By Dr. Rick Huot
For Florida dentists, the idea of bracing ourselves and our staff for another national emergency is quite likely not the first, nor the last, given the number of hurricanes we’ve faced in the past decade. But the new coronavirus (COVID-19) is a little different breed of emergency, since unlike our past hurricanes, it is here already — and we don’t know how long it’s going to last. Fortunately, our offices are intact, and we will be able to quickly rebound once the outbreak dissipates, and our patients will come back slowly and surely as they always do. Despite that, cash flow management will be critical in this unknown period, and it is vital you take steps now to preserve cash flow, so that your office can be restored to normal as quickly as possible.
As you can see, the current flow of information is too fluid to predict how long this pandemic will last, but you can do these 10 things right away to assure you’ll receive an adequate cash flow during the outbreak and once patient care is resumed. At the time of this writing, 25% of America had “lockdown orders” imposed on its citizens, and all workers who do not have a critical job description are urged to stay home in place. Officials have literally imposed “emergency care only” advisories for all dentists, and some states have extended that condition into late May or even mid-June. Please visit floridadental.org/coronavirus for the latest Florida-specific information. The American Dental Association (ADA) and is continually evaluating and will update its recommendation on an ongoing basis as new information becomes available.
For cash flow preservation, here are 10 recommendations, in no particular order:
1. Don’t touch your face or your 401K unless you can afford to put 2019 fiscal year money into it. I found this out by accident in July 2008 when I sold my practice. I didn’t fund the 2008 contributions for myself and my family until late March 2009. By pure blind luck, the bottom of that bear market was in March, so the funds put in were at the market low and made great gains over the years. If you’re not taking a retirement distribution, avoid the stress of constantly checking your portfolio balance while the market gyrates wildly on each rumor.
The current Dow average is around where the 2008 low was, so if you do have extra cash on hand, the market is on sale and will eventually rebound. Ignore cold calls by stockbrokers who are peddling the latest great deal on bargain stocks, and your 401K should have a small group of well-diversified index funds that are low cost and well-balanced for any financial condition.
2. Take advantage of the governor’s Florida Small Business Emergency Bridge Loan Program for an immediate injection of cash into your practice if you qualify. For more information on the program, visit floridadisasterloan.org. For questions regarding the Emergency Bridge Loan Program, contact the Florida Small Business Development Center Network at 866.737.7232 or email Disaster@FloridaSBDC.org. (Source: Florida Trend Newsletter)
3. If you haven’t done so already, have a virtual staff meeting immediately to explain what your staffing will be in the immediate time period. The first thing you need to do is NOT guarantee your staff they will be made whole for the entire time of this pandemic. That is unrealistic, and threatens their future paychecks by putting you in a tight cash flow scenario. We all respect and take care of our staff, but you have to manage the business. Large companies are dealing with the same issue right now, and a friend who is a McDonald’s franchiser said they haven’t made up their minds on this yet. You are not McDentist, and unlike McDonald’s, your patients aren’t going to make a beeline for your office once this is over.
The current Relief Package Bill that was passed by Congress just this past week guarantees 14 days sick leave to employees that have to stay home to take care of their children, or if they are quarantined. This bill will exempt businesses under 50 employees, which will likely apply to most Florida private practice dental staffs.
Liberal use of accumulated personal/vacation leave is a much better alternative to the small practice owner, and Florida dentists have likely used that route in the past in times of hurricanes. Salaried personnel such as an office manager (exempt from the Fair Labor Standards Act) can be used for phone calls, triaging emergency calls and routine office work. If this shutdown lasts more than the mandated 60 days, contact your accountant/human resources consultant for guidance going forward.
4. Stop spending on personal “stuff.” Have a family meeting and honestly outline the impact of this crisis to your loved ones. They have probably heard it before, but it doesn’t hurt to talk about it again. We’re blessed as a profession to have a stable and considerable income, but as a small business owner, we are the providers to our staff members, and if your staff sees you’re taking this seriously, they will understand the measures taken in No. 3 above.
5. Stop automatic shipments of dental supplies. Except for personal protective equipment (PPE), you should stop any ongoing supply shipment of dental or office supplies. If you don’t do this routinely, have a staff member go through all of the cabinets and drawers, and assess what you have plenty of. Many offices buy supplies on sale, and large amounts gathering dust can be slowly depleted over the next year. Just in time, inventory practices should be implemented. This is the best time to schedule maintenance on any equipment you use, including small instruments that must be shipped for repair.
6. If you must go in for emergency appointments, set up multiple teams to work at the office in shifts to prevent mass spread of the virus. That way, if one or more of the team members get infected from outside or inside the office, everybody else figures out who can’t go in anymore, and you don’t knock the whole team out. If only one person feels sick, have them get tested and then figure out the quarantine protocol for the members of that team. Hospitals are adapting this protocol all over the country to prevent a mass depletion of their health care staff, and a dental staff also is particularly vulnerable to that. Dedicate a specific chair(s) and staff area for emergency treatment to limit the potential spread of the virus to other areas of the office, and make sure the areas you use are thoroughly disinfected after each use.
7. Delay making your tax payments on April 15 by filing your taxes and you can defer up to $1 million as an individual interest and penalty free for 90 days. Your other option is the right to file for an extension, and the tax return would be due on Oct. 15. Check with your accountant for details on payments and extensions to see if you qualify.
8. Instead of paying yourself with wages, pay distributions if you have a “S” corporation. Again, your accountant should be advised of your intent to do that.
9. Run an accounts receivable report. If you have a normal billing date to send your invoices to your patients, be sure to do that, and despite the fact that your patients may not pay you right away, it’s still part of a normal office routine. You may want to insert a notice of your intent to keep your employee’s wages as best as you can, and you appreciate it greatly if they can pay their outstanding balance.
10. Run an unfinished treatment report. This will be handy once you resume normal hours in your practice, and might provide some much-needed operating capital. All of us have more spare time these days, and if your dental software can be operated from home, you can review these treatment plans from the comfort of your home office.
Please continue to check the FDA and ADA sites for more updates as we go through this pandemic. With good planning and attention to cash flow management, your office will continue to be successful, and your staff and patients will be rewarded with your due diligence.