Bookkeeping, payroll, and CFO services for small businesses across Los Angeles County.

Call or Text: (626) 353-9790

What overhead benchmarks should my dental practice be tracking?

Staff costs typically run 25 to 30 percent of collections and represent your largest overhead expense. This includes front desk staff, dental assistants, and hygienists. Owner compensation is tracked separately since it comes from profit, not overhead. If staff costs creep above 30 percent, you’re either overstaffed relative to production or your collection rates need attention.

Facility costs should land between 5 and 7 percent of collections. Rent, utilities, maintenance, and property-related expenses fall here. Practices in high-rent areas of Los Angeles County sometimes run slightly higher, but consistently exceeding 10 percent squeezes margins that could go toward equipment or take-home pay.

Dental supplies typically range from 5 to 8 percent. These are your consumables like gloves, masks, impression materials, and bonding agents. A practice running 10 percent or higher on supplies is either stocking inefficiently, experiencing waste, or not categorizing expenses correctly in the first place.

Lab fees vary widely based on your service mix. General practices doing mostly cleanings and fillings might see 5 to 8 percent. Practices heavy on crowns, bridges, and implant restorations can run 10 to 14 percent. The benchmark matters less than tracking your own trend over time and understanding what drives changes.

Marketing spend for established practices typically runs 1 to 3 percent of collections. Newer practices or those in competitive areas might spend 5 percent to build patient volume. Once recall patients fill your schedule, marketing spend naturally decreases. Administrative costs including practice management software, liability insurance, and continuing education typically add another 3 to 5 percent combined.

Total overhead for a healthy dental practice generally lands between 55 and 65 percent of collections. That leaves 35 to 45 percent for dentist compensation and profit. Practices running above 70 percent overhead struggle to pay owners fairly while reinvesting in the business.

The problem is that most practices don’t actually know their numbers by category. Expenses get dumped into generic accounts, supply costs get mixed with equipment purchases, and lab fees get buried in a catchall dental expense category. Without clean books categorized correctly, you can’t compare yourself to benchmarks or spot problems early.

Start by making sure your bookkeeping breaks expenses into the right categories. Then pull these ratios monthly or quarterly. Compare to benchmarks, but more importantly, compare to your own history. A sudden jump in supplies from 6 to 9 percent tells you something changed. Maybe ordering patterns shifted, maybe there’s waste, or maybe someone just miscategorized a purchase. That’s when benchmarks become useful for actually running the practice rather than just being numbers on a page.

If you’re not sure where your practice stands, a small business accountant in the San Gabriel Valley who works with medical practices can help restructure your chart of accounts and establish the tracking you need to monitor these benchmarks consistently.

LA's Small Business Bookkeeper

The Next Step:
A Short Conversation

Tell us about your business and what you're dealing with. We'll listen, ask a few questions, and give you a clear price for the work.

More Questions

What is work-in-progress accounting for contractors?

Work-in-progress accounting tracks costs and revenue on jobs that span multiple reporting periods. It prevents your financials from showing huge losses during construction and massive profits when projects complete.

Read answer

How do I verify the revenue claims of a business I'm considering buying?

Tax returns are the most reliable starting point since sellers can't easily inflate numbers reported to the IRS. Cross-reference with bank deposits, financial statements, and sales records to confirm what the seller claims matches reality.

Read answer

What is financial due diligence when buying a small business?

Financial due diligence is the process of verifying a seller's financial claims before you buy. You're confirming revenue, expenses, liabilities, and assets are what the seller says they are, not just taking their word for it.

Read answer

What financial documents do buyers want to see when purchasing a business?

Buyers typically request three years of profit and loss statements, tax returns, balance sheets, bank statements, and aging reports. They're verifying the seller's claims and looking for consistency, trends, and red flags.

Read answer

How do I track client trust funds separately from operating expenses?

Client trust funds require a separate bank account from your operating account. In your books, trust deposits create a liability to clients until fees are earned and transferred.

Read answer

How do I evaluate the accounts receivable of a business I want to acquire?

Request a detailed aging report and analyze what's actually collectible versus what's on the books. Old receivables, customer concentration, and collection history reveal whether A/R is a real asset or an inflated number you'll never collect.

Read answer

Villa Group is a San Marino accounting firm serving small businesses across Los Angeles County. We handle bookkeeping, payroll, CFO services, and business sale preparation. Led by Christian Villalba, MBA, with over a decade of experience and 400+ clients served.

Client Reviews

5-Star Rated Firm

Social

© 2026 Villa Group LLC