Why monitoring daily cash balances—and understanding seasonal fluctuations—is the ultimate financial safeguard for your orthodontic practice.
By Roger P. Levin, DDS
Regardless of what happens in the increasingly competitive world of orthodontics, if you have cash, your practice will be fine. Orthodontists should know the exact amount of cash available in their practice every day. This simple, two-second daily exercise helps quickly identify any downward trends. For example, many orthodontic practices maintain excellent cash flow due to existing patient payment plans, masking a slowdown in new patient starts. Without daily attention, these underlying issues can eventually catch up with the practice.
Cash represents the liquid funds available to spend right now. Whether used for operational expenses, income, or strategic investments—such as opening a new location, adding or upgrading technology, expanding an office, or hiring a new team member—your available cash determines what your practice can actually afford without accumulating debt.
Cash flow, however, is different. Simply put, you will not have the same amount of money flowing into the practice in January as you will in July. Most orthodontic practices experience seasonal fluctuations, getting busier during the summer months. Consequently, cash flow rises during these peak times as the practice starts more new patients.
Growth eats cash
Growth eats cash because expanding a practice always requires upfront capital before you collect the long-term rewards. There are numerous ways to deploy this cash. Purchasing new technology requires immediate capital, and hiring a team member instantly impacts cash reserves due to recurring payroll commitments. In these expansion scenarios, analyzing cash flow is crucial. Is it better to acquire technology during busier months when patient starts and cash inflows are high, or does your practice maintain enough reserves that timing is irrelevant? Understanding these dynamics is why tracking your cash situation is vital.
If cash declines, take action
A steady decline in cash is one of the clearest indicators that a practice is facing challenges. Checking your cash balance daily prevents you from panicking over minor daily fluctuations. Like the stock market, cash balances will have ups and downs. The key is to focus on the overall trend. While daily tracking is useful, the month-to-month trajectory tells the real story. If you spot a downward trend over a 90-day period, it is time to take action. This might mean auditing overhead expenses, renegotiating supplier contracts, adjusting deposit requirements on patient payment plans, or ramping up internal marketing to boost patient starts.
Cash is king, and maintaining a healthy reserve ensures your practice remains resilient. Having sufficient cash allows you to make strategic purchases, invest in growth, and reward your team with bonuses. Ultimately, strong cash reserves drive performance, serve as a financial engine to help you achieve financial independence, and protect your practice like a fortress. OP
Photo: ID 96619348 © Julia Sudnitskaya | Dreamstime.com
Roger P. Levin, DDS, is the CEO and founder of Levin Group, a leading orthodontic consulting firm that has worked with over 30,000 doctors to increase production. A recognized expert on ortho practice management and marketing, he has written 67 books and over 4,000 articles and regularly presents seminars in the U.S. and around the world. In 2025 Levin received the Fauchard Gold Medal from The Pierre Fauchard Academy for his contribution to dental practice management. To contact Levin or to join the 40,000 dental professionals who receive his Practice Production Tip of the Day, visit levingroup.com or email [email protected]
