Dental Practice Overhead Management: Tips to Control Costs and Boost Profitability

dental practice

Establishing a thriving dental practice requires exceptional clinical skills and prudent financial management. One of the most critical aspects of financial management for a dental practice is controlling overhead costs. 

High overhead can hinder growth, limit profitability, and strain cash flow, ultimately impacting the practice’s long-term success. However, with a proactive approach to managing expenses, dental professionals can reduce overhead while maintaining and, in some cases, even improving the quality of patient care.

Reducing overhead costs doesn’t have to mean cutting corners or sacrificing essential elements of your practice. Instead, it entails identifying areas where cost savings can be achieved, implementing efficient systems and processes, and regularly reviewing and monitoring expenses. 

This may involve renegotiating with suppliers, optimizing staff utilization, investing in advanced technology, and streamlining practice operations.

Let’s delve into practical strategies to help dental professionals reduce overhead costs and boost profitability without compromising the standard of care they provide to their patients. 

Understanding Overhead Benchmarks and Identifying Areas for Improvement

Before embarking on cost-saving initiatives, dental professionals must first understand the benchmarks for overhead expenses. 

The general rule of thumb is that overhead costs should not exceed 60% of total practice revenue. However, this figure can vary depending on the nature of your dental practice and the services you provide. Some common overhead cost breakdowns include:

  1. Staffing: 20-25%
  2. Dental Supplies: 5-7%
  3. Office Supplies and Expenses: 4-6%
  4. Facility Costs: 5-8%
  5. Lab Fees: 5-6%
  6. Marketing: 2-4%
  7. Miscellaneous: 5-8%

Use these benchmarks as a starting point to evaluate your practice’s overhead expenses and identify areas that may require attention. An experienced dental CPA can help tailor these benchmarks to your practice and assist in developing effective cost-saving strategies.

Negotiating with Suppliers and Streamlining Dental Supply Management

Dental supplies can account for a significant portion of your overhead costs. To minimize these expenses, consider renegotiating prices with your existing suppliers or exploring alternative suppliers who may offer more competitive rates. 

It’s also beneficial to review your inventory regularly and implement effective inventory management practices to keep supply costs under control. Consolidating orders and taking advantage of volume discounts can generate additional savings.

Optimizing Staff Utilization and Implementing Efficient Systems

Your staff are a vital component of your practice’s success, and their salaries and benefits make up a significant portion of your overhead expenses. 

To optimize staff utilization, assess various roles and responsibilities within your practice, and consider cross-training employees wherever possible. This not only promotes efficiency but also encourages team cohesion and offers staff members opportunities for professional growth and development.

In addition, evaluate and refine your practice’s processes and systems to improve efficiency and reduce wasted time and resources. This includes implementing a robust schedule management system, streamlining communication channels, and focusing on staff training to ensure productivity remains high.

Investing in Technology and Practice Management Software

While investing in technology may require an initial financial outlay, these investments can lead to significant long-term cost savings by boosting efficiency, reducing errors, and enhancing the patient experience. 

Technologies such as digital radiography, electronic health records (EHR), and practice management software can streamline operations and reduce overhead costs associated with paper records and manual processes.

Practice management software, in particular, can help manage various aspects of a dental practice, such as appointment scheduling, billing, and reporting. By adopting an integrated software solution, dental professionals can better track expenses, monitor performance, and identify potential areas for cost-saving improvements.

Implementing Energy-Saving Measures

Another way to reduce overhead costs is to implement energy-saving measures at your dental practice. Although they may seem relatively insignificant, these savings can add up over time and contribute to your practice’s profitability. 

Energy-saving measures could include installing energy-efficient lighting, adjusting heating, and cooling systems, investing in energy-efficient equipment, and encouraging staff members to adopt eco-friendly habits such as turning off lights and appliances when not in use.


Managing overhead costs is essential for maintaining a financially healthy dental practice. By evaluating overhead benchmarks, renegotiating with suppliers, optimizing staff utilization, investing in technology, and implementing energy-saving measures, dental professionals can control costs and boost profitability without sacrificing the quality of patient care.

Partnering with a dental CPA can provide invaluable insights into best practices for managing overhead costs and ensuring optimal financial performance. 

By combining these cost-saving strategies with the guidance of a trusted dental CPA, dental professionals can work confidently toward long-term success and financial stability in their dental practices. Investing in practical cost-saving solutions lays the foundation for continued growth and prosperity in the ever-evolving world of dentistry.

If you are looking for an excellent and competent CPA for dentists, we can help you. Ash Dental CPA has a team of trusted CPA accountants and offers tax services specifically to dentists. Let our CPAs take charge. We deliver high-quality services at an affordable cost. Contact us today to learn more and get started!