As the owner and operator of your own dental practice, you know it’s important to keep pace with the changing trends and updates in technology. That means making sure you have up-to-date equipment so that you can provide the highest possible level of care. You may have heard that, in many industries, you want to make large equipment purchases in the fourth quarter of the year so that you can receive the maximum tax benefit. This is not best. Keep reading as your dental industry experts explore the best time to purchase dental equipment.
The Fourth Quarter Myth
In order for any of your business expenses to be considered tax-deductible, the expenses need to be incurred by the final date of the year. That means that it doesn’t matter when you make the purchase, concerning your deduction. The tax benefits remain the same whether you buy the equipment on New Year’s Day, New Year’s Eve, or anywhere in between. In reality, the financial benefits of purchasing new equipment may prove more fruitful by buying the equipment earlier in the year.
On the other hand, if you purchase equipment earlier in the year, such as a time when business traditionally is slow, this means you can direct your personnel resources toward training your team to use the equipment. Otherwise, by adding the equipment at the end of the year when your schedule may be complicated with the holidays and social commitments for your team, it may take well into the first quarter of the new year to get everyone up to speed on this new addition.
Reasons to Buy New Equipment Sooner Rather Than Later
Stable overhead: If you spread out equipment purchases throughout the year, it keeps your bottom line from fluctuating so much and potentially leading to losses in December due to the increased expenditures. By planning equipment purchases at scheduled intervals during the calendar year, you can maintain a consistent expense ratio.
Extra revenue: Maybe you’re adding CAD/CAM technology so that you can make restorations chairside. Perhaps you’re incorporating the latest digital scanning device to further streamline the process of procedures for your patients. Many equipment purchases increase revenue because you can add new services, work more efficiently, streamline production, and see more patients on an average daily basis. If increasing revenue is the goal, wouldn’t you want to do so as soon as possible? We thought so… that means the sooner you add the equipment, the sooner you’ll see your profit margins headed in the right direction—up.
Expert Dental Consulting Services
Just because you are an experienced and highly-trained dentist, that does not mean you possess a wealth of business acumen. It takes an expert to review profit and loss data for any business, and that expertise is available to you through the team at Bryant Consultants. Our dental consulting services can evaluate every aspect of your practice if you desire, helping you come up with a monthly tax budget and analysis and a financial plan to keep your practice economically viable in the short term and more profitable in the long run.
Right now, we’re offering any practice a complimentary one-hour consultation to practice owners just like you. To schedule yours, contact our office by calling (877) 768-4799. Meanwhile, in order to continue to receive the latest updates, please follow us on Facebook and Instagram.
