We are pleased to present to you a copy of our biennial survey. The information shown below and contained on the attached pages is provided to you strictly as a management tool. Its main purpose is to allow you to compare your practice with the averages and ranges of our sample and to provide some insight into the trends occurring in your profession. It is important to note that formalized statistical sampling was not undertaken and therefore, the results should not be assumed to be statistically valid.
The line entitled “Net Income before owner compensation – Income Tax Basis” on Schedule 1 constitutes the total amount available for remunerating the dentists. We have summarized how this “Net Income before owner compensation – Income Tax Basis” was allocated between different owner compensation and benefits as follows:
| Range | |||
| High | Low | Average | |
| Self employment income after adjustments show below, or salary taken | 660,443 | 57,784 | 226,892 |
| Owner/officer retirement plan contributions | 56,500 | 0 | 11,067 |
| Income tax basis profit (loss) earned by corporations | 523,048 | (46,803) | 34,320 |
| Insurance preminus and medical expenses paid on behalf of the owner/officer | 30,884 | 0 | 8,570 |
| Owner/officer payrool taxes paid or 1/2 self employment tax | 18,036 | 4,962 | 10,581 |
| Income Tax Basis | 291,431 | ||
The range columns on the prior page and on Schedule 1 present the highest and lowest amount for that particular line item. The range columns are not meant to total or show cumulative or net figures.
The average columns on Schedules 1 and 2 present the average amount for that particular line item from survey participants. The average columns add up to the “Total Expenses Disbursed” and the “Net Income Before Owner Compensation – Income Tax Basis” figures.
The percentage (%) column on Schedule 1 adds up as described in the preceding paragraph. However, the % change column on Schedule 2 is not meant to total or show cumulative or net figures. This column represents the annualized percentage increase or decrease of that particular line item over the two year period.
It is important to note that financial information from multi-owner dental practices and from practices that utilize associate dentists has been segregated into information that represents the activity of each doctor. Therefore, financial information from a sole proprietor using a part-time associate will show activity from the full time proprietor. Collections, expenses and contribution to profit for the associate are not included. By presenting information by practitioner in this manner, we are able to focus on statistics that make a better comparison across practices.
We would also like to highlight the following items:
- “Total Expenses Disbursed” and “Net Income Before Owner Compensation – Income Tax Basis” percentages on Schedule 1 include activity that may be regarded as investing or financing as opposed to operating expenses. These expenses may have practice acquisition overtones that do not necessarily compare to practices that have been operating for a longer term. To determine the adjusted “Total Expenses Disbursed” percentage, subtract “Covenants, contracts & agreements” percentage and some or all of the “Interest paid” percentage.
- Depreciation, amortization & leased equipment” expense increased from 2012 to 2014 due to office updating and expansion and taking advantage of expanded first-year write-off and bonus depreciation laws. Depreciation and amortization may also have practice acquisition overtones. As a result, these expenses may vary greatly from practice to practice. Consider adjusting the “Total Expenses Disbursed” percentage to compare expenses from operations.
- “Office and computer expenses” increased from 2012 to 2014 due to the investment practices are making in computers and the rapid changes in technology.
- ”Laundry and uniforms” costs are declining since fewer practices are incurring these costs. It is not likely that laundry and uniforms will be tracked separately in KDV’s dental statistics after 2014.
Dental Practitioners — High and Low Ranges and Averages for years ending by March 31, 2014
| Range | ||||
| High | Low | Average | % | |
| Fees Received | 2,329,615 | 241,759 | 831,527 | 100% |
| Salaries – general | 184,961 | 0 | 59,817 | 7.2% |
| Salaries – assistants | 180,730 | 0 | 63,719 | 7.7% |
| Salaries – hygienists | 398,814 | 0 | 99,587 | 12.0% |
| Payroll taxes – staff | 57,093 | 2,765 | 19,146 | 2.3% |
| Staff retirement plans | 28,102 | 0 | 6,168 | 0.7% |
| Employee benefit plans | 56,483 | 0 | 7,748 | 0.9% |
| Staff meetings and parties | 20,213 | 0 | 2,674 | 0.3% |
| Professional supplies | 198,964 | 6,585 | 62,148 | 7.5% |
| Laboratory fees | 190,889 | 4,710 | 54,536 | 6.6% |
| Occupancy expense |
118,643 | 11,486 | 50,382 | 6.1% |
| Repairs, decorate and service contracts |
23,783 | 0 | 5,829 | 0.7% |
| Depreciation, amortization and leased equipment | 119,295 | 0 | 24,729 | 2.9% |
| Interest paid | 47,518 | 0 | 7,034 | 0.8% |
| Insurance – business | 30,728 | 1,557 | 6,091 | 0.7% |
| Telephone | 13,079 | 488 | 4,391 | 0.5% |
| Office and computer expenses | 60,204 | 1,410 | 16,58 | 1.6% |
| Promotion and advertising | 63,001 | 100 | 13,939 | 1.7% |
| Meetings and seminars | 31,975 | 0 | 4,736 | 0.5% |
| Professional, banking and other fees | 90,207 | 2,650 | 20,148 | 2.4% |
| Dues, licenses and subscriptions | 8,651 | 405 | 3,062 | 0.4% |
| Auto and employee travel | 8,890 | 0 | 1,403 | 0.2% |
| Laundry and uniforms | 5,188 | 0 | 812 | 0.2% |
| Covenants, contracts and agreements | 68,664 | 0 | 5,413 | 0.7% |
| Total Expenses Disbursed | 540,096 | 65.0% | ||
| Net Income on an Income Tax Basis | 291,431 | 35.0% | ||
*Please read the explanatory notes in the cover letter regarding possible adjustments to the above figures.
Dental Practitioners — Comparison of 2014 and 2012 Averages
| 2014 Average |
2012 Average |
Increase (Decrease) | Annualized % Change |
|
| Fees Received | 831,527 | 771,183 | 60,344 | 3.8% |
| Salaries – general | 59,817 | 60,105 | (288) | -0.2% |
| Salaries – assistants | 63,719 | 56,090 | 7,629 | 6.6% |
| Salaries – hygienists | 99,587 | 88,006 | 11,581 | 6.4% |
| Payroll taxes – staff | 19,146 | 17,906 | 1,240 | 3.4% |
| Staff retirement plans | 6,168 | 6,393 | (225) | -1.8% |
| Employee benefit plans | 7,748 | 8,546 | (798) | -4.8% |
| Staff meetings and parties | 2,674 | 1,792 | 882 | 22.2% |
| Professional supplies | 62,148 | 55,666 | 6,482 | 5.7% |
| Laboratory fees | 54,536 | 54,674 | (138) | -0.1% |
| Occupancy expense | 50,382 | 50,400 | (18) | 0.0% |
| Repairs, decorate and service contracts |
5,829 | 5,185 | 644 | 6.0% |
| Depreciation, amortization and leased equipment |
24,729 | 18,724 | 6,005 | 14.9% |
| Interest paid | 7,034 | 7,923 | (889) | -5.8% |
| Insurance – business | 6,091 | 5,204 | 887 | 8.2% |
| Telephone | 4,391 | 3,946 | 445 | 5.5% |
| Office and computer expenses | 16,582 | 13,918 | 2,664 | 9.2% |
| Promotion and advertising | 13,939 | 13,899 | 40 | 0.1% |
| Meetings and seminars | 4,736 | 3,642 | 1,094 | 14.0% |
| Professional, banking and other fees | 20,148 | 16,860 | 3,288 | 9.3% |
| Dues, licenses and subscriptions | 3,062 | 2,630 | 432 | 7.9% |
| Auto and employee travel | 1,403 | 1,772 | (369) | -11.0% |
| Laundry and uniforms | 812 | 888 | (76) | -4.4% |
| Covenants, contracts and agreements | 5,413 | 5,173 | 240 | 2.3% |
| Total Expenses Disbursed | 540,096 | 499,342 | 40,754 | 4.0% |
| Net Income Before Owners Compensation – Income Tax Basis | 291,431 | 271,841 | 19,590 | 3.5% |
*Please read the explanatory notes in the cover letter regarding possible adjustments to the above figures.