Bassim Michael has created Practice Gauge, a cloud-based analytics platform for his fellow accountants to use with their dentistry and veterinary clients.
“I know a lot of my CPA peers think I’m crazy to be working with dentists,” he said. “I really enjoy working with them. Once we found out we enjoyed working with them, we started figuring out what they really wanted. We found out they were very competitive, so they wanted to compare to their peers. They wanted more proactive tax planning, and they also wanted quarterly meetings.”
He finds they are more open to meetings with their accountants. “I think what helps for dentists is that they usually work three or four days a week, so they actually have time to meet with their CPAs,” he said. “So we created a client-focused type of practice, and we bundled accounting, tax advisory and tax planning, and they really liked it. We did value pricing and fixed pricing long before it was popular, back in 2006.”
Besides Practice Gauge and Only for Dentists, he also runs Michael & Company, CPA, which does more varied kinds of work for clients.
“We help them with collecting bills, and they like the practice management overall and financial management. We basically do write-up, accounting, tax, tax compliance, tax planning, business advisory. We don’t get into debt collection, billing and stuff like that. We try to basically act like their CFO.”
He works with about 200 dentists now in about 16 states but is based in Southern California. Through the other CPAs using Practice Gauge he estimates he is supporting a total of about 300 dentists and veterinarians.
“We always ask our clients, what’s keeping you up at night? Interestingly enough, it’s probably the same things that are keeping accountants up at night,” said Michael. “Staffing is really big on their mind. And what complicates it for dentists and other health care providers is that if they are dependent on insurance reimbursements, insurance payments have not gone up. They’ve actually gone down, and not kept up with inflation.”
He noted that while salaries since COVID have risen dramatically, insurance company reimbursements have not. “We’ve seen strong pressure on their earnings, and many providers are actually looking at going out of network with their insurance, because they just cannot be profitable,” said Michael.
In some cities, hygienists get paid $60 or $70 an hour, while insurers are only reimbursing them $50 or $60 for doing the cleaning. “It’s not even covering the salary of the hygienist,” said Michael. “If the hygienist is spending an hour, and there’s a cancellation right then, for sure they’re going to be losing money on that. It’s been very challenging for dentists who run their practices, and that’s why they need guidance from us.”
He developed Practice Gauge about six years ago, and it keeps track of information such as overhead and cash flow. The program is certified by Intuit, connects with QuickBooks Online, and is available on the Intuit marketplace.
“It picks the data from QuickBooks Online, and then we’re able to also compare a particular client’s data with the averages of the other clients in the database,” said Michael. “We can sort by zip code specialty. We can do a lot of stuff, and we don’t just do it for dentists. We can also do it for veterinarians, and we could also add other specialties or other types of professional services. We could actually do it for accountants as well.”
The system tracks financial data and overhead profitability. “We want to track professional and paraprofessional salaries,” said Michael. “Over the last four or five years, salaries have become your biggest expense. We want to track what percentage of revenues that’s consuming.”
The program does peer analysis and trend analysis based on information from the dentists and vets in the database. “Trend analysis is when you’re comparing this year to previous years and peer analysis is when you’re comparing your data to other averages in the database,” said Michael. “No one can see what each individual practice is doing. They just hit the averages. Data security is very important to us. That’s why we undergo an audit every year. The third report that we provide is monthly collections. It shows the collections in a graph form and also in a table format.”
The report also offers information on net collections versus net operating income. “We’re really big on determining what the true operating income is,” said Michael. “The biggest challenge that a lot of CPA firms are having with their clients is being able to provide the deliverables in a timely manner, and this automates that part. If CPAs want to provide advisory services, that report could become the focal point of your quarterly or monthly advisory meeting.”
