SaaS Brief

Navigating Uncertainty During the COVID-19 Pandemic

Village Family Dental is a multispecialty mid-sized dental practice in North Carolina. The group specializes in treating the entire family, including pediatric dentistry, prosthodontics, and oral surgery , and administering oral sedation for dentistry patients across 11 locations and three ambulatory surgery centers. Like all healthcare providers, Village Family Dental has been hit hard by the COVID-19 outbreak, necessitating agility and flexibility as it adapts day-to-day operations, cash flow management, and its overall service model to respond to constantly changing conditions and restrictions.

After postponing all non-emergency treatments and moving its back-office to a work-from-home arrangement, the organization appreciated more than ever its decision to adopt Sage Intacct’s financial management solution seven years ago. At the time, Village Family Dental’s COO, Virginia Jones, wanted to move to the cloud for greater efficiencies and more accurate data in order to help facilitate and plan expansion opportunities.

Addressing key finance challenges in crisis mode, while prepping for growth

When North Carolina issued its stay at home order last week, Village Family Dental took the necessary actions to furlough 80% of its workforce and close 11 of 14 locations, consolidating into just three regional clinics for emergency services only. During our recent webinar, “Managing Costs in Uncertain Times,” Jones shared, “Right now we are literally in crisis management mode, which requires us to be flexible as a business, so we’re planning the next 90 days very closely. We’ve reduced costs significantly and are having proactive conversations with our vendors to talk about how we can preserve the cash we have, while also looking for creative ways to treat patients and continue earning revenue during this period, such as through teledentistry.”

“Right now, cash flow is king. Everything is about cash,” she emphasized. “With Sage Intacct, our transactions continue to be processed and we’re able to monitor our balances and burn rate every day, with what we're producing from the emergency clinics that are still open. We can see our revenue cycle, including accounts payable and key vendor contacts, because it's all right there in the system.”

Jones says that having a cloud solution like Sage Intacct in place during these unprecedented times has been a game changer, since it allows her lean accounting staff to keep financial operations humming from the comfort of their own homes.

Jones has been using the lessons learned during the pandemic  to be introspective and identify areas for further improvement. “The welfare and safety of our employees and patients are our top priorities. When you are faced with market transitions like this, you can't panic. You have to manage risks well and keep your eye on the prize,” advised Jones. “In fact, I think the current environment may generate opportunities for consolidation and efficiencies of scale in the dental industry. There are practices that were looking at from a performance and profitability perspective before COVID-19 hit, and because we had detailed information on key performance indicators of each practice, we have been able to react quickly. Because of this, we may be in a position to acquire some existing practices for our portfolio, which has always been our growth model.”

Jones also noted that she benefits from having everything she needs on her custom COO dashboard and can drill into whatever she needs. This includes all sorts of critical performance indicators, from the dental group’s EBITDA, cash balance, cash flow statement, collections per month, production per month, daily net income, and weekly A/P, to operational data like its number of cases for the month, equivalent operating room days, cost per case, revenue per case, and performance versus budget. And since it’s no longer a chore to get consolidated financial statements out the door, Jones now puts her energy into answering questions like, “What is this telling me? Who made what? How do I know which provider and provider types are most profitable? What practice areas generate the most costs?”

Beyond the pandemic: Using visibility to continuously manage profitability

Anticipating what’s next, Jones hopes the group will be able to reignite this growth quickly once restrictions are lifted, personal protective equipment becomes available for its dentists and ambulatory surgery center, and families have enough expendable income to start catching up with pediatric dental work. Of course, she plans to take a conservative approach during the second half of 2020, and Village Family Dental will be ready for some peaks and valleys as the broader community breaks free of the pandemic. Sage Intacct will remain key to helping the company continuously track its cash flow and map that against gradually increasing staffing levels.

“Our financial reporting by location is more accurate and real-time with Sage Intacct, which is huge for us,” said Jones. “We can identify which offices or service lines are making money, which ones aren’t, and then quickly determine the cause and where we stand. For instance, after we decided to start offering new lines of business like frenectomies and sleep apnea services, we were able to evaluate each one’s profitability and determine whether it was a good or bad idea.” In another instance, she remembers, “We had a specialist who was producing very large dollars. However, once we got down to all the costs associated with him—including his fees, the number of assistants he required, and the fact that his equipment and supplies were more expensive—we discovered that he was our lowest profit provider, so we figured out ways to improve the situation.”

Jones also offered some advice to other healthcare practices as they navigate the pandemic. “First, speak with your employees, patients. Next, understand your burn rate. Then talk to your vendors, creditors, banks, etc. and see if you can work with them to improve your financial position.”

To learn more from Virginia Jones about how she has leveraged valuable insights in Sage Intacct to help Village Family Dental make strategic decisions as they’ve scaled from just three to 14 locations, watch our on-demand webinar on “Managing Costs in Uncertain Times”.

 

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