If you run your own dental practice, chances are you’ve felt this before. Your schedule is packed, your revenue looks decent, and you’re working harder than ever. But for some reason, it still feels like the business isn’t moving forward the way it should.
That feeling usually comes from not having a clear picture of your practice’s financial health. You might have a rough idea of how much you produce or how much is in your bank account, but the real story is in the details.
At Core Advisors, we help dentists look at five specific financial metrics every dentist should track that tell you what’s really going on. These aren’t just numbers you look at once a year. They’re tools you can use to run a smoother, more profitable, and less stressful business.
Let’s walk through what they are and why they matter.
1. Profit Margin
Profit margin is what’s left after you pay all your bills. It tells you if your practice is actually making money, not just generating revenue. Most dentists are aware of their top-line production, but that doesn’t always translate into profit. You can be producing more than ever and still have very little to show for it if your costs have crept up along the way.
A healthy net profit margin for a dental practice typically falls between 30 and 40 percent. If it dips below that, it’s often a sign that overhead is too high or collections aren’t where they should be. We’ve worked with dentists who assumed things were going fine, only to realize they were working long hours for razor-thin margins.
When you track this number monthly, it gives you a clear sense of whether your practice is supporting your lifestyle and goals, or if something is quietly draining your profits.
2. Break-Even Point
This is the minimum amount of revenue your practice needs to generate to cover all your costs. It includes everything from rent and payroll to dental supplies and software subscriptions. Once you pass your break-even point, the rest is where your profits begin.
Knowing this number helps you make decisions with more confidence. For example, if you know your break-even point is $80,000 a month, and you’re already at $90,000 halfway through the month, you’re in a strong position to plan for reinvestment, hiring, or even taking time off.
But if you don’t know where that line is, you’re essentially guessing. We’ve seen practices work nonstop, thinking they’re doing well, only to find out they’re hovering just above break-even month after month.
Clarity here means control. Once you understand how much it takes to keep the doors open, it becomes much easier to focus on profitability.
3. Collections Percentage
You can produce a million dollars a year, but if you’re only collecting 90 percent of it, you’re leaving real money on the table. That’s where the collection percentage comes in.
We pay close attention to net collections, which is the amount you actually collect compared to what you expected based on your PPO agreements and fee schedules. Ideally, this number should be at or above 98 percent. Anything lower usually points to breakdowns in your billing process, insurance follow-ups, or patient communication.
Even a five percent gap between production and collections can represent tens of thousands of dollars over the course of a year. And because it doesn’t always show up clearly in your P&L, this issue can go unnoticed for a long time.
Tracking this regularly helps you tighten up systems, improve accountability at the front desk, and make sure you’re actually getting paid for the work you’re doing.
4. Cash Flow
This is the one most dentists feel before they see it. You might be profitable on paper, but your bank account still feels tight. That’s a cash flow issue.
Cash flow looks at how money moves in and out of your practice. It answers questions like, are you consistently bringing in more than you’re spending? Are your collections and deposits timed in a way that supports payroll and overhead? Did a big equipment purchase or slow insurance month quietly wipe out your cushion?
When you understand your cash flow, you stop reacting to the ups and downs. You start planning with more stability. You can build reserves, invest in your team, or set aside funds for growth—all without wondering if you’re going to come up short at the end of the month.
And the best part is, once you start paying attention to this, it becomes easier to manage. You start spotting patterns and making smarter decisions about timing and spending.
5. Goal-Based Forecasting
This is the piece most dentists are missing. You have goals for your practice—more revenue, paying down debt, bringing on an associate—but how do you actually map out a plan to get there?
Goal-based forecasting is about working backward. If you want to add $250,000 in revenue next year, how many more patients does that mean per month? What if you improve case acceptance by ten percent? Could a small fee increase or more efficient scheduling get you most of the way there?
Instead of guessing, you start running scenarios. You see what happens if you reduce overhead or increase hygiene production. You get a feel for how one lever affects the others.
It’s one thing to set a goal. It’s another to have a clear, measurable plan for reaching it. That’s what this kind of forecasting makes possible. And once you get the hang of it, it becomes a regular part of how you plan and make decisions.
Final Thoughts
You don’t need to become a financial expert to run a successful practice. But you do need to keep an eye on the right numbers. These five metrics – profit margin, break-even point, collections percentage, cash flow, and goal-based forecasting – will tell you more about your practice than any single report ever could.
They help you get ahead of problems, plan for growth, and make smarter, calmer decisions. And best of all, they don’t have to take hours to track. With the right systems in place, you can see how your practice is doing in just a few minutes each month.
If you want help setting up a clear system for tracking and understanding these metrics, we’re here for that. We’ve built tools that make it simple, and we walk through the numbers with our clients every month so nothing falls through the cracks.
Head to our Getting Started page to schedule a quick intro call. We’ll show you how these numbers apply to your practice and how we can help you use them to grow with more clarity and confidence.
And if you’re already thinking about your goals for 2025, this is a great place to start.
