GAAP and the Profit First Equation
May 27, 2024
Dentists work hard, their dedication is remarkable and they deserve fair compensation, which, unfortunately, isn't always the reality.
Let’s understand how fair compensation can be achieved within your business. GAAP, or Generally Accepted Accounting Principles were established in the U.S. during the 1920s. GAAP provides standardized guidelines for accountants when reporting business income to the government. The GAAP formula, still widely used today, is:
Sales – Expenses = Profit
In essence, businesses generate sales, collect revenue, cover their expenses, and retain what's left as profit. However, many small business owners, including dentists, find that the remaining profit is often less than expected or deserved. That's where the Profit First system can make a difference.
By flipping the equation, there’s a mindset shift to putting profit first. It’s the best "pay yourself first" model as this approach helps dental practice owners to be paid for their work and achieve financial freedom.
If you're curious and want to learn more about this approach, head over to my website at www.profitfirstdentist.com. You can download the first two chapters of the book for free under the Free Resources tab. And while you're at it, don't forget to subscribe to the Profit First YouTube channel (USA, Canada) for all the latest tips and financial strategies for managing the business side of a dental practice.
-Barb Stackhouse, RDH, M.ED.
Mastery Profit First Professional
"I’m Barb Stackhouse, author of Profit First for Dentists. You might recognize me as the professional behind the Profit First approach for dental practices. I’m passionate about helping dentists implement this effective cash flow system, which is why I wrote the book. My goal is for more dentists to read it and integrate this system into their practices because it genuinely works."
-April Stroink, BComm, RHU, EPC, PFP
Advanced Profit First Professional
With over 25 years of financial expertise, April Stroink helps in transforming the financial health of dental practices across Canada. As an experienced Profit First coach, April is committed to helping you increase your profits, optimize your cash flow, and achieve financial peace. She believes that your business should enrich your life—enabling you to create the life and business of your dreams without compromise.
