What Great Dentists Get Wrong About CPAs (E.285)

“Accountants know the cost of everything and the value of nothing.” ~Chris Sands

Dentists are great at dentistry—but most struggle when it comes to financial clarity. In this episode, Chris Sands, co-founder of Pro-Fi 20/20, shares how his team is reshaping the role of CPAs in dental practices—and why so many doctors feel frustrated, overtaxed, and unsupported.

Chris gets real about what dental entrepreneurs actually need:

• A CPA who meets with you quarterly (at minimum)
• Clarity on your cash flow, spending behavior, and tax structure
• Avoiding silent killers like loan-to-shareholder accounts
• A strategic roadmap tied to your goals, not just your spreadsheets
• Behavioral finance coaching that helps owners stay on track

This episode is both a wake-up call and a roadmap for dentists who want to take control of their numbers—and stop feeling like their CPA is just sending tax returns and crossing fingers.

Key Reflection Questions for Listeners:

• Do I meet with my CPA more than once a year—and do they speak my language?
• Have I reviewed my loan to shareholder account in the last year?
• Am I building a strategy based on my goals, or just reacting to tax season?

 Listen now to stop flying blind—and start getting the financial clarity your practice deserves.

TRANSCRIPT

 

[00:00:00] Regan Robertson:Doctor, have you ever felt frustrated with your CPA? I know I hear it a lot. I also hear that dentists get overwhelmed by surprise tax bills or business owners in general just get hit with them, or perhaps you’re just unsure how to manage your cash flow like a true business owner. If so, this episode is for you. Today I am joined by Chris Sands, co-founder of Profi 2020, a firm that is redefining what dentists should expect from financial advisors. Jump in with me as Chris shows behind the scenes story of how we launched Profile 2020, some of the top financial red flags dentists face, and you may be facing too, and he provides practical behavioral approaches to achieving true financial health in your practice. Let’s jump in. Welcome to Everyday Practices Dental podcast. I am your host, Regan Robertson, here with a wonderful individual which. Which might seem, uh, counterintuitive at first. Uh, Chris Sands is a co-founder and partner Pro-Fi 20/20 Dental CPAs and if you are familiar with the consulting world Dental Consulting specifically, uh, I hear every year at the end of the year, uh, you know, clients will say, our CPAs told us to, to cut consulting. They just see it as a line item. They don’t understand it. Yeah. So get rid of ’em and, you know, you’ll save, you’ll save a couple thousand, few thousand dollars a month, whatever it is and, uh, and so you might be asking, you know, “Why would, why would Chris Sands Pro-Fi 20/20to partner with PDA?” And, and you have been coming to our PDA conferences. We work closely together, uh, you know, with clients. And it’s really exciting when, when a bit of synergy comes together. So I thought I would invite you onto the podcast and, uh, and, you know, teach our listeners about how, what sets you apart from other, from other CPAs and why we enjoy working together so much with, with our clients who we, we jointly adore. So welcome Chris to, uh, everyday Practices Dental podcast. 

[00:02:00] Chris Sands: Thank you Reagan. I am super thrilled to join you. Excited to be here. I get to watch all of your other fantastic, exciting podcasts. I was like, when’s my turn? So I’m so glad you’ve invited me to join.

[00:02:12] Regan Robertson: This is so, and, and I love that you’re in the new year too. So I, I, uh, if you’re not watching on video, everybody, Chris is coming from a v it looks like a news desk and, uh, it’s, it’s not a little, it’s not a little home office anymore. You’ve really, you’ve really expanded your, your, uh, visuals, I would say, and I’ve always loved your message. So tell listeners a little bit about yourself and, and ProFi 2020. What, what, um, you know, tell me about the services you providing, most importantly, the problems that you’re solving right now.

[00:02:42] Chris Sands: Yeah, so this is our, our new studio that we’ve, uh, launched here in our headquarters office. Uh, ProFi 2020 is located, physically headquartered in, in Atlanta, Georgia, but we serve close to 680 dental practices, uh, in 43 states at the moment. Um, I would say, you know, you asked the question, what makes us different or what, you know, what is ProFi. ProFi was really, um, it was not created for dentists. It was really an after an experiment after me having worked in a dental practice through frustration and firing a dental CPA every year for three years, oh man. Couldn’t find in the marketplace what I felt like we needed as the, the entrepreneurial, um, you know, for the practice owner that I was working with and decided to, decided to build it.

[00:03:36] Regan Robertson: Wow. What were some of those frustrations that you were experiencing in the practice when you were engaging with different CPAs?

[00:03:43] Chris Sands: Frustration number one, and kinda the first pillar that made us, that we created when we started this firm was not receiving financials timely. So I think we all believe, of course, believe like innately that we’re gonna sign up and work with a, a bookkeeper or accountant, a CP, a tax advisor, and that we’re gonna get those financials on a, on a regular basis and we’re gonna maybe have discussions around them. That’s what we all want. That’s what we all need, I think but it’s not what, what what you get out there in most cases. So, um, we, I.

[00:04:17] Regan Robertson: I was gonna say, I walked a doctor a few years ago. It was, um, she was in, in actual tears and, uh, yeah, she was crumpled in a corner at, at an, some, it was an event outta state, I think and, uh, anyway, she said that she got her financial statements once a quarter printed out, and she was so embarrassed. It was like in a manila folder. It was, she was so embarrassed. She just put it in a filing cabinet and didn’t even look at it and she just felt like, and she was producing over two ayear and couldn’t figure out where the heck it was going. Did not have anything at the end of the day. Um, so I hear you with frustration number one. Okay, so what was your other frustrations you were personally experiencing during this exploratory time in your life?

[00:04:59] Chris Sands: Well, on that frustration, number one, we made, we made it a pillar. We, it was a company guarantee that we have, that we deliver financials to all of our clients by the 15th of the following month, or they’re free. Okay. So I think that should be a demand of any practice and really, and I would say that, you know, for serious accounting, I have, I have this saying that accounting doesn’t matter really until it matters and when it matters is when there’s gonna be a significant exchange of money. And that can be when you sell your business, that can be, or you’re, you’re bringing on an associate or partner. That can be when you’re asking for financing but the highest frequency is every year when you file and pay taxes. The accounting is what, what is what? Basically creates the tax return and, and helps, helps you see the tax picture and that doesn’t really matter if you don’t have a huge tax liability. So for smaller practices, serious accounting may not be that important. I would tell you that in my experience, really after you get over a million, but maybe even 1.5 million is a point where I would demand monthly financials because your, your tax burden is being created, you know, each and every month. It’s a compound effect. So that was the first pillar. The second pillar problem that we, that I wanted to solve was after I did receive the financials, I requested a phone call to have them explain to me, and I asked questions to get some business advice. What could I change in this business, in this practice to to grow it? I found a few things. Number one was that we were working with dental CPAs who worked with a lot of dental practices, but they just did the accounting for a lot of dental practices. I was working in the dental practice on the practice management side, and we weren’t speaking the same language. They couldn’t gimme any advice of what to actually go and change in the, in the business, uhm, and that’s the piece I think also everybody wants, you know, they want, they want to think they’re working within a business advisor that can help them make some changes in the business, but do they know dentistry, okay, specifically? So they may just be targeting dentistry as the one one niche market. And that, and that is valuable. I mean, I really think of anybody who’s in that niche market, and I think of our company more than just an accounting company. I think of it like a data company.

[00:07:13] Regan Robertson: Yes.

[00:07:14] Chris Sands: How can we use that data across multiple practices to see what the more successful ones are doing, what they’re using? You know, it’s easy to see what vendors you use, what marketing companies, what co co coaches and consultants. Um, but then you really have to get into. You know, okay. If you, are you spending enough in marketing? This is just an example. Are you spending enough marketing? How many new patients a month are you getting? Do you know the metric for that? And, uh, if you’re not, are you listening to your phone, your phones, how your phones are being answered? The accountants I used to work with would’ve never thought

[00:07:50] Regan Robertson: I was gonna say those are high end strategy questions and it’s starting to put context like in a way that I haven’t heard it before, Chris. That makes sense. That bridges the gap for me, from someone looking at it from a traditional CPA standpoint, when you put it like that, like it’s just a line item. Like they don’t maybe take, I don’t know if I’m, I don’t wanna put words in your mouth, but they weren’t bridging that gap between this is what you’re spending money on. What is the return you’re getting for this particular investment or where are your benchmarks in, in marketing, for example? Um, sounds like they weren’t asking those questions that would lead to high-end strategy consultation.

[00:08:25] Chris Sands: That’s right. That’s right. So basically what we’ve kind of formed. Is, you know, we have a little over 40 total accountants in our firm, and I won’t tell you that they all know the business of dentistry, but we have the ones who are advisors, client facing. It’s my job to teach them kind of the business of dentistry. It’s my job to teach them some of those metrics. It’s my job to, we meet as a team every week and talk about our clients and when, when they’re sbout to have a, have a coaching call with a client to go over their financials and a metric is outta whack. I have to teach them kind of the symptoms so that we see the financial, yes, I have to teach them what, what possible causes in the business of dentistry are creating those symptoms and we have to get the doctor, the owner, to go back and investigate those causes and come back to us with their findings and sometimes we’re recommending a change. So you mentioned quarterly financials. I, I, I do believe at a certain size you have to have monthly financials, but I think you need to have minimum quarterly calls with the accountant. Some people want monthly calls, but they can’t get enough done. They can’t affect enough change in one month time. 

[00:09:34] Regan Robertson: Sure, yeah. So that was, so you were, I love how you were being your own hero, essentially, which some of the best companies ever are created by having that frustration and saying, I’m gonna go in and I’m gonna, and I’m going to solve for this. So how many years has Profi been in business and, and in addition to that particular problem, what other, what other exciting, um, you know, opportunities, uh, have, has Profi been able to find and, and help doctors with?

[00:09:59] Chris Sands: So my, my personal experience starting working in a dental practice began in 2010. We did not found ProFi until 2017.

[00:10:09] Regan Robertson: So you had a, you had a good chunk of time to get real frustrated.

[00:10:13] Chris Sands: Well, I mean, it kind of came, it kind of came to a head where it’s like, you know what? We haven’t, we’ve been beating our heads against the wall for a long time. There doesn’t seem to be this solution in the marketplace, it was not offered, I saw it as a void and, um, we, we figured, you know what? Let’s go out and build it ourselves.

[00:10:30] Regan Robertson: That’s phenomenal. You know what PDA, we have several different, uh, you know, alliance partner that work in, in the financial space in one way or another. So we have dentist advisors, which, which gives, you know, financial advisory. We have, uh, Howard Polanski with financially led, he looks at debt reduction specifically. Uh, and we have you, we have profile 2020. So from, um, and explain it like I’m five years old sort of standpoint. How I know you’re familiar with, with all the entities here. Um, how, how does it all work together to serve because we’re, you know, at, at PDA, if you’ve ever been to a PDA conference listening, you, you would know we’re all about optimizing your practice. And when we say, I think it’s cheesy, but when we say work smarter, not harder, it’s really understanding, um from a fundamental standpoint, how to run your business and then how to communicate with your patients so that you can do that dentistry that you have put so much of your own effort and time into and, and that means looking at finances from different perspective points. It’s not one, one company fits all wach one does something a little bit different. So can you, from your perspective, kind of, um, you know, talk to us about that.

[00:11:40] Chris Sands: I would say, you know, in one word, the, the thing that should link us together, um, in working with a, any kind of coaching company like yours, uh, that’s different from working with a lot of, uh, uh, other accounting firms. That word is growth. Um, it’s one of our core values. I have found that many accountants are not growth oriented,uh, both for themselves in their business, uh, and in the advice that they give. So they, accountants do love, they wanna be loved, and they think that one, they

[00:12:09] Regan Robertson: They d0? They wanna be loved? I don’t think I’ve ever heard that before.

[00:12:15] Chris Sands: I think, you know, well, dentists wanna be loved as well. Right. You know, it’s, it’s, it’s, it’s one of those hard professions where you don’t, they don’t get a lot of love out there in dentistry or in accounting.

[00:12:24] Regan Robertson: True.

[00:12:24] Chris Sands: Um. They, they feel one of the ways that they feel loved or they think that they’re bringing good advice to someone is to, you know, if their job is to help you be more profitable, they’re looking at what expenses can they cost. And yeah. We have this kind of funny saying, and this applies both to accountants and dentists, is that they tend to know the cost of everything and the value of nothing. Um, and so they look at. Every line item that that is reported on a profit and loss statement is reported as an expense. So they look at them all as expenses, but some of those things are investments. They bring a return, and two things that are, are on that expense report that are, can be great investments are your marketing and your, your growth consulting, your coaching and accountants can be very adversarial to those two things. It, it was certainly the advice that we received was, you know, why don’t you spend less in marketing? Mm-hmm. Uh, typical dental CPA and, and the, the industry average. I hate averages ’cause I don’t wanna be average. I don’t wanna work with average people. They will tell you these industry averages and in private practice, you should be doing 2% or less into marketing. Meanwhile, the DSOs are reinvesting six to 8% of their revenues into marketing. They don’t have. 

[00:13:42] Regan Robertson: Are we shiftingthat now? Is that, is that the new numbers in? That’s fascinating.

[00:13:46] Chris Sands: That’s, that’s been around for a while and continue to be the case because they, you know, they have a revolving back door. They don’t have the retention, that private practice. Sure, but, you know, private practices are not inviting enough people to the party. So we’re trying to get any practice we work with to be in that, you know, three to 5% of revenue reinvestment and there’s a lot more that’s tied to why that number is what it is but the second piece is, is the. You know, I, I tell every business owner, hopefully you, you have enough margin that you can leave 10% of your margin, 10% of your, your total revenue as profit as margin in your business for marketing, hiring and training.

[00:14:28] Regan Robertson: Oh, yeah. Oh, absolutely. Oh, yes. Keep going.

[00:14:31] Chris Sands: Right? So, um, but. You know, these are small business owners. They sometimes use the business like their own personal piggy bank, or they’re their own boss. They’re still just doing all the dentistry. Any money that they do make, they’re taking it all outta the business, almost sucking it dry funding their own lifestyle, and they’re not thinking of it as an asset to reinvest in and to grow and to do clinically, you know, hire to clinically duplicate themselves, to scale this, to make it something that’s really sellable and a business instead of a practice. Because a practice requires you to be there, a business does not. So I think people have to go through that kind of evolution themselves to get to a point where they, they want freedom and they, they, they decide, okay, I really need to get beyond just me being the one in the chair producing.  A coaching component. Is one of the things I believe ’cause coaching training is necessary. You know, they, they spend a lot of time training clinically, the, the doctors, maybe their assistants, um, you know, doing clinical ce, but they don’t spend enough time training the, the nonclinical team, the, which is the gatekeeper, you know, that starts the whole process and maybe on the backside collects all the money. Uh, so anyway, the accountants can be very quick, quick to say, “Hey, I’ve got a couple ideas to, you know, help you be more profitable. It looks like you’re doing well. You know, let’s, let’s, let’s cut back on some of the marketing,” and, “Um, wow. I can’t believe you spend so much with that, that coaching. What are you, what are you really getting?” You know, and you have to look at. The growth, and this is where this is, I, I’ll tie it all together. Your question. There are plenty of coaches, there are plenty of CPAs, and they don’t work very well together. Mm-hmm. They’re, they’re actually actually trying to fire each other. In many cases, they’re adversarial and as on the coaching side, for, for you guys like a PDA, you have to have some sort of financial proof to validate what you’ve done and this has been my experience in in working with dental clients through over the years is you can, you can install something that dramatically and financially changes their, their business, their financial life, their outcome with taxes. and they will not give you credit for it or they will give you credit for it when you first do it and they will assume the credit for it and it’ always a you know, what have you got for me now? What have you done for me lately? You know, what’s the next thing? And if you don’t have the next thing they wanna move on,  and they think that they’ve, they’ve created it, they’ve got it in place, and then they’ll just, you know, cut it out. They’ll stop it. It’s, it’s, it’s weird. As human beings, we, we tend to, uh, once something works, we tend to quit it. It’s, it’s very, it’s very strange. Like once, once something starts working mm-hmm. Mm-hmm. We tend to quit it.

[00:17:21] Regan Robertson: I call, I say going back to the fundamentals, but you’re right. You’re, I what, what pops to my head was, um, growth-minded discipline and discipline and consistency is very sexy, but it is very mundane, so you have to almost shift your perspective. I know Bruce and Victoria were really great, uh, in my early education at PDA, helping me think from a growth mindset, meaning say top line production, and then a bottom line team as I would, you know, as I would say, that’s your risk mitigation and so it is an, it can be a natural place of oil and water if they don’t have a strong relationship and an understanding because your risk mitigators are going to do exactly that. They’re just going to look at cuts and, and it’s a shame. It is a shame and I think it is very unjust to have anyone looking at finances and not putting any story because you know very well that, that the numbers do tell a story and you’re going under the surface and asking the question why and it makes sense to me because your core value being growth is going to give way to say there, there should be times when you do make the investment, when you do calculate the value and you should take risks and, and seeing that entire picture. Is part of that process. So if a doctor is to come to profile, what does that process look like, uh, over the, the first few months? Like what, what do you, what does profile go in and, and help the doctor understand?

[00:18:44] Chris Sands: Uh, so first we actually do a review of the last three years of history to talk about where you’ve come from to task, you know, so we see the, the hard data, the financials to, um. Tell us a story, but then we ask the story behind that. What, what has contributed either to your growth or your decline, or, and, and why did the profit change? Uh, then the next step is the accounting is kind of like the hygiene to tax. So you gotta come through and get a cleaning first. You gotta clean up the amount, you know, get a, get a, a nice clean x-ray and put it into a dental chart of accounts and talk about. What might be off, what are some of the levers that we can pull in the business that will offset another lever and, and have that show up financially?

[00:19:32] Regan Robertson: Do you need a deep cleaning? How, how bad does it, how, how, how deep do we go here? Yeah.

[00:19:37] Chris Sands: Uh, the majority of what we do, so what we, what we call onboarding is like, is like the hygiene process. Um, we have to, anytime we pick up somebody’s finances or we pick up their accounting leading to their tax returns, it’s kinda like the same time same as when a dentist, uh, touches a tooth no matter what’s been done or who did the work on, on that tooth before you touching it. As soon as you touch it, you assume the liability of it and so same for us. So no matter what time of year that we take over a new client, we have to go through the accounting all the way back to January 1st and make sure that it’s, uh, accurate, it’s correct and the same time we’ve got to start downloading transactions and coding and keeping, keeping the file current, uh, whenever we pick it up. So our onboarding, we’d say we like to have it be 60 days or less. That’s dependent on how, how clean it currently is. It’s dependent on how, um, engaged, involved and, and responsive and communication the, uh, the doctor is, um, but if it’s, if it’s a huge mess and there’s a lot of it out there in, in, in dental,

[00:20:46] Regan Robertson: So no judgment. So we listen, but we don’t judge guys. It’s okay if it’s a mess. That’s, that’s

[00:20:52] Chris Sands: An awareness. I think it’s more of an, it’s not judgmental, but there’s a lot of, it’s a big mess out there in, in the, uh, dental world in terms of looking at business financials. Uh, and if sometimes they need an SRP and it can take, you know, 90 days or more. So it, every, every case is unique. It just depends.

[00:21:13] Regan Robertson: I think, you know, and fear comes from the unknown. So it’s, it, I love the, uh, the tie between a dental visit and a financial visit to it. It can be scary. It can be something like the woman that, that threw the financials into her filing cabinet and just didn’t want to look and that to me is the, the biggest disservice that you can do. So having someone that that’s been there that understands the frustration that can hold you through that process, um, you know, I mean, where are the doctors, you know, um, that, that come to you? Say, pick one in your head, maybe your favorite train wreck of all that came to you and you thought, I dunno how we’re gonna get through this and you were able to do that. What were some, some of the behaviors and some of the key characteristics that you saw popping up throughout that story for them?

[00:21:58] Chris Sands: Well, what, what creates a huge mess, um, is actually the, the management of cash flow and how, and especially if there are multiple locations, um, and having, having a clean paper trail from one entity to another. Um, so once you’re a business owner and you kind of have control over all of this, it becomes the wild, wild west. You have, you have all kinds of online bank accounts, maybe for multiple different practices, and you need to pay for things and you’ll pull money from wherever you have it and so they will pull money, different practices, take it over to the others. What they don’t necessarily realize is that each, each entity has a tax calculation, something called a tax basis that can be affected when you do that. So every, every time a dollar needs to go to one of the other companies, it traditionally needs to either come home to the owner first and then they personally deposit it into the other company or they need to have like a management company that they can push money up to, but there’s this crazy intercompany movement of cash, which is causing a lot of tax issues for these entities. So they can’t always, uh, depreciate equipment if they’ve messed up their tax bases. They can’t always take distributions in an S-corp if they’ve messed up their tax bases and that’s something that’s, I found was rarely, if ever, almost never discussed by the CPAs to these dental business owners because they felt like they, they either couldn’t understand it or didn’t really matter, and they would sweep things under the rug. They would do some journal entries. There’s this, I would say this, um, terrible problem in dentistry that a lot of, a lot of them don’t know is they have a loan to shareholder balance. Okay, and this is getting a little bit too technical here, but

[00:23:48] Regan Robertson: No, go down in the weeds.

[00:23:50] Chris Sands: Yeah, so there, there’s this, you know, in accounting you can’t technically have a negative tax basis, but you can kind of journal it over there as a, it’s a loan. Okay, so the business owner either took out too much money beyond their tax basis, which they’re supposed to normally. Have to pay like a extra capital gains tax on, extra 20%. The CPAs, again, wanting to be loved, they don’t wanna deliver that bad news at the end of the year. They don’t wanna explain, right? So they just do this journal entry to something called loan to shareholder and that’s something that can affect you in the future when you sell your business. It’s also a trigger for audit. Um. It is so common in dentistry. I would say that if I’m, if I meet a doctor that’s in their fifties or or older and, and I just look at their tax returns that for their practice, there’s probably an 80% likelihood they have a loan to shareholder balance and I’m, I see them anywhere from three to 400,000 range and that’s, I mentioned the audit risk. I mean, if they get selected for audit, the IRS will overturn that and say it’s all, it’s all wages and you have to pay us ordinary income taxes, penalties, and interest. So,

[00:25:03] Regan Robertson: But that’s a huge area of, of where there’s, there’s ignorance in this and I, and I have a philosophy question for you also. I would love for you to be my eyes and ears on most of the dentists that you serve with us. So if the CPA is putting that in there, uh, uh, maybe that makes the, the, the CPA tell a good story, but that does give implications that, are they even aware of that?

[00:25:22] Chris Sands: I would say eight or nine times outta 10 when we do consults and we reveal that to someone, they’ve never talked about it before. They don’t understand what it is. They’ve never heard of it.

[00:25:32] Regan Robertson: See, I would be so unbelievably frustrated and so my next question for you when this is around philosophy. So, uh, I I, I, I am not a finance major of any, any state ever, I, I follow the most, I would say the basic profit first. Um, Donald Miller’s cashflow made simple. Dave Ramsey. Very, very fundamentally basic way of looking at accounts and separating them out. What, what is the philosophy that you see is pervasive, um, that accounts for, for things like this that people just don’t know until they, nobody wants to be hit with that, you know, at when they’re going over, oh, I, I owe this much in taxes. That’s the worst feeling ever and then how do you prevent that? So kind of what is the philosophy that you see and is there any shift occurring or, you know, I, I believe you’re being that shift, um, as well and providing a different solution.

[00:26:22] Chris Sands: You know, our name ProFi has multiple different meanings, but the, the, the foundational was a play on the word prophy. You know, it is preventative. Oh,

[00:26:30] Regan Robertson: I didn’t even think about that. Of course,

[00:26:33] Chris Sands: cheesy preventative care and high frequency, you know, of, of, of visits or care will lead to better overall financial health. Brilliant business and you know, just like. You need to go to the dentist at least twice a year. Uh, you need to meet with your CPA at least twice a year, but we want you to, you know, the hygiene to be performed on your books very regularly and being educated on how the tax picture gets generated proactively. You know, we, we live by the 40% tax rule. I can, I can do tax planning with anyone if I have their financials from their business. I can pretty much do tax planning with anyone and I’m not an accountant, not a CPA. Just living by the 40% tax rule and so, you know, first question or first thing to educate on the big, the big surprise, you know, like everybody feels like they get a tax surprise at the end of the year. It’s only a surprise if you weren’t meeting about it and, and discussing, you know, how’s it being generated and what’s it gonna be? Maybe some people think they, they’re gonna pay zero taxes every year. Uh, that’s not the case but the um. The way that it’s not a surprise is that you owe 40% tax on two things outta your business. If you’re, if you’re in a business like an S Corp where you can take a salary, you owe tax on that salary that’s likely been withheld through the payroll, and we typically don’t have to worry about that but for every other business, you owe tax on the profit, whether you take it home or not and so that profit is at the bottom of that p and l and that p and l, that profit and loss statement is what is page one of the tax return. It’s not this mythical thing about how your tax gets generated and if you over prepare by living by the 40% tax rule. A lot of what we do in preventatively, getting away from those tax surprises, those tax surprises, which, you know, create cashflow problems. The, the way that we act, actually solve for that is not through accounting. Accounting gives us the data, but it’s through cashflow management, some of what you described. So we’re a profit first certified firm. I wholeheartedly believe in that philosophy. I’ve expanded it beyond just the five main accounts and beyond moving percentages into something we call daily transfers for a single location practice, we use about nine bank accounts. That sounds crazy when you get started, you know, you tell that to your banker, they’re gonna look, look at you like you have a third eye, but, they’re all very purposeful and intentional, and it organizes the money. It’s like flossing your finances daily, okay? So that the financial bacteria of expenses don’t cause any financial decay in your business, like requiring you to take out debt or for you to owe taxes and be behind. But a big, big part of what we do, major, major big part of what we do is education. Okay, so educating and how did it, how does it get generated? Then you can talk about some of the possible things you can do to, you know, mitigate or lower your taxes.

[00:29:38] Regan Robertson: So that was one of the beautiful questions you kinda asked as an an assessment tool. For, for those of you, you know, that are listening, I can tell you in my own personal finances over my professional career, um, simplifying to that and, and it does sound crazy at first to have multiple bank accounts for multiple reasons, but if you, uh, you know, when you talk about muddying, where, where you’re applying, where you’re paying things, especially with the explosion of small group practices, so it’s, it’s not the DSOs that have 600 practices under the belt. There’s a lot that have. 2, 3, 4 or five practices, and I can see from your stories just how easy that can get confusing so fast and um, in areas of our life, when we talk about working smarter or not harder, it’s, it’s about being able to contextually shift quickly. So follow me here. So if you have bank accounts that are diversified, they have specific purposes for them, you don’t have to think so hard. You know what’s gonna go where and what’s allocated to where. So one question you just asked me in my health assessment from a practice standpoint would be, am I prepared? Like it’s the end of the year, did I prepare several times? Did I meet with my CPAs? And I’m not gonna have a surprise. So question number one, I’m not gonna be surprised. What other questions do you think, uh, doctors should be asking themselves? And if that answer is no, you know, uh, perhaps they’re, they’re not as prepared as they think they should be.

[00:31:01] Chris Sands: Hmm. Well, the meeting with the CPA yes is a, is a key part. Um, the movement of the money and the cash on a high frequency day, I, you know, preferably daily basis that that sets, that creates a mindset each and every day as you go into the business. Um, the, the way that you think about, um, how you withhold those taxes, I think is important. So there should definitely be a tax account in the business, and you should pay your taxes to the IRS out of that account in your business that’s one thing that, you know, one way the CPA can actually see that you pay, you made those payments. I think that’s a, a missing piece. A lot of people take all this money home, they, the CPA cannot see what you have in your personal accounts.

[00:31:46] Regan Robertson: Oh, right.

[00:31:48] Chris Sands: And so they, they might make a payment from their personal account. They have to notify the CPA and give them some sort of transaction, you know, documentation. But a lot of times they forget, or the CPA will ask, “Hey, remember I told you to make those quarterly payments? Did you make ’em?” They’ll say, “Yeah, yeah, I made ’em when they didn’t.”

[00:32:04] Regan Robertson: Oh, no,

[00:32:05] Chris Sands: they will submit the tax return showing or assuming that they made that payment. The IRS doesn’t have any, any receipt of that payment. The finger gets pointed back to the CPA. Oh, you messed up. So there’s, you know, in best practices and how to get the most out of your accounting relationship and not have, have those kind of mistakes. Um, filter the tax. So no gross money, no pre-tax money should ever hit your personal bank account. You know, so if you take $10,000 out of the business, filter, 40% tax, $4,000 into the tax account in your business, it only takes 6,000 home. Save, spend, invest, do whatever you want. That other 4,000, the tax account, you would do that process every month, uh, for three months and just let it accumulate and then you could empty the tax account to the IRS and, and you could do that the first three quarters of the year. I actually am playing a game against the CPAs and trying to beat them. Clients like sometimes overpay in their taxes the first three quarters by just behaviorally making sure they’re withholding 40% of every, you know, distribution they take. Empty that account wven if the amount the CPA said to pay was less in the fourth quarter, if we do that. Whatever’s in your tax account in the fourth quarter, you’re likely gonna owe a less of a last payment, uh, or possibly nothing depending on how your year turned out and you get to take all that tax money home as a nice little surprise, you know, bonus,

[00:33:34] Regan Robertson: I was gonna, I was gonna go back to the over preparing because I love this. It’s. Somebody myself who has, has love, I love to spend right? Love to spend that over preparing. You can make this game fun. You can, your future self will 100%. Thank you. It it, it helps you with that behavioral mindset shift. So if you, if you just set your rule in your head, I’m, I’m just gonna contribute this much to this account and, and I’m gonna do it consistently. I’m not gonna wait and I over prepare. You get a delight at the end of the year and you’re tired at the end of the year. You wanna have time with holiday family. You don’t wanna be stressed out. That is one of the best ways, I think, to be excited and thankful and boy, you will love your CPA for that too. I, I know that when I over prepare, I’m so delighted and happy. Nobody ever wants to get hit with, “Oops. I owe a ton of money ever.” So it’s, it’s a really nice way to sort of force yourself, I think, um, and shift your mindset.

[00:34:28] Chris Sands: A good coaching relationship and a good accounting relationship are really what we’re talking about here today, Regan, which are. We’re in the same business. Yeah, we, you might do, you might do, you know, practice management, dental coaching. We might do accounting, but the true business we’re in is human behavior modification and it’s, it’s, you know, financial behavior modification. Um, that’s actually the key. So it’s not just finding the right coach, just finding the right accounting relationship is not, is not the full gig. I mean, it really does take. You as a person, you as the, the doctor owner. Not only imp listening and implementing some of what you’re taught, but it, it’s a consistent, redundant, you know, behavior that, that that changes your outcome. You know, so that’s.

[00:35:14] Regan Robertson: So let’s talk this. I agree. All I can think of is the donut story. You know, you put the donut on the table and you walk away who’s going to eat it and who’s gonna wait the appropriate time? Like that, get that, pull out, that dopamine and that’s, that’s the piece of that too. I think of everything in dopamine hits. How do we stimulate that primal brain? Talk to us a little bit about why, uh, you come to the PDA conference and what it is about the dentist that, that come to PDA events, um, that you’ve worked with over the years. What’s, what’s, um, you know, what’s exciting to you about that and, and what’s, um, you know, what makes you come back year after year?

[00:35:49] Chris Sands: I’ll go back to that core value of growth. I just, uh, you know, there’s a saying, if you’re not growing, you’re dying and when, when if, if our business isn’t growing, I know that I kind of get depressed. I’m like, you know, that’s, that’s where I live. I live in the future and, and the goal setting and I think it takes a certain level, maybe a certain, uh, uh, experience level before any small business owner, particularly in dentistry though, decides that to take on, um, you know, take, take, take it by the, by the reins and really say, “Okay, I want to grow this thing,” and of the general dentist, four of them are, are associates and they can’t see their schedule, or if you ask them, “Hey. Are you scheduled every day to your number next week, or do you know how much, how much production you have on your, your books next week?” They don’t, they don’t have ownership of that yet. It’s not, it’s not a muscle that they’ve learned how to train.

[00:36:43] Regan Robertson: Oh, yes. If you take a visual, I, I, I thank you. If you take a visual of a hub and a spoke, okay? And so at the end of the spoke, it represents a level 10. That’s your expertise level, and I want you to cut it up into eight different ways, right? So you’ve got this wheel, and this wheel circle hasn’t been drawn yet down in the middle towards the hub, that’s where you’re least experienced. When I look at so many doctors, they are so passionate about dentistry itself, that they’re clinical. You can put way up on the board, right? Depending on how many years and how many advanced courses you take but let’s say, put that at an eight, and then you look at the other elements of the business itself. So you put communication with patients and you write in where you’re at from one to 10, the business elements of it, the financial accounting, the insurance, the administration, the hygiene, and you start to draw an, okay, I know from one to 10, this is where I sit. Typically, you have a pretty chunky wheel that’s not gonna get you very far and I think you’ve done a really beautiful example of explaining how you help educate and guide dentists so that they can fill out those other pieces of the wheel and may and, and why PDA am profile 2020 work so well together because we have the understanding that, that it is, it is behavioral modification and it is doing that with the mindset that your future self will be so much less stressed. You know, we, I have to write marketing copy all the time and I always say decrease stress how? To me, this is how going in with, with no blinders on, having a clear picture with somebody who can say, I’ve been there in your shoes. I got super frustrated in a dental practice and that’s exactly why I created this organization to help you, uh, you know, increase your, your proficiency.

[00:38:25] Chris Sands: I couldn’t agree more. It’s, it’s beyond just doctor growth. It’s, it’s to be a better entrepreneur, you know? And business ownership is not a, it’s not a a right or an entitlement. You know, you’re very fortunate if you get to you own one. And the question is, you know, what are you gonna do with it? It’s, it can be an asset that is, that you can grow and is worth something. Um, but it has to be that you want to grow beyond just being your own boss. You know, and not, and not just, uh, beyond just your own production ’cause. So I am in the pursuit, I think like many people of, of this, this buzzword of financial freedom and it first begins in your business, uh, or changing it, you know, again, from a practice which requires you to be there to a business which does not and not everybody’s at that le at that, uh, level of mindset yet and I think it takes a little bit of time and so we’re the best fit and you know, if, if we’re in alignment, if I’m in pursuit of that and the people I’m working with are in pursuit of that, we’re, we’re in the best fit and I, I look for where do those people go for their information? And PDA is one of the great places I’ve found, and, and actually, you know, we get to look under the hood, right, of all the practice that you work with and I’ll give a shout out that, um, you know, I, I see practices of all different kinds and, and working with different coaches, uh, the practices, working with PDA, by far are the most profitable. Mm. Okay. Um, and, and they still, each one has different things that they have to work on, but by and large, they’re the most profitable and I think that begins with, uh, again, learning how to schedule to the number that, that, that’s kind of your y’all’s introductory point that I’ve seen with Dr. Baird is just a game changer.

[00:40:11] Regan Robertson: Um, Dr. Ian said it best, I think I’ve mentioned it in another, uh, podcast episode. He gave us a, a five star review on Google and, and he said, you know, I, I held off for so long, I’m just paraphrasing but it was basically the sentiment of it was I held off because I just thought it was, you know, faster fillings and working harder and it is the complete opposite of that. And I think there’s always the two sides of the coin. Being profitable is great. You, you have to be, to have a thriving future and to feel great, but when you can do that and provide better patient care along the way and care for your team. You just are winning across the board and I do think that that’s rare, and I think it takes intention. I think it takes, uh, business owners that are, you are right. It, it growth mindset’s probably what you would put on paper but there is just a deep sense of, of servant leadership to not just the community but but to themselves and creating that longevity. It’s, it’s gorgeous and, and I’m thrilled. I too, when I hear associates, I hold my breath doctors as individual contributors, you know, they can actually end up growing really, really well in their own practice and then they make that switch and say, “Okay, I’m ready now,” and I always wanna hold their hand. I’m gonna say, let me hold your, my hand. You know your hand while I tell you this. When you do that, you are transferring knowledge, and then that’s the other side of the piece. So you’re, you’re. Your puzzle gets more complex, but when you surround yourself with the right guidance, it can be, it can be an, uh, a less painful experience, and it can give you great results. Philosophy, alignment is so important and doctor, if you’re listening right now, thinking about the external groups that you work with, philosophy alignment is really, really important. We can’t say it enough. So if you are growth-minded and, and, and wanna decrease your stress by being prepared financially in, in a way that can be fun and sexy and rewarding. I promise you, reaching out to Chris is also a great option. How can people get in touch with you and your organization? 

[00:42:00] Chris Sands: You can check us out online @ profi2020.com, P-R-O-F-I 2 0 2 0.com, and you can find us on all forms of social media at ProFi 2020.

[00:42:11] Regan Robertson: And are you. Are you gonna announce? Are you kicking off a new podcast?Are you ready to announce that publicly? 

[00:42:17] Chris Sands: not quite ready to announce it, but I will say yes. We are kicking off a new podcast here in 20 25, 1 that we’re revamping from several years ago, uh, with a new name, new brand, and new concept. And I will be inviting you back, Reagan to

[00:42:32] Regan Robertson: I’m Awesome. Excellent. Well, I look forward to that and we’ll keep an eye on it and announce it when it goes live. Thank you for your time today, Chris.

[00:42:39] Chris Sands: Thank you, Regan. Thanks so much,

[00:42:42] Regan Robertson: Doctor, whether you’re leading a single location practice or growing a small group, the insights Chris shared today offers a refreshing and often overlooked approach to financial leadership. If you wanna learn more, head over to profi2020.com or follow ProFi 2020 on your favorite social media platform and of course, if you love this episode, it would mean so much to us if you would hit subscribe. Share it with your dental colleagues and leave us a review. We appreciate you being part of our Everyday Practices community.