“Tales from the Troubleshooter #1” Dentinal Tubules reaches 500.

Congratulations to Dhru Shah and the Dentinal Tubules “team” (I rather suspect that’s Dhru and er…Dhru) on publishing their 500th article. I bask in the reflected glory that the article that marks No. 500 is one of mine.

It’s the start of a new series on Dentinal Tubules that reflects the work I do, called “Tales from the Troubleshooter” the first few will tell the story of describe Jimmy’s practice. You can read it here but do check out Dentinal Tubules too.

Tales from The Troubleshooter – Case 1. Jimmy’s story

Part 1. Where’s the money going / gone? (Financial Controls is the second of the Seven Pillars of Dental Practice Management ©)

Complaint
“Help me Alun, I’m working my guts out, there’s plenty of patients but I’m losing money hand over fist. The bank are threatening to remove my credit and I don’t know what I’m doing wrong.”

History
Jimmy McGovern owns a specialist orthodontic practice in a Cathedral city. He had a larger than average contract with his PCT and had worked with one associate since starting the practice 8 years earlier, recently the first associate had moved on and been succeeded  by another.

There was a history of threatened clawback since year one due, initially to a misunderstanding of the regulations subsequent to poor communication from the Primary Care Trust. However the PCT had shown tolerance and allowed the practice to roll on the clawback year on year.

Jimmy had tried to sell the practice but the corporate he had spoken to had told him they would only buy if he was incorporated the practice. He consulted with the PCT who told him that they would not condone his incorporation and would probably put the contract out to tender if he tried to sell to the body in question. The legality of their position can be argued, I am aware, but when you feel you are looking down the barrel you just hear the “no” and your world gets smaller and your choices reduce.

Like most dentists, Jimmy enjoyed the clinical elements of the business above all others. He trusted his first associate and his practice manager to take care of the management of the business. For these duties he rewarded them well; his practice manager earning a salary equating to  the full time equivalent of £31,000 per year and the associate drawing in excess of £100 K for a three day week. The payroll was done by an outside company and an individual suggested by his accountants came in several times a year to “assist” the practice manager loading information onto the Sage accounting software that had been installed by his accountants.

He paid the accountants a retainer of just under £300 per month and this was topped up when accounts were prepared.

Examination
First up I wanted to see where they were now and where they were coming from. The day to day financial management was done by reconciling paper bank statements against the cheque book. There was no on-line banking available for immediate checking of cash-flows. Although they were right up at the top of their overdraft (£190,000!) nobody was able to tell me what the situation was that day.

I asked to see the previous accounts and was pointed at two large boxes in the cellar, when I explained I meant the finalised accounts produced by the accountants I was met with shrugs.

At this time they were 3 months into their new financial year and I would have expected the preparation of accounts for the previous year to have at least been started. In reality not only had these not been commenced it turned out that accounts for the previous two years were, “still awaiting completion”.

As a related finding it turned out that the practice manager who had apparently been counting UOAs and rather heavy handedly managing the appointment books had completely miscalculated her numbers. She had ensured that in March just a handful of new patients were seen and no “bond ups” at all were done. As a contrast in April the practice achieved 12.5% of its target for the year. Three months later the PCT informed the practice that they had under-performed by more than 10% and this time round, due to the squeeze from central government, there would be no roll over. How did we want to repay them?

Urgent Treatment
This (in my opinion) is unacceptable in a professional firm. With Jimmy’s hesitant approval as he had known them for a long time and, in spite of the evidence, felt some loyalty, I moved the business to a different firm of high street accountants with whom I had done business in the past and who had saved me from bankruptcy more than 20 years ago. Incidentally it took three letters and several telephone calls for the old accountants to release what information they had to the new firm.

It turned out that Jimmy had been paying estimated tax bills for the past couple of years with the knowledge of his accountants so the next step was for the new firm to tell HMRC that mistakes had been made and they were dealing with things. This took the heat from one source away from the client but didn’t get the bank off his back.

So next up came a frank and honest meeting with his bankers who seemed glad to see a face (even mine) rather than have to keep dealing with telephone calls that weren’t returned and letters that went unanswered. I was able to persuade them to put everything on hold for a month and promised to return with some outline accounts for the previous years and cash-flow forecasts for the next few months.

It became increasingly apparent that the practice manager wasn’t capable of managing a stall at a car boot sale let alone a business with a turnover of more than half a million pounds. Unfortunately my hands were tied when dealing with her (see next month’s instalment) so we had to bypass the blockage. This was done by running the accounts off-site using a simpler software package and introducing spreadsheets for cash flow forecasts, budgets and analysis.

The next stage.
The size of the overdraft was unacceptable all round. Normally it would have been reduced to the level a month’s turnover with the remainder converted to a loan. Fortunately Jimmy had a good IFA and we were able to cash some of his investments which were doing very little for him and bring down his indebtedness to the bank.

It turned out that he had overpaid HMRC in the previous 18 months by approximately £60,000 so the immediate pressures were reduced and we were able to get a handle on what was due and when, so that planing could take place.

The repayment of the 10% underpayment is to take place over the next 12 months so something will have to be done to find a replacement income, fortunately the demand for private orthodontics is high in the locality.

There will be more about the marketing of the business in the future but I think that’s a good pace to leave Jimmy’s business for this month. He has survived the immediate dangers but is not out of the woods by any means.

 

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The Monday Morning Quote

“If we get too far ahead of ourselves we will fall over.”

Graham Henry


 

The Weekend Read – Brush by James Goolnick

This review first appeared on GDP-UK www.gdpuk.com

I read this book at a single sitting and really enjoyed it as a “fly past”. It’s full of ideas and tips resulting from James’ experiences of personal and professional life, initially as an associate but primarily as founder and principal of Bow Lane Dental in the City of London. James shares the influences and philosophies that have helped shape his outlook and made Bow Lane a practice to admire and brought James the respect and acknowledgement of his peers. Taken like this it’s a thoroughly enjoyable skim across the surface of what it takes to be a success when you do things “my way”.

James straddles the line between innovator and early adopter, he’s definitely an educated opinion leader when it comes to clinical matters but hasn’t been afraid to try innovation in his business and is honest enough to share his few failures with the reader.

The book is laid out well with chapter headings that are straightforward to follow making it easy to return to and dip in and out, this also makes it suitable as the basis for a number of staff meetings.

Dr Goolnik definitely “gets” not only the advances in technology and communication but also the importance of the traditions of what is a relationship, rather than a transaction, based business. To read of someone advocating some of the marketing techniques embracing social networking that have worked for Bow Lane will come as a surprise to the practices who are still to be convinced of the value of a website. Currently these are frequently the practices that are beginning to wonder what happened to their patients.

Worthy of mention is his attitude to recruitment, team building, retention and reward. Utilisation of psychometric tests including Kolbe Wisdom™ is refreshing. There are few, if any, businesses that wouldn’t benefit from adoption of the Bow Lane approach.

I particularly enjoyed James when he was in crystal ball mode in the penultimate chapter “What does the future hold?” I’m sure that 50% of what he predicts will happen but which 50% that might be and what else will have an influence, who can tell? As this was written in 2011 he’s able to talk about the CQC but would they have got a mention 12 months ago?

This reflects the rate of change in life; dentistry is no exception and the author goes to lengths to tell the reader that in order to be successful and continue to stay ahead you have to keep evolving and improving. The competition in dentistry is fiercer than ever before and “change is the only constant”. Wise words.

I have a couple of small criticisms. One is that it comes across as a little simplistic and doesn’t necessarily reflect the extra hours of work and miles walked that are done by any successful entrepreneur alongside those when you’re doing what you’re paid for. I’m minded of the words of one of my mentors, “If it was that easy we’d all be millionaires”. The fact that James eschews alcohol, doesn’t watch TV and is dedicated to physical fitness hints at his dedication.

Also a formal reading list rather than the few mentions as footnotes would have been of benefit to the reader in order to follow up the author’s influences but these are small quibbles.

In short this is a welcome addition to the dental library and a good starting point to introduce change in your practice and life, but in the same way that this is James Goolnik “so far”; Brush is the start but not the end.

All profits from this book go to Dentaid. Available from Amazon here.

 

 

Two cardinal rules for success.

First – never believe your own publicity or hype.

Second – never count your chickens before they hatch / spend the profit before it’s in the bank / celebrate until you cross the line.

 

Is your website up to date?

Or are you relying on very old excuses?

I know that the weather caused disruption at the tail end of last year but it’s now the last week in March and FlyBe are still making excuses.

So one of two things is going on:

  • Their recovery from the snow caused problems is painfully slow or
  • Their website people have forgotten to check this page.

Dear Sir/Madam

Thank you for your email.

We would like to assure you that your comments have been forwarded to a member of the Customer Relations Team and you will receive a response in due course. Please be advised that due to high volumes of correspondence received following the adverse weather conditions experienced in December and January, our response time will be longer than normal.

We will endeavour to answer general queries as soon as possible.

We thank you for your patience during this time.

Yours sincerely

Customer Relations Admin

The Monday Morning Quote

Our deepest fear is not that we are inadequate.

Our deepest fear is that we are powerful beyond measure.

It is our light, not our darkness that most frightens us.

We ask ourselves, Who am I to be brilliant, gorgeous, talented, fabulous?

Actually, who are you not to be? You are a child of God.

Your playing small does not serve the world.

There is nothing enlightened about shrinking so that other people won’t feel insecure around you.

We are all meant to shine, as children do.

We were born to make manifest the glory of God that is within us.

It’s not just in some of us; it’s in everyone.

And as we let our own light shine, we unconsciously give other people permission to do the same.

As we are liberated from our own fear, our presence automatically liberates others.

Marianne Williamson

 

The Monday Morning Quote

“The world can only be grasped by action, not by contemplation…

The hand is the cutting edge of the mind”

Jacob Bronowski

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