaway: start with your content, the educational material you create for patients, before worrying about where to post it. Think about the most common questions you get from patients, such as “Why do I need a cleaning every six months?” or “Should I be worried about fluoride?” and create content around those topics. Your social media platforms, in turn, serve as the ‘wheels’ to get that content in front of new audiences. Make sure your posts reflect what makes your practice unique.

Focus Your Efforts on the Right Platforms

Instead of trying to be everywhere at once, focus on one or two social media platforms where your ideal patients are likely to be. Secure your business name on all platforms, but put your energy into consistent, authentic posting where it matters most. Whether it’s short videos on Instagram or patient testimonials on Facebook, quality beats quantity.

How Much Time Should You Spend?

Expect to spend about an hour a day managing your online presence, and use it for planning content, creating posts, interacting with followers, and encouraging reviews. If that feels overwhelming, consider assigning a team member to help or hiring outside support.

Marketing Budget Guidelines

Wondering how much you should be spending? Experts recommend dedicating 3%-5% of your collections to marketing, including website management, review platforms, SEO efforts, advertising, and content creation. More important than the exact figure, though, is making sure you’re getting real results: attracting new patients and building a strong, visible brand.

Content is (Still) King

Paid ads still have their place, but today’s marketing success is driven by content: patient testimonials, before-and-after photos, and posts that demonstrate your team’s expertise and care. Patients want to truly connect with you, not just see a $39 cleaning special.

Don’t Ignore Your Google Business Profile

Many practices focus solely on their websites, but the first thing prospective patients usually see is your Google Business Profile. Optimizing it with updated information, fresh photos, current reviews, and proper keywords is critical to showing up in the coveted Google ‘Three Pack’ (those top three listings in local search results).

Pro Tip: Reviews Matter – A Lot

Encouraging consistent reviews – ideally more than your nearest competitors – boosts your online reputation and helps you rank higher in local searches. Make asking for reviews part of your checkout process and consider incentivizing staff to help.

Boost Your Dental Practice’s Growth

Marketing today is about meaningful connections, not just catchy ads. By focusing on authentic content, smart spending, and optimizing your online presence, you can stand out in even the most crowded markets.

For more insights like these, be sure to subscribe to Beyond Bitewings and follow Edwards & Associates for strategies to help your practice thrive!

BOI Filing for Dental Practice Owners: Our Attempt to Make Messy Timeline More Clear

If you’ve been trying to keep up with the Beneficial Ownership Information (BOI) reporting requirement, you’re not alone in feeling like it’s turned into a legal ping-pong match. Created to crack down on financial crimes, this new rule has become confusing, controversial, and as of now, unenforceable.

Here’s what dental practice owners need to know and what to do (or not do) next.

BOI Requirements: The Timeline That Just Won’t Quit

The Corporate Transparency Act (CTA) was passed in 2021, and it included new reporting requirements for small businesses, including most dental practices. But since then? It’s been chaos. Here’s a blow-by-blow:

  • January 1, 2024 – BOI reporting officially takes effect. New companies must file within 90 days of formation, and existing companies had to file by January 1, 2025.
  • December 3, 2024 – A Texas court issues a preliminary injunction, halting BOI enforcement nationwide and raising constitutional concerns.
  • December 5, 2024 – The federal government appeals the injunction, attempting to reinstate the rule.
  • December 23, 2024 – The Fifth Circuit Court briefly lifts the injunction, reinstating the January 1 deadline. FinCEN (the Treasury’s enforcement arm) responds by extending the filing deadline to January 13, 2025.
  • December 26, 2024 – The appeals court changes its mind again and reimposes the injunction, stopping enforcement once more. Oral arguments are scheduled for March 25, 2025.
  • January 4, 2025 – The Department of Justice files an emergency motion with the U.S. Supreme Court, asking it to lift the injunction and allow enforcement to resume. We now await the Court’s decision.
  • March 1, 2025 – A separate federal court rules the Corporate Transparency Act unconstitutional in National Small Business United v. Yellen. FinCEN announces it will not enforce BOI reporting against the plaintiffs in that case but keeps requirements in place for everyone else.
  • March 25, 2025 – IRS issues a memorandum clarifying that, due to legal uncertainty, BOI enforcement is paused pending further resolution. 

So, What Does This Mean for Dental Practice Owners?

The short version: You don’t have to file right now.

If you’ve already filed? No harm done, just sit tight.

If you haven’t? That’s fine too. The rule still exists on paper, but it’s tangled in legal challenges and is not being enforced at the moment.

But Will I Have to File Later?

Possibly. The Supreme Court could lift the injunction, or Congress could revise the law. But for now:

  • There are no penalties for not filing.
  • FinCEN cannot enforce the rule due to the ongoing legal battles.
  • Filing is on pause, not eliminated.

What Should You Do Right Now?

  • Don’t panic. No action is required at the moment.
  • Stay informed. This could change with little notice, and we will do our best to keep you informed.
  • Keep records ready. If enforcement resumes, filings may need to happen quickly.

Final Thought

We wish this were clearer, but welcome to regulatory whiplash. BOI reporting is either something you don’t have to do – or something you’ll need to do soon, once the courts make up their minds.

We’re watching this closely, and as soon as there’s a final answer, you’ll be the first to know.

Have questions about your practice structure or potential filing obligations? Reach out. We’re here to help you stay out of trouble and focused on your patients, not paperwork.

Why AI Shouldn’t Replace Your Dental CPA (Even If It Sounds Smart)

Artificial Intelligence (AI) is everywhere these days, from writing your social media captions to helping you find your next binge-worthy Netflix show. It’s even creeping into areas like tax preparation and financial planning. And while it might seem tempting to let a clever chatbot or algorithm handle your dental practice’s finances, the truth is: AI doesn’t know you. And when it comes to the long-term health of your dental practice, that matters.

The Promise (and Pitfalls) of AI

We get it, AI is fast, accessible, and sometimes pretty impressive. You can type in a tax question or search for financial strategies and instantly get an answer. Sounds like a time-saver, right?

Well, yes… and no.

While AI tools can help with general education or offer a good starting point for basic research, it doesn’t have access to your full financial picture. It doesn’t understand your business goals, your risk tolerance, or how you’ve structured your practice. And it certainly doesn’t have the foresight to help you understand how today’s decision will impact your practice five or ten years from now.

That’s where things get risky.

What AI Can Help With

There’s a time and place for AI, and when used wisely, it can actually make life easier. Some good examples include:

  • Summarizing articles or industry trends
  • Learning general definitions (what is bonus depreciation, anyway?)
  • Exploring pros and cons of high-level tax strategies
  • Drafting questions to bring to your CPA
  • Automating repetitive admin tasks or creating templates

Think of AI as a research assistant, not a trusted advisor.

What AI Shouldn’t Be Doing

When it comes to financial decision-making, AI can miss the mark badly. Here are just a few areas where relying on AI can steer dental professionals in the wrong direction:

  • Entity selection: Choosing the wrong structure could create long-term tax headaches.
  • Tax planning: AI may suggest a deduction that applies in theory but doesn’t hold up under audit or isn’t worth it based on your revenue.
  • Cash flow management: AI can’t factor in upcoming expansions, changes to insurance contracts, or staffing changes.
  • Practice transitions: Buying or selling a practice is nuanced. AI can’t assess deal terms, negotiate, or ensure you’re building the right legacy.
  • Personal vs. business deductions: AI doesn’t know if that trip to a dental conference is deductible, or if it’s going to raise a red flag.

In short: AI might save you money today, but it could cost you much more in the long run.

Real Expertise > Artificial Intelligence

Tax codes change. Markets shift. And your dental practice will grow, evolve, and face its own unique challenges. AI doesn’t understand the context of your business, and it certainly doesn’t care if you make a mistake. But we do.

We get to know how your business operates, what financial red flags to watch for, and how to help you plan for long-term success, not just short-term savings. Our team keeps up with the regulations, gets to know you personally, and helps you make smart decisions based on your actual circumstances, not just what the internet says.

The Bottom Line

AI is a powerful tool, but it’s not a financial advisor, tax strategist, or business coach. It’s not going to lose sleep if you underpay taxes or overextend your practice. That’s why the smartest move is to use AI as a supplement – not a substitute – for real guidance.

Podcast Recap: Tax Season Survival Guide – Expert Tips from a Tax Manager

Tax season can be overwhelming for dental professionals juggling practice management, patient care, and financial planning. But with the right strategies in place, you can avoid common pitfalls, reduce stress, and keep more of what you earn. In this episode of Beyond Bitewings, Edwards & Associates’ Tax Manager, Lorraine Kent, shares her best tax season survival tips, covering everything from deductions to tax planning strategies.

What’s Deductible (and What’s Not)?

One of the most frequently asked questions during tax season is, “What can I deduct?” While deductions can reduce taxable income, not everything qualifies.

For example, if you own rental property, expenses become deductible once the property is listed for rent – not before. Mortgage interest, property taxes, insurance, and routine maintenance are deductible, but major improvements must be capitalized and depreciated over time.

For dentists, business deductions include necessary expenses like equipment purchases, supplies, and professional development costs. However, personal expenses, like that daily coffee run, aren’t deductible just because you own a business. If you’re unsure, consult with your CPA before claiming a deduction.

Depreciation and Tax Planning for Asset Sales

Many dental professionals invest in real estate as a wealth-building strategy. However, Lorraine warns that depreciation can create tax liabilities when you sell an asset. Depreciation recapture means you could owe ordinary income tax on the portion of the gain attributed to depreciation deductions.

To minimize this impact, tax planning is essential. Strategies like timing asset sales, offsetting gains with losses, or utilizing a 1031 exchange can help reduce your tax burden. Before selling a rental property or dental equipment, talk to your accountant to ensure you understand the tax implications.

Avoiding Common Tax Filing Mistakes

The IRS uses electronic matching to compare reported income against W-2s, 1099s, and other tax documents. If something doesn’t match, expect a notice. One of the biggest mistakes taxpayers make is forgetting to report investment income.

For example, if you had a brokerage account that was closed mid-year, you still need to report income or gains from that account. Missing even one 1099 can lead to unnecessary penalties and interest.

Lorraine’s advice? Keep track of all tax documents, check for missing forms before filing, and review prior-year returns to ensure nothing is overlooked.

Tax Strategies for Smarter Planning

Tax planning isn’t just about what happened last year; it’s about looking ahead. Loss harvesting is one strategy that can help reduce taxable gains. If you have stocks with unrealized losses, selling them strategically can offset taxable gains from other investments, including real estate sales.

However, be mindful of the wash sale rule, which disallows a deduction if you repurchase the same stock within 30 days. Proper tax planning allows you to maximize benefits while staying compliant.

Red Flags That Can Trigger IRS Scrutiny

Certain deductions attract more attention than others. Lorraine highlights three areas where taxpayers often make mistakes:

  • Meals & Entertainment: Business meals must involve a client or work-related discussion to qualify. That solo coffee run? Not deductible.
  • Travel: Deducting a vacation as a ‘business trip’ without clear business purposes can raise red flags.
  • Auto Expenses: Claiming 100% business use of a personal vehicle is rarely justifiable unless you have multiple business locations.

Proper documentation is key. Keep detailed records and receipts to support deductions if audited.

Texas Business Property Tax: What Dentists Need to Know

For Texas dentists, business property tax (BPP) is an additional annual tax assessed by the county. This tax applies to tangible assets like dental equipment and furniture. If you’re a new practice owner, expect to pay BPP based on the initial purchase price of your equipment. However, over time, you may be able to adjust valuations to reflect depreciation.

If you receive a BPP notice, don’t ignore it. Review it with your CPA to ensure accuracy and identify opportunities to lower your assessment.

Final Thoughts: Communication Is Key

The biggest tax mistakes often stem from a lack of communication. Major financial decisions like buying new equipment, selling property, setting up a trust, can all have tax implications. Yet, CPAs aren’t mind readers.

Before making big moves, check with your accountant. A quick conversation can help you avoid unnecessary tax bills and set you up for long-term financial success.

Want more expert insights? Subscribe to Beyond Bitewings and stay ahead of the game this tax season! For personalized tax guidance, contact the Edwards & Associates team today.

​Busting Common Tax Myths for Dentists

Taxes can be confusing, especially when so much misinformation is floating around online. Whether you’re scrolling through social media, chatting with colleagues, or just assuming something sounds right, it’s easy to fall for common tax myths – some of which could leave you with a hefty bill from the IRS.

As a dental professional, understanding tax laws is crucial to protecting your practice’s bottom line. From home office deductions to retirement withdrawals, we’re breaking down some of the biggest tax myths that could trip you up. Here, we separate fact from fiction and make sure you’re not caught off guard.

Myth #1: Retirement money is tax-free.

Many people assume that once they retire, their money is theirs to spend tax-free. Unfortunately, that’s not the case – most withdrawals from traditional 401(k)s and IRAs are taxed as ordinary income. If you take out too much in a single year, you could even push yourself into a higher tax bracket. The only exception? Roth IRAs and Roth 401(k)s,which allow for tax-free withdrawals after age 59½, as long as the account has been open for at least five years.

Myth #2: Reporting dental supplies and lab fees under Cost of Goods Sold (COGS) reduces audit risk.

It’s a common misconception that classifying dental supplies and lab fees as COGS can lower the chances of an audit by reducing gross profit. However, misclassifying expenses can raise red flags with the IRS and lead to potential issues. ​ 

Myth #3: Large equipment purchases should be deferred until the fourth quarter for maximum tax benefits.

Many dental professionals believe that postponing significant equipment investments until year end maximizes tax deductions. In reality, the timing of such purchases should align with the practice’s operational needs rather than solely focusing on tax implications. 

Myth #4: Home office deductions are a red flag for audits.

There’s a lingering belief that claiming a home office deduction increases the likelihood of an audit. While this was a concern in the past, legitimate home office deductions, when properly documented, are acceptable and do not inherently trigger audits. However, keep in mind that you can only claim a home office deduction if you own a business. If you are an employee, this deduction is no longer available. 

Myth #5: Personal dental expenses are fully deductible.

Some assume that all personal dental expenses can be deducted from their taxes. However, only unreimbursed medical and dental expenses exceeding a certain percentage of adjusted gross income (AGI) are deductible. It’s crucial to understand these thresholds to avoid disallowed deductions. ​ 

Myth #6: Income from side gigs or online sales isn’t taxable.

Some people mistakenly believe that earnings from side jobs, freelance work, or online sales are tax-free. In reality, all income, regardless of the source, must be reported and is subject to taxation. Overlooking this can lead to underreporting and potential penalties. ​

Myth #7: Selling a dental practice is tax-free if reinvested.

Some dentists believe that proceeds from selling their practice are tax-free if reinvested into another venture. However, such sales are typically subject to capital gains tax, and proper planning is essential to manage the tax implications effectively. 

Myth #8: Casual labor payments don’t require tax reporting.

There’s a misconception that payments to temporary or casual workers don’t need to be reported. However, businesses are required to report payments to all workers on a Form 1099 if they total more than $600. ​

Myth #9: Government benefits like social security and unemployment are tax-free.

Many believe that Social Security and unemployment benefits come tax-free, but that’s not entirely true. Unemployment benefits are taxed at your normal income tax rate at the federal level and in most states, meaning you could owe taxes when filing if you don’t have them withheld upfront. Social Security benefits are taxed based on your total income – if you earn above a certain threshold from other sources (like retirement savings or part-time work), up to 85% of your benefits could be subject to income tax.

Tax laws are intricate and continually evolving. We can help ensure compliance and optimize you tax position, so reach out to us today for help. Relying on myths or outdated information can lead to unintended tax liabilities.​

Podcast Recap: Why Every Dentist Needs to Know Their Practice’s BAM

As a dental practice owner, you likely track production per hour, hygiene department performance, and claim filings – but are you paying attention to BAM? If not, you could be missing a crucial financial metric that helps ensure your practice stays profitable and supports your lifestyle goals.

In a recent episode of Beyond Bitewings, the team at Edwards & Associates, PC broke down BAM (Basic Amount of Money) and discussed what it is, why it matters, and how to calculate it accurately.

What Is BAM?

BAM stands for the Basic Amount of Money needed to operate your practice successfully. However, it’s not just a break-even number – it includes:

  • Overhead costs (rent, salaries, supplies, etc.)
  • Loan payments for practice purchases, equipment, or expansions
  • Owner compensation (including taxes and personal financial goals)
  • Profit to keep the business healthy

Think of BAM as a financial goal – the amount your practice needs to collect (not just produce) each month to cover all expenses while maintaining the income and lifestyle you want.

Why BAM Matters

Understanding BAM is essential for cash flow management and ensuring your practice is set up for success. It also plays a key role in staff bonus structures – since any revenue collected beyond BAM can often be used to reward the team.

Additionally, BAM isn’t just based on historical numbers. It should factor in expected expenses such as new hires, equipment purchases, and rent increases to give you an accurate picture of future financial needs.

How to Calculate BAM

To determine your BAM, you’ll need to account for:

  • All fixed expenses: Rent, payroll, utilities, supplies, insurance, and other overhead.
  • Debt payments: Loan repayments that aren’t reflected in your profit & loss statement.
  • Owner compensation & taxes: The amount you need to take home after covering all practice costs.
  • Future growth: Planned hires, equipment purchases, or operational changes.

BAM should be reviewed and updated annually to reflect any major financial changes, though adjustments – such as a gradual BAM increase (Baby BAM) – may be made in cases of significant shifts like hiring an associate or expanding operations.

The Difference Between BAM and Net Income

A common mistake is assuming that net income (the bottom-line figure on financial statements) reflects the actual cash needed to run a practice. However, BAM factors in non-cash expenses (like depreciation and amortization) and full loan payments, giving a clearer picture of financial needs.

Plan Ahead for Success

By understanding and tracking BAM, you’ll have a clearer financial goal for your practice and avoid surprises when it comes to cash flow. Whether you’re planning for growth, refining your bonus structure, or simply ensuring financial stability, BAM is a must-know metric for every dental practice owner.

Want to learn more? Listen to the full episode of Beyond Bitewings for expert insights and practical strategies!

Celebrating Our Team, The Heart of Our Success

Today, on Employee Appreciation Day, we want to take a moment to express our deepest gratitude to the incredible team that makes our Firm thrive.

Accounting isn’t just about numbers – it’s about people. And we are beyond fortunate to have a team of dedicated, talented professionals who go above and beyond every day to support our clients. Serving dental practices means juggling complex financial challenges, staying ahead of ever-changing tax laws, and ensuring each client gets the personalized attention they deserve. It’s not always easy, but you make it look effortless.

We see your hard work, dedication, and commitment to excellence. We know that busy seasons can be overwhelming, that unexpected client needs can disrupt even the best-planned schedules, and that the details of tax, accounting, and financial compliance demand constant focus. But through it all, you show up, problem-solve, and provide exceptional service that helps our clients’ practices succeed.

Beyond the work you do, we also appreciate the ideas, insights, and suggestions you bring to the table. Your voices matter. Whether it’s improving internal processes, finding new ways to serve our clients, or simply making our workplace better, we hear you, we value you, and we’re grateful for you.

So today, we celebrate you – the people who make our Firm what it is. Thank you for your passion, your expertise, and the care you put into everything you do. Your contributions don’t go unnoticed, and we couldn’t do this without you.

Here’s to you, today and every day! Happy Employee Appreciation Day!

Podcast Recap: Protecting Your Dental Practice from Embezzlement

Running a dental practice requires trust—trust in your patients, your team, and your financial systems. But what happens when that trust is violated? Embezzlement is a growing concern in the dental industry, and unfortunately, it’s more common than many realize. In a recent Beyond Bitewings, we sat down with Allen Schiff, CPA, CFE to discuss how dental practices can spot, prevent, and respond to fraud within their offices.

How Common Is Embezzlement in Dental Practices?

According to Allan, one in six dental practices will experience some form of embezzlement. Many dentists assume their practice is safe because they trust their employees, but the unfortunate reality is that fraud often comes from the person they trust most. The long-time, dedicated employee who arrives early, stays late, and manages the office finances is often the one with the most access and opportunity to commit fraud.

Signs That Embezzlement May Be Happening in Your Office

Many dentists don’t realize fraud is happening until it’s too late. Here are some red flags to watch for:

  • Overprotective control – An employee who doesn’t want anyone else handling financial matters, insists on doing everything themselves, and resists oversight.
  • Unexplained lifestyle changes – A staff member suddenly making expensive purchases or taking extravagant vacations without a visible increase in income.
  • Avoiding time off – Someone who refuses to take vacation or sick leave may be afraid that their fraudulent activities will be discovered if someone else steps in.
  • Unusual adjustments in financial records – Frequent patient account adjustments, missing deposits, or discrepancies between collections and bank statements.

How to Prevent Embezzlement in Your Practice

While no system is foolproof, there are steps dentists can take to minimize the risk of fraud in their offices:

  • Segregate Financial Duties – No single employee should have complete control over financial transactions. Have different team members handle collections, deposits, and adjustments.
  • Monitor Daily Reports – Print and review your day sheet at the end of each day. Even if you don’t analyze it in detail, knowing that you check will discourage fraud.
  • Review Bank Statements Personally – Open and review your practice’s bank statements before handing them off to anyone else. This small step can deter an employee from attempting fraud.
  • Enforce Strong Internal Controls – Use software permissions to restrict access to financial transactions and ensure that no one can alter records without oversight.
  • Conduct Surprise Audits – Randomly reviewing financial records and logs can catch discrepancies early and keep employees on alert.

What to Do If You Suspect Fraud

If you notice warning signs of embezzlement, do not confront the employee immediately. Instead:

  1. Gather evidence quietly – Work with an accountant or fraud examiner to review your financial records before taking action.
  2. Do not fire the employee right away – While your first instinct may be to remove them immediately, fraud investigators recommend keeping them on staff until a thorough investigation is completed.
  3. Seek professional guidance – A Certified Fraud Examiner (CFE) can help you collect admissible evidence and even obtain a written confession.

A Real-Life Case of Dental Practice Fraud

During the podcast, Allan shared a shocking case where a long-time dental employee embezzled more than $400,000 in implant supplies. She sold them on eBay, and the only reason the fraud was discovered was because the implant vendor congratulated the dentist on their high-volume purchases—purchases they had no idea were happening. The perpetrator was eventually caught and sentenced, but it was a painful and costly lesson for the dentist involved.

Embezzlement is a real and growing threat to dental practices, but awareness and strong financial controls can help mitigate the risks. If you own a practice, take the time to review your financial processes, set up safeguards, and work with professionals who can help you protect your business.

For more insights and tips on managing the business side of dentistry, listen to the full episode of Beyond Bitewings or contact our team for guidance. Your financial security is worth the extra vigilance!