Case Studies
Improving access to the practice’s accounts
More about this projectDentAcc therefore offered to take over the bookkeeping and provide the principal with clarity on the practice’s accounts, including frequent updates on:
- Where improvements could be made
- How much the practice was earning
- How much was owed
- How much the practice was worth each month
Enabling constant access to the accounts
DentAcc informed the dental client that we were ready whenever needed to take over the accounts whenever the practice required.
Once called upon, we immediately helped the dentist by:
- Taking control of the bookkeeping
- Storing the practice’s accounts ‘in the cloud’
- Providing regular management information
- Giving the dentist constant access to the accounts
- Providing daily, weekly & monthly figures
The dental client has since cut their bookkeeping costs by 75%, thereby improving the practice’s profitability.
Providing a complete bookkeeping service
Since taking over the dental client’s accounts, DentAcc now looks after their bookkeeping and payroll. The dentist benefits from regular account updates that they were not receiving before working with us.
The dentist has been delighted with our work, and benefits from:
- Accounts that are accessible at all times
- Regular, easy to understand updates
- No longer being dependent on one person
- Feeling assured that the bookkeeping is being done right
- Clearly understanding the practice’s financial situation
- Cutting bookkeeping costs by 75%
- Continuity of service throughout the year
DentAcc has also ensured that the bookkeeping is easily transferrable. That way, if the practice wanted to take back the bookkeeping for whatever reason, this would be easy to do. The dentist has said that this is unlikely since the principal is now getting all the information he wants and needs at a fraction of the cost.
Increasing profit fourfold and ensuring a sustainable future
More about this projectOur dental client contacted us three years ago. He was seriously considering selling the practice, as it was losing money and the principal was struggling to provide for his family.
The dentist needed help with:
- Increasing the profit being made
- Restructuring his loans
- Getting out of tax avoidance schemes
The dentist’s previous accountant had recommended the practice subscribe to two tax avoidance schemes, which had failed and left the client owing a significant amount of tax.
Our client had already reached a settlement with HMRC for the tax outstanding, but needed to acquire a number of loans to get the settlement dealt with.
Clearly organising the client’s accounts
DentAcc was brought in to help resolve the problems identified. This was done by helping our client better organise and understand their accounting numbers. That way, recommendations on how to increase profit could be made.
To do this, we carefully studied the dentist’s:
- Bookkeeping
- Accounts
- Pricing
- Overheads
We then set the dentist up with a cloud based accounting system, because their old one was a manual system that was difficult to get meaningful information from.
DentAcc then worked alongside our client to produce accounts which were:
- Accurate
- Timely
- Easy to understand
Increasing long-term profitability
Next, the dental client was provided with expert recommendations on how to increase profitability and reduce overheads. We achieved this by using benchmarking of dentistry practices to compare the dentist’s prices and costs against competitors.
Our findings showed that our client’s prices were too low compared to competitors, and that this was limiting their profit. This gave the practice the confidence to raise their prices and feel positive that they would turn a profit.
Since this change, the dentist’s profitability has increased fourfold per annum. We have regular conversations with the practice about their:
- Profit & loss accounts
- Operating & fixed costs
- Cash flow
- Recent progress
This results in high levels of customer satisfaction for the practice, and an ever-improving profit.
Since there is now a substantial profit being earned, the practice has managed to pay off the loans and is now accumulating positive cash balances in the bank.
Helping the client incorporate their practice
Finally, we helped the dentist incorporate their practice into a limited company. This was left until last because there was no point restructuring the business until a profit was being generated by incorporating the business into a limited company.
The tax liabilities of the business and risk profile for the principal have now been lowered.
Ensuring the client’s prosperous future
By working with our client for three years, DentAcc has helped the practice principal to:
- Increase profit fourfold
- Build confidence in the practice’s future prosperity
- Reduce personal stress and provide for their family
- Preserve the jobs of the practice’s staff
The principal has since said that the worst thing she could possibly have done was to have sold the practice, despite this initially being the intention.
The dentist now has complete control over their accounts and can look forward to a rewarding, profitable and successful future.
Helping our client to incorporate their practice
More about this projectOur dental client, a dental practice operating as a sole trader, contacted DentAcc because they wanted to incorporate the practice as a limited company. The dentist’s previous accountants were unsure whether incorporation was a good step for the practice to take and was reluctant to provide any advice.
DentAcc was asked to advise on the viability of incorporation and to guide the dentist through the various steps involved.
Advising on the viability of incorporation
We looked through the practice’s accounts to ensure that incorporation was a financially worthwhile option. Once we established that it was, we helped our client to understand:
- How incorporation would benefit their daily practices
- The costs involved when incorporating a practice
- How long the incorporation would take
- Restructuring loans, fixed assets and goodwill
- Incorporation in respect of NHS contracts and private practice
We then set about helping the dental client to incorporate their practice.
Ensuring that the valuation was accurate
DentAcc knew that, when incorporating a practice, HMRC often challenges the valuation of goodwill.
We ensured the valuation of the private practice was supported by calculations and third party evidence and the HMRC’s objections and challenges could be rebutted.
Just after the incorporation, HMRC opened an enquiry. It focused on the valuation and the enquiry was subsequently closed with no adjustment to the valuation. As a result, there was a substantial tax saving of in excess of £660,000.
Restructuring a practice to enable a partner to retire
More about this projectOur dental client was a dentistry partnership when they first approached DentAcc. They wanted our help because one of their partners was retiring and wasn’t getting the support they needed from their existing accountants.
They required a restructuring of the practice so that the retiring partner could be bought out. That way, the practice could continue.
Successfully restructuring the practice
DentAcc was brought in to help the dentist:
- Restructure the practice
- Restructure the loans in the practice
- Ensure entrepreneurs relief tax relief was available to reduce Capital Gains Tax for the retiring partner
As part of restructuring, DentAcc helped our client refinance the business so that the retiring partner had a significant cash sum on exit.
We also ensured that the restructuring was tax efficient for both the retiring partner and the continuing partner in the restructured business.
A long-standing relationship
The results of our work were that:
- DentAcc still acts for the retired partner, as he is now an associate
- The existing partner has the practice in a limited company
- All loans were successfully restructured
- There is long-term tax savings moving forward for the remaining partner
The dental client was incredibly pleased with DentAcc’s support.
Helping our client to sell their practice
More about this projectOur dental client contacted us because they had been offered a large sum for the sale of their practice. DentAcc was asked to assess the viability of the deal, and how it may be structured in the most tax efficient way.
Going through the details of the deal
We closely read the terms of the offer, to ensure that it was as our client has understood it.
By closely reading the details, we were able to:
- Clarify the conditions of the offer
- Clearly inform the dentist of what they were being offered and how much it was worth net of tax
- Make recommendations on the value of the deal and whether it was in line with market expectations
- Advise the dentist on how the deal could be structured
By going through the offer with a fine-toothed comb, we found that the deal was not as attractive as the client initially thought. We clearly communicated how it was different to their expectations – so they could plan accordingly.
We were able to renegotiate critical aspects of the draft contract to secure additional value we knew that our client’s company was worth.
Meeting everyone’s expectations
Following our explanation and recommendations, the dental client chose to go ahead with the revised deal. Their expectations had been met with the amended offer.
This way, they have been able to:
- Sell the practice for a very large sum of money
- Continue supporting their family
- Move on with their professional career
The dentist was delighted with DentAcc’s service.