Firm Management
Dentist Chairs and Tax Books: How Regular Tax Planning Saves an Ohio Dentist from a Painful Tax Bill
When it comes to your teeth, dentists will tell you regular checkups and the proper upfront care are key to preventing horrible toothaches and diseases later on. Turns out the same is true in accounting – a lesson that Jed Kesler, DDS wishes he had learned earlier.
May. 27, 2013
From the June 2013 issue.
When it comes to your teeth, dentists will tell you regular checkups and the proper upfront care are key to preventing horrible toothaches and diseases later on. Turns out the same is true in accounting – a lesson that Jed Kesler, DDS wishes he had learned earlier.
Five years ago, Jed was looking to expand his dentist practice (www.jedkeslerdds.com) and open another office when his financial planner of 15 years suggested Jed meet with Chea Romine, CPA (www.RomineCPAs.com) to discuss his growing business needs. This turned out to be some of the best financial advice Jed would receive. Since then, Jed has expanded to three dental offices in and around the Columbus, Ohio, area. Most importantly, Jed meets monthly with his office manager – who is also his wife, Lori Kesler – and Chea to discuss the practice’s financial outlook and pending tax bill, enabling Jed to plan for both the short-term and long-term future of his practice.
“When I first met Jed, the biggest hurdle we had to overcome was taxes; the tax bill at the end of the year was always a surprise to Jed,” said Chea. “He could have saved a lot of money if tax planning had been done earlier.”
As the two set out to expand Jed’s dental practice, there were a lot of decisions to be made. Expanding the office created an exponential amount of behind-the-scenes work Chea and Jed had to decide what the CPA firm would do and what would be done by the staff at the dental practice. It took about nine months of trial and error for them to establish a process that worked best for all parties involved. In addition to delegating responsibilities, Jed had to account for more staff and training, as well as the distance between the offices. Ultimately, Jed decided to outsource the accounting work, so that his staff could focus on running the dental practice.
“Things were a bit more dramatic from my standpoint because our office manager was stretched pretty thin,” said Jed. “It was then that I realized I would need to rely on Chea’s firm even more to allow the office manager to concentrate on business inside the dental office as opposed to behind the scenes.”
While Jed and his staff focuses on dentistry and Chea and his firm focuses on the practices accounting, the two remain in constant communication with each other. Monthly reports and documents are stored and transferred via cloud-based systems such as Cloud9 Real Time, allowing all parties involved to have real-time access to the financial data. During the monthly meetings, Chea provides Jed and Lori with a tax projection and they review the books to make sure everything is accurate and up-to-date. Even though they communicate electronically on a regular basis, face-to-face interaction is key to remaining proactive and having a good working relationship, insists Chea.
Those monthly meetings have been very instrumental in the decision making process, from deciding the logistics of expanding to which services to outsource. Meticulous tax planning and long-term planning decided that each dental office would be treated as a separate entity. While it was a challenge upfront to train the staff on both sides on how to properly bill accounts, it was necessary for the overall success of the practice. Careful thought was also placed into deciding the location of the two subsequent offices. Jed chose areas outside of the Columbus metro area, where his practice could meet a need that was currently not met in those areas. While there are many dentists in the Columbus area, surrounding towns do not have many options.
“In expanding to the additional offices, Jed did a great job of planning. He has always been good at working ON his business, not just IN it,” said Chea. “He also understood that he should do what he’s good at and let his CPA do what he’s good at.”
Another example of Jed’s commitment to let others to do what they are good at is the practice’s website. Jed put the website into place before the first expansion and it’s outsourced, making one less thing his staff has to focus on. While outsourcing certain services can mean additional bills and accounting work, it hasn’t created any challenges for Chea and his firm.
“Our firm tries to stay flexible, customizing services based on our clients’ needs,” said Chea. “Each time Jed expanded, we had to account for the staff that would be needed and we adjust services based on what his practice needs. We make sure his expenses are inline, which means shopping around to make sure he is getting a good value at a good price. We have to make sure there’s always a return on his investment.”
Chea and Jed work closely together to ensure that Jed’s practice remains profitable and that includes keeping an open mind and bouncing ideas off each other. Jed and Chea continuously work together, bringing new ideas to each other. Once something is put on the table, the two will discuss it in great detail to make sure that any decision that is made is the right decision. This collaborative teamwork is the teeth and gums of their relationship and a testament to the success Jed continues to see.
Jed is a pleasure to deal with. He is the ideal client – willing to listen and take advice,” said Chea – a sentiment that Jed shares.
“My only regret is not meeting Chea sooner. I was with my previous accountant for more than 15 years and the service I received pales in comparison to what Chea does,” said Jed. “I recommend Chea to my colleagues all the time, especially if they have specific questions about how I run my practices or how I have handled successfully expanding.”