85: 10 Questions to Ask Yourself When Reviewing Your Monthly Financial Statements

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Welcome everybody to another episode of the Dental Boardroom podcast. In my last episode, I gave an overview on how to structure your profit and loss statement to teach you a story, to tell you about the economics of your business, and to make good decisions as a business owner. I hope you found it helpful. Well, this episode is a follow up to that one. It's like an addendum. It it is 10 questions to ask yourself when reviewing your financial statements each month. You can write these down and then you can use them as a guide to walk you through the analysis of your profit and loss statement. If your profit and loss statement doesn't give you the information to ask these questions, then you need to talk with your accountant, bookkeeper, or CPA to structure your financial statements to give you an answer for these and ideally give you an answer really at a glance. So you don't have to do a lot of due diligence or analysis or additions, subtractions, et cetera to arrive at an answer to these questions. It should just be stated easily. Now, I love, I love the visuals, I love the bar charts, I love the line graphs. I love comparison of the actual to the budgets or goals that I set. That way it's really easy to not only see how you did for the most recent period, like the most recent month, but really how you're trending over time. And that sometimes is the most valuable observation to make in your practice. Financial trends. Okay, here are the 10 questions. Number one, what were my collections last month year to date, and how do those compare to the same periods last year? And what explains the variation? All right, Now I said 10 questions. You know what, it's actually 10 sort of areas of focus. So that obviously is more than one question, but it's all related in the same sort of main question. What is the health of my collections? And collections is your revenue. And you'll hear people like me oftentimes label that or call that your top line. Your top line is the money that landed in the bank from patients and insurance companies. The bottom line is how much of that is left after all of your overhead. Bottom line, top line. They're both relevant. At the end of the day though, it is the bottom line that takes care of you, that feeds you, that pays your taxes, debt funds your future self, et cetera. So the bottom line matters. I would much rather have a million dollar practice with a bottom line of 400,000 than a $2 million practice with a bottom line of 4 of 400,000. Because in the second scenario I'm probably running a more complicated practice that's probably requiring more of my time. More HR stuff, more operational stuff, more vendors, just more stuff going on than the $1 million practice. And I would prefer to have the same income on, therefore. In other words, I prefer the simpler model for that. 400,000. Now, if I could get 800,000 on the $2 million practice and I'm not working twice as much, I would probably go with the $2 million, $800,000 practice, $2 million collections, $800,000 practice. All right, so this first question, though, what were my collections last month? And if you recall from my explanation of the P and L, it showed one column for the month, the most recent month. Ideally, you're getting these by around the 15th, plus or minus for the month, year to date. So if you're right, now we're in April, so January through March. And how do those two compare to the same period last year? So how did your March compare of this year? 2024, how did that compare to last year? 2023. And how did the first three months of this year compared to the first three months of last year? And what's the variation and why? Why is there a variation? If it's a marginal difference, well, then it doesn't really matter. It's just life is moving forward as normal in your practice. Now, I generally don't care as much about the month. I care more about the year to date because I like to see a longer period of time because that gives me a more reliable indicator of how I'm doing. But if there is a big variation, let's say you're in August and you have financials through July. That's seven months over half the year. If you compare that to the prior year, and let's say you're down by 23%. You want to know why? I know you're feeling it. Your bank account is probably lower, you're taken home, probably less. But you really need to know why. Is it because, I don't know, dental practice opened up down the street and just marketing like crazy. Is there a fallout in some of your staff? Maybe some hygienists have left or associate has left? Why? What's going on here? And that's where you make key decisions that will target getting your collections back up. And let's say you're 23% over last year. I also think that's really important to know why you have an increase in your collections as well. Keep doing whatever you're doing now. In a minute I'm going to get down to what is your profit as well. If your collections went up 23% but your profit stayed the same, that's no good. That right there just means more work for the same income. So that's a different question you're going to ask here, but that's number one. What were my collections last month, year to date? How does that compare to last year, the same period? And why the variation? Are you looking to buy or sell a dental practice? If you're a seller, how do you find a strong list of potential buyers? There's no MLS or Zillow for dental practice sales. In such a fragmented market, with transaction costs so high, many dentists selling their practice feel discouraged. That's why I built Practice Orbit. Practice Orbit is modernizing how dental practices are sold. 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Number two did I reach my goals based break even for the month and am I reaching that goal for the year now? I've talked about this a lot As a financial planner, we, a practice CFO will do personal goal setting with our clients. For example, when do you want to stop working? You may not stop working, but when you want to be able to stop working, that is the day at which we define you are financially independent. You can live off the income from your assets, maybe coupled with some Social Security income in there. But when is the day that you have enough income from stocks, bonds, real estate, etcetera Such that you can stop working if, if you want to. And we define that and then we back in this day to say okay, in order to build those assets, in order to fund that 401k, in order to buy that real estate property, in order to fund the DB plan, et cetera, to fund the IRAs, the Education 529 account for kids in order to meet those goals, how much do you need to collect today each month on average in your practice, such that after overhead, taxes, debt, et cetera, you are on track for that future in the financial independence goal. Now there's no way that you're really going to be able to determine that goals based break even. Let's say that's a, let's say that's 150,000 in monthly collections. There's no way you're going to be able to define that unless you take the deliberate effort and be intentional about this. But the deliberate effort to meet with the financial planner or possibly if you're savvy enough with sort of some free online tools or Excel spreadsheets to run some forecasts, factor in inflation, investment returns, et cetera. Most of my clients would prefer to delegate that one to a financial planner. But you've gotta, you've gotta be intentional about doing that exercise, talking with your spouse if you're married, or just thinking internally if you're not. What is my game plan for financial independence? What do I want my money to accomplish for me in my life such that my life has meaning to it? How do I make sure that my money enhances my happiness and it doesn't eclipse it by creating problems? And so you define this goals based break even. And now you have truly a reason to go into work today. Not just to pay your debt off or to pay yourself today to live, but also to fund that future goal that we all aspire to of financial independence. So what is that financial that goals based break even? And then this second question is reviewing your financial statements and saying am I averaging for the year, am I averaging my goals based break even? And if you are not there, then you gotta make the hard decision to go back to your financial plan and say do I reduce the amount I'm going to live on in retirement or when I'm financially independent? Or do I push out the day that I'm financially independent? So instead of becoming financially independent 55, I push that out to 60. Or maybe I don't fund as much for my kids education or maybe I don't buy as big of a House. But there's, there's these, this interplay between what you're, you're collecting in your practice and your ability to meet those personal financial goals. And sometimes you have to find a middle ground that is realistic, realistic of what you can collect today based on what your goals are for the future. And as long as you have that map, then you are properly motivated to make decisions that will meet your life goals. And you're being intentional about those goals. And you may say no, no, I'm not going to back up my retirement to age 65. I'm not going to back up my age of financial freedom to 65. It is going to be 55 period. If that means I need to grow my collections from $60,000 a month to $120,000 a month, then I'm going to lean in. I'm going to look at marketing, I'm going to look at operations, I'm going to look at the way to do this and I'm going to get my collections up to 120,000amonth because I have that goal and I'm going to make it happen. I'm going to come up with that business plan. So that's up to you. That's a little bit of horse trading I call between your future self and yourself today on what, how hard you want to work, how much you want to spend a day and how much you're capable of saving for that future time. So second question is, did I reach my goals based break even for the month and for the year? Number three, how can I grow my collections? Now here at Practice cfo we are the external chief financial officer. Chief financial officers or CFOs typically don't get involved in the conversation of how do we grow revenue. That's really the CEO, the chief marketing team, the sales and marketing department of these big companies. Well, in a dental office usually you will have a marketing company that you hire to help you grow your collections or, and, or you have a practice management consultant who helps you do that. Now here at Practice cfo we openly and assertively claim we are not practice management consultants. We don't compete with them. However, we'll do some basic things like run a UCR analysis to see where your fees line up. That's easy. And we subscribe to a resource that lets us do that pretty quickly. And we can talk about some basic things around fee for service, run some math around going fee for service, things like that. But in your P and L, as you look at your top line collections, I Do every month want you to ask, how can I increase my collections? The more that you increase your collections, the more you're able to meet those personal financial goals. So ask yourself that. Number four, do any expense categories look too high or too low? If so, reach review the transaction details in the general ledger. What I mean by this is if you're looking at your P and L and you're looking at, like, your dental supplies, and your dental supplies are at 15% of your revenue year to date. So let's say your revenue year to date is a million dollars and you paid $150,000 to Patterson and Shine and the like, that's 15%. Dental supply should be way lower. They should be closer to somewhere around 5 to maybe 7 or 8%. That's where they should be. And now there are variations of that, depending on what type of specialty you are and whatnot. And I talked about this in my last podcast. But you should look at where you are and if any of these categories, like your labor, like your supplies, like your labs, like your admin, if these things are, are too high or too low, but especially if they're too high, then what you want to do is you want to go to the general ledger. What's the general ledger, Wes? Well, I'm the CFO trying to educate you as the CEO. There are certain basic accounting and tax terms that I think every business owner, including dental practice owners, should know. General ledger is one of them. The general ledger is an addendum to your financial statements that shows every transaction, meaning every dollar that hit your income, that your bank account and every expense that came out of your checking account or your credit card account will be listed on your general ledger. For example, if your dental supplies, going back to my example for the year where 150,000. And you go to your general ledger, and you go down to the dental supplies section, you'll see as of January 1st, going through to the end of the most recent month, a list of every payment that was categorized as a supply expense. So every payment that goes to Patterson, every payment that goes to Henry Scheng, Burkard, Nobel, There's a lot more. You all know those. Those all will be listed in that list. And you can see that, okay, it is 150,000. That actually makes sense. That actually makes sense. And now really the decision is, can I bring that down? Because that is remarkably high. Now, if you're at 7 or 8%, I think you're probably good. You can still go check it out. And I do recommend you go down your entire general ledger just to be familiar with the transactions. Make sure your CPA is categorizing them accurately, but always look at where you are overspending. Now, in this example, in this example, it's possible that you bought a new dental chair from Henry Schein. A dental chair is not a supply. But maybe your CPA saw Henry Schein and automatically categorized it to supplies. That should be removed out of supplies. And that should be categorized as what's called a fixed asset, which is an asset that goes on your balance sheet as a, as a thing you own that's worth value that you could sell and then it gets depreciated on your profit and loss statement. It's really important that you make sure that, that these equipment or what are called capital expenditures do not show up as expenses on the P and L directly. Okay? So the only way to know whether your categories are too high or too low is to know what percentage of that expense category it is of your revenue and how that stacks up relative to industry standards. Which goes on to my next question, number five. How were my expense run ratios relative to industry standards? Ask yourself that question. So as you go through those different categories of labor, lab supplies, facility marketing and admin, there should be a target there based on your specialty. If you're an orthodontist, you should know what your expected target is for your labor, for your admin costs, for your facility costs. And you want to compare yourself to what those standards are. And this isn't a I want to compare myself to the Joneses down the street. It's not that. It's not that at all. It's that in your industry there is universally accepted, at least by sort of consultants and CPAs and the like. There is a universally accepted range or budget in these various categories that are indicators or markers of a healthy practice, of a healthy financial structure. Better said. And so your cpa, if you're with a general cpa, they're not going to know this. They're not going to know how much you should be spending on labor as an endodontist. They're just not. You essentially have to go to specialists or you've got to research this online chatgpt could probably help you out. Give that to your CPA and, and then ideally they can build in a report that just does that automatically. Or if your financial statements are structured like I presented in my last podcast, you get those from your CPA and then you can compare it to a separate sort of reference sheet that you have which literally could be a sticky note to compare how you did against the industry standards. So that's, that's one of the most important questions right there that tells you whether or not you have a healthy overhead. Number six, where could I reduce my expenses more? Now, building wealth and creating a strong cash flow out of your practice to fund your personal life is a function of two basic things at the end of the day, your collections and your expenses. Now, most of the time that a doctor is struggling with cash flow, they oftentimes or constantly just don't feel like they have enough. It's usually not because your overhead is too high. It's usually not because you're overpaying your front office or your hygienist. That may be the case, but I would say most of the time it's because you're not getting enough production out of your team and your facility. If you can, say, increase your production from, let's say, a million dollars a year in collections to $1.3 million a year in collections, your overhead is mostly the same. That added 300,000 may come with an extra, let's say, $50,000 of expenses, probably from supplies and labs. And so the extra 250,000 goes straight to your bottom line. So right there in that example, you grew your revenue by 30%, but you probably grew your bottom line profit by 70%. That's the nature of having a business where most of your costs are fixed every month and you only have a few variable costs. So that's why most of the time, the cash flow struggles relate to not getting enough production out of your team. This is where you got to meet with your team, set goals, maybe give a little bit of bonuses if certain goals are met. That's very common. It can be very helpful if done right. And, and using your ops, getting people in a chair, marketing effectively, having a good practice management consultant. You got to get that revenue up because then it's a lot easier to have net cash flow to do a lot of good things with in your life. That said, sometimes your overhead is just too high. I do see that a lot. You may be overpaying your team, not necessarily as a percentage, but most hygienists, let's say in San Diego, are getting paid $63 an hour. If you're paying your hygienist $75 an hour, probably overpaying that hygienist. And are they that good? Are they producing that much? Well, if they're producing 2.5 times what you're paying them, it's probably okay, but you need to dive into those and talk with your CPA or consultant about these expense categories. If you're with Practice CFO in your CFO meetings to really go down the P and L and assess where you might be overpaying.

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Okay, on to number seven. Are my personal fringe benefits all listed where they should be below the operating income. What are these fringe benefits? Sometimes we call them perks. I call them sometimes your slush expenses. But these are the personal expenses that we run through the business and attaching them to the business, even if it's a little aggressive, in order to get the tax deduction. Examples are family, sometimes family wages, like spouse or kids on payroll to get some tax savings or to make additional 401k contributions. A personal travel where while you're traveling you're doing a meeting with a dental friend, calling it a dental travel. Now, as a cpa, my license requires me to say there are rules around all that, what you can deduct and what you can't deduct. But typically we tend to be a little aggressive on that. Same thing with automobiles and meals and those kinds of things. Amazon's, Costco, all of those things, those are called fringe benefits or perks. Those should go below what is called the operating Income and just listen again to my podcast, Fringe from last time to know what the operating income is. But those should all be pushed below so they don't cloud what is the true operating profit of your practice, thereby allowing you to compare yourself to industry health standards as a dental practice. Okay, so are my fringe benefits all listed where they should be? The other thing on that that I will say is a lot of times CPAs are very conservative. You all know my philosophy here at Practice cfo. It's toe the line, don't cross the line, because we have dual mandate, save you in taxes and avoid an IRS audit. And, but a lot of CPAs are very conserved. I'm, I'm definitely much more liberal as a cpa. Hopefully the IRS isn't listening to this podcast, but I'm much more liberal as a CPA on this kind of stuff. A lot of CPAs are just naturally very conservative. It's just in their nature and they want to be very letter of the law. And where it's gray, they would prefer to err on the side of conservatism, which basically means you're going to pay more taxes. So one of the things they do is when they see a payment to, let's say, PF Changs or they see a payment to Amazon, or they see some travel costs or a hotel, they don't classify that as a deductible expense on your profit and loss statement. Instead, they classify that as a draw or a distribution. Because what they're saying is, hey, doc, you should have paid that out of your personal checking account. That's my judgment as your CPA or bookkeeper. And so I'm not going to let you take a tax deduction. I'm going to call that a draw, as if you paid it personally. And draws are never tax deductible. Draws are simply you transferring money from your personal, from your business checking account over to your personal checking account outside of payroll. That's just a draw. And so by classifying a payment to, say, Marriott as a draw, that is treating it as if you took the money out of your business checking account, put it in your personal checking account, and then paid Marriott. And that is not tax deductible. And you may be thinking, as you listen to me, well, I don't want my CPA being the one who has full autonomy to decide how aggressive I am on my taxes. Now, some CPAs are going to be very liberal. They're going to say it's up to you. It's up to you whether you want to call that as a business or personal expense. Other CPAs, they'll fire you as a client. They're just that conservative. So my point here with question number seven is to also, when you, when you check out your general ledger, look at everything that's classified as a draw. Now another term for draw is a distribution. Those are the same thing. It's not a dividend. Sometimes people call it a dividend. Dividend is what comes out of a C corporation. And most of you dentists are not C corporations. You're S corporations. S corporations do not issue dividends. S corporations, simply you. You draw money out of your business checking to put in your personal checking account that is a draw or a distribution. So make sure that there aren't expenses that are business expenses that you should get a tax deduction for. Make sure those are not included in your draw or distribution accounts on your general ledger. So if you get your general ledger every month, which we do here at practice, cfo, go to the draw section or the distribution section, it's usually more near the top and review every single transaction in that list. And if it's truly a business expense that you think should be tax deductible, you gotta go back to your bookkeeper, CPA or accountant and say, hey, reclass that as a deductible expense. Now they may fight you over that. They may want you to write an explanation, which we do. Sometimes if you make a three week trip to Europe and you're trying to deduct $50,000, I'm gonna ask you to write a little explanation for us of how it was business related. That way if the IRS comes in, audits, I, as a CPA with my name on your tax return, I, I could get in trouble. And if I get in trouble, well, guess what? They'll go through all my client list. That's why there's a line I can't cross there. Because I don't want to put all my clients at risk for somebody else's actions. Hopefully you follow me on that. So if it's that egregious or that aggressive, and I feel like you maybe shouldn't do that and you're adamant on doing it, at least I'm going to get a narrative from you. So I have it documented in my records. I'm going to CYA myself a little bit. If you want to, if you want to do what I, what I believe is crossing the line, generally speaking to me, that's not enough for me to break up with the client. We do so much globally for our clients. On the CPA and the personal financial planning side, these are very personal relationships. Usually I just want to get documentation on that. So number seven, make sure that all of your fringe benefits are in the right place on the P and L, I, E below the operating income and that they are not claiming classified as distributions or draws. Number eight, why did my cash balance go up or down? Now, I get this a lot. I get this over the many years. I've got this a lot. Wes, where did my cash go? I made on the bottom of my P and L, it says a hundred thousand dollars. That's a lot. Let me get a more standard example. It says, it says $30,000 of net profit for the month. Why isn't my bank account $30,000 higher? Well, for a lot of reasons, your debt is not tax deductible. So when you make your debt payment, that's not showing up on your P and L. So that's a cash outflow that is not included on your P and L. Now, the interest portion is yes, but not the principal portion. So that many times on the show. Also, if you take a draw or a distribution out of your practice, your cash balance is going to go down and that doesn't show up on your P and L as well. So there's a lot of reasons. Those are just a couple. But there's a lot of reasons why your profit and loss statement is not a cash balance, a cash change statement. So what you have to do is you do look at your P L and of course, if it has a strong income and your cash balance went down for the month, which by the way, you can see on your balance sheet or just your bank statements, then you should ask yourself why. And that's where you should go look at your distributions. You should ask your cpa, why is my cash balance going down when I feel like I'm collecting good income? So that's important. Now, your cpa, if they're good, they could look at your financials, they could look at your general ledger, they can look at your balance sheet, they can look at this stuff and they can then package a story to you explaining why your cash balance went up or down. If you're with practice CFO and we meet every three or four months, we will always do a cash flow forecast and we always explain why your cash is what it is. In fact, you get a monthly report called the CFO analysis, which sort of tracks your cash change over time in a very graphical format, which is helpful all Right, let's now go on to number nine. How much did I pay down on my debt last month? I love that because even though debt is an enhancer when used correctly, because you're using, as they say, other people's money, you're using the bank's money in order to grow your practice. That is, that's generally good debt. Then I'm not opposed to having debt. That said, as a financial planner, it still feels great to see your debt get paid down. It just, it just does. And as opposed to going up now, I understand it's not a perfectly smooth trend year after year after year, because you take out debt to, let's say buy a CAD cam or something like that, or build out another operatory, yada yada. And so it's going to tick back up at the moment that you take out more financing or sometimes you're just so low on cash you take an equity loan. Essentially it's called an equity cash out loan on your practice, sort of like a, like a HELOC on your home where you're just taking cash out of the equity and then you're using that for whatever reasons. That's a debt that will increase your, your, your debt on your balance sheet as well. At practice cfo, we deliver every month a report that will show how your debt is getting paid down over time. And I just love to see that get paid down. And it is a beautiful moment when your acquisition debt is paid off and suddenly that 4,000, 10,000, $15,000 monthly payment is gone. And you know, you know why that's so beautiful. Try to follow me on this. When you are paying your debt every month, the amount that goes to principal and the amount that goes to interest, that apportionment between those two changes in the very first month of making your payment, assuming it's not an interest only period, as soon as you make that payment in what's called an amortizing loan, which is where a portion goes to interest and a portion goes to principal most in that first payment, it's the time when the least amount of that payment goes to paying down the principal and the most amount of that payment goes to paying interest. And the next month, a little bit more, let's say 10 or $15 more goes to paying down principal and 10 or $15 less goes toward the interest. And month after month, year after year, as you get near the end of the term of that debt, most of what you're paying goes towards principal. And in that last few payments, barely anything is going to interest, it's almost all going to principal. Now banks do this because they're smart. They want to get paid their interest first. That's definitely self serving. They get paid their interest first and over time, as the principal gets paid down, they get less. Now here's an important feature on this though. As you pay down debt, what portion between the principal and the interest is tax deductible and which portion is not? I've said this many times on my podcasts. It's only the interest that's tax deductible. It's only the interest that's going to show on your profit and loss statement. So when you're on your profit loss statement and you're, you're looking on it and you go down near, somewhere near the bottom and it shows interest expense, just know that that interest expense, that's not your full payment. You may have paid $10,000 to the bank, but that's only showing $4,000 because that's the interest expense and only that is deductible. The $6,000 repayment back of the loan is not tax deductible. Like I said in my last podcast, because you didn't recognize as income the loan from the bank, the money you got from the loan. So when you pay it back, you don't get a tax deduction, only the interest is tax deductible. So that's why it gets difficult. As you get near the end of the term of that debt, it gets more and more difficult because you're making the same payments month in, a month out, but you're getting less and less tax deduction because the interest gets less and less and less and the interest is tax deductible. So think about it. In that first year on a 10 year loan, million dollar term, I'm just using round numbers here. It's a $10,000 a month payment. And let's say in that first year you ended up paying $50,000 in interest and it's $10,000 a month, $120,000 for the year. So $70,000 went to principal, $50,000 went to interest, you just got a $50,000 tax deduction for the interest. Fast forward to the last year. And in the last year again you paid the same amount, $120,000. But let's say only $10,000 of that was interest. You only got to deduct $10,000. So you're getting a lot less tax deduction later in the term of that debt. $10,000 versus the $50,000. So on that $40,000, you might be paying an extra $15,000 in taxes, and yet you were paying the same monthly loan payment. So in other words, it gets harder and harder and harder to pay your debt as time goes on because you get less tax deduction. But when you do pay it off, the beautiful thing is because at the time when you pay it off, you were virtually getting no tax benefit for those monthly payments. Suddenly, suddenly you now get $10,000 a month back in your pocket because you paid off the loan. And, and that is not taxable, meaning there's not a, it's not a new tax that suddenly you're having to pay by having that extra $10,000 in your pocket. Hopefully you follow me on that. The analogy I love to use is like you're hiking Mount Everest or, I don't know, you're hiking Mount Whitney or some mountain. And as you're getting higher, the altitude, in the altitude, the oxygen level is lower and it gets harder and harder and harder and every lap, every, every switchback gets more difficult. But finally you make it to the top. AKA you paid off your debt. You make it to the top and you summited. And now you just have this beautiful panoramic view and you're breathing just fine now and you've accomplished that. And it's such a beautiful moment. Paying off debt. It's a little bit like that. All right, question number nine. How much did I pay down in, in my debt last month? Number 10, did I take on any new debt and, or purchase any new equipment that I should relay to my accountant? The accountant will need to know the specific purchase amount and loan details I've been doing. My accounting department does a lot of accounting. We do probably 600 reconciliations every month between our, our dentists, s, corporations and business accounts, partnerships, and Maybe they're building LLCs or whatnot. We do a lot of that. Now the, one of the areas that's most challenging for us is knowing when an expense to say Henry Schein is for supplies or whether it's for that dental chair. Following up on my earlier example, we just see an outflow to Henry Schein. And so a lot of times you'll make a payment to Henry Schein for 15, $20,000, 30, $40,000 for just straight up supplies. And so if we see a payment, you bought a dental chair for, let's say, $15,000, it's going to be really hard for us to know that. And so that's why, that's why one of two Things you can set up sort of a sub account with your credit card and have one account for equipment and one account for supplies. And then that way we know when we're pulling in those transaction details from your bank, or you just send an email or text, whatever, to your CPA accountant or bookkeeper saying, hey, keep your eyes out for this $15,000 transaction. It wasn't supplies, it was a dental chair. So if you bought, if you bought a car, if you bought a CAD cam machine, if you bought some new. Yes. New dental chairs, some office furniture, if you put on a new roof on your building, if you built out a new operatory, all of these things are not expenses, these are assets. These are what are called capital improvements or capital expenditures. And those have to be accounted for differently. And it's important that your accountant know this so that they can do it right, and so notify them. Now, a lot of that stuff, if not most of it comes with debt. Generally, dentists are financing the purchase of that laser of that CAD cam, of that cone beam, of that build out. They're financing it. And so from the business checking and credit card account, a lot of times we accounts, we don't see the full content of that transaction because if you financed it entirely, we won't see anything until the payment starts coming through. And sometimes for us, that's the indicator when suddenly we see a consistent payment to a bank every month and we're like, okay, what does that loan relate to? And we asked the doctor, oh yeah, I bought a Sirona cone beam last three months ago and that's my loan payment. Okay, great. Well, we know now, but it would be nice to know in the month of when you buy these big equipment, these big purchase items and any debt that you take out, please notify your accountant because it's just not often clear when that occurs. And please send them the loan detail, the term, the interest rate, yada yada on the loan. All right, everybody, there are sure many more questions you could be asking yourself on your profit and loss statement. But there are 10 questions you can ask yourself when reviewing your profit and loss statement every month. Hope you found it helpful.