Accountants for dentists

A number of factors determine what a dental practice is worth. These include:

• Turnover
• Location
• Age of fit-out
• Number of consulting rooms
• Length of current lease
• Practice accreditation

All these factors will impact on the risks of acquiring your practice. Your practice will be more valuable if the risks are lower, and vice versa.

Dental practices are usually valued on a profit multiple. A multiple in the range of 2.5-5 x is common. For example, if your practice has annual profit of $300,000 and you have a 3.5 x multiple, your practice would be valued at $1,050,000.

Dentists can take advantage of the small business instant asset write off, which allows you to fully deduct asset purchases up to $30,000 in the year they are purchased. This means that any upgrades to equipment that cost less than $30,000 can instantly reduce tax in the financial year they are purchased.

Dentists often have significant expenditure for education and travel-related expenses for conferences. It's possible to claim any education expenses directly relating to your profession that assist you in completing your job and improving your skillset.

You can also claim travel expenses for attending conferences, both in Australia and overseas. If there's an element of personal travel attached to the trip, this needs to be apportioned.

This is a common trend for medical professionals – and whilst it doesn't suit everyone, it can provide advantages in:

• Reducing overheads
• Sharing back office support
• Attracting and retaining better talent
• Passing on cost savings to patients
• Getting more consistent referrers
• Upgrading to a better location
• Sharing costs of equipment upgrades

Careful planning and consideration should be undertaken before an amalgamation is considered.