Craig: What else do they know? Watch your expenses. Okay. It’s amazing how many times you see, and not just dentists, in any business owners. They’re not watching their expenses, and then money is disappearing. It’s easy… and it sometimes it’s legitimately disappearing because when cash is good that is flowing, you spend money on everything. All right. Save some money. Pay down the debt. Come up with a plan to pay down the debt. If you could pay faster, that’s great.
But just if they know to communicate and they’re working with somebody who will communicate with them, that’s… they’re way ahead of the game. Like I said, most CPAs are good at putting the right numbers in the right boxes but it kind of ends there. You want to really communicate and see… get some value. Get some value.
Howard: I want to ask… I want to ask you some common questions. One of the most common questions they ask on Dentaltown, under accounting and all that is should I lease or buy my car? That is a very common question.
Craig: So let’s just say you’re going to be driving a reasonable amount of distance and you’re not going to go over your mileage so and you’re using it a hundred percent for business. Let’s just say. So if you’re going to buy a car, you get to depreciate it over a period of time and the first year’s depreciation is maxed out at about twenty-five hundred dollars.
If you lease that vehicle you’re typically going to get a bigger deduction every year versus purchasing it, so… and if you’re somebody like me, that doesn’t know how to fix a car. And doesn’t want to deal with fixing a car and you rather be in something new every three years. From a lifestyle perspective, you’re better off leasing, but you’re going to have a payment forever.
Howard: So, Dentaltown has fifty categories and by the way to you kids getting out of dental school, if you had told me thirty years ago when I got a dental school. Someday I’d have an iPhone in my pocket and there’d be this app called Dentaltown with a quarter-million dentist living in my pocket. I have to thought that was some scene out of Star Wars. But the categories like root canals, fillings, crowns. The one is finance and then you open finance it’s either equipment, acquisition and practice expansion, financing, patient finance plans, personal finance or taxes. So… so do you consider yourself more… as a CPA is that more personal finance or taxes?
Craig: It’s a mixture of both because if you’re able to keep more of what you make, you have more things that you could play with in your life. To save or invest in things, so it’s a combination. Personal finance and or taxes.
Howard: What other questions, do you think, young dental students that just got out of school would want to know about taxes and personal finance?
Craig: We get a lot of questions. Should we pay down our student loans? Should we pay down our practice debt? How do we save for new equipment? What’s the best way to go about… we want to purchase another piece of equipment next year and it’s going to cost us a hundred and fifty thousand dollars? What’s the best way to save for it? And if we save ninety thousand dollars this year we’re going to have it in a bank but we have to pay tax on it. How do we… is there way to do it where we could get a deduction for that money?
So those are big questions we get from people that are already in business and they’re young but they’re growing, and they want to do things the right way. That they’re not getting those answers from anyone else.
Howard: Okay, but if she’s setting up a De Novo practice. She’s already found a place, she’s going rent two thousand square feet. She’s looking all that stuff, but she started setting this up. Would you recommend Quicken? Would it be QuickBooks desktop? Would it be QuickBooks Online? What accounting package do you think she should go with?
Craig: So when we work with a client, we do all their… what I’ll call write up work which is the accounting part of it. All right. I think a dentist is better off spending his or her time in their practice doing what they need to do. If they want to enter… we allow them to enter checks and stuff like that into our system. But my personal favorite is QuickBooks. I think QuickBooks Online is unfortunately… it’s a horror show. It doesn’t have the functionality that the regular QuickBooks has, and I don’t think a dentist should be doing their own books.
Howard: I’m so glad you said that because when I hear people say, ‘Oh, Quicken Online, that’s awesome’. I was like, ‘Okay, dude. You just basically told everyone in the room you have no idea what you’re talking about’. I use… I have an MBA, I’ve been doing this thirty years. I have a two person, two bookkeepers but we use QuickBooks. I mean we use Peachtree.
Howard: Do you have any clients who use Peachtree? What do you think about Peachtree?
Craig: I’ve used Peachtree. It’s just… I don’t think there’s much of a big difference between QuickBooks and Peachtree. We don’t have any clients on Peachtree. It’s been a long time since I’ve worked with Peachtree but honestly it’s just a matter of being comfortable with it. I don’t think there’s a big difference but QuickBooks is the two hundred pound gorilla.
Howard: And Microsoft bought Great Plains accounting. Why do you think Microsoft bought Great Plains accounting and how would you compare Great Plains accounting to like QuickBooks?
Craig: Great Plains is I think there’s a new name for it. Its way ahead of, I think, anything that most dental practices are going to need. Okay. Maybe if you have multiple offices and you want to be able to roll up all your financials into one. You’d use something like that but that’s not typical practice software I would say.
Howard: Well but there’s… but twelve percent of the market is DSO’s.
Howard: So there’s a lot of guys listening to you right now that might have twelve offices.
Craig: I haven’t come across anyone using Great Plains in the dental field. But it is… it’s a big cumbersome piece of software and I just haven’t come across anybody that uses it. We have a client that is in multiple countries that uses it. It’s cool but I haven’t seen a need for it.
Howard: Now the S&P 500, they all use… what is it? SAP accounting…
Howard: Software out of Germany?
Howard: So the fortune 500 uses the German SAP. The thing that I was always mad at the most about Bill Clinton. Forget all of his… I know you suppose to never talk about religion, sex, and politics but I mean when he blocked Microsoft buying into it. Because Bill Gates wanted it to be Word, Excel, PowerPoint and for a business you got to have the accounting and he tried to buy Intuit which owns Quicken and Bill Clinton said that was monopolistic behavior. And everybody blocked it. And I just thought, ‘Man, there’s all these small businesses would have been so nice if their Microsoft Office suite would have been merged with their accounting’.
And I just think how more small businesses would have known their numbers and been better businessman and avoided… there’s sixty thousand small business bankruptcies a year. And I just thought that was overreaching of the Federal government not to let him innovate with that software package.
Craig: Yeah. Integration would be a wonderful thing. It helps any business run more efficiently.
Howard: Yeah. So is Great Plains still… you said it’s not called Great Plains anymore?
Craig: It’s not called Great Plains. I’m trying to think of the name of it. Like I said we have a client, an international client, they’re in multiple countries and they use it and we use it with them.
Howard: Oh, it’s called… changed to Microsoft Dynamics.
Craig: Dynamics. Yeah. Dynamics.
Howard: Over a decade ago. And Microsoft Dynamics. So you think that’s… so would you… would you say that SAP is for the Fortune 500. Quicken’s more for just personal family, and this Microsoft Dynamics maybe that’s just for like middle market company. Maybe that’s more fifty hundred million dollar. What would you…
Craig: Yeah. I would say definitely a bigger companies would be Microsoft Dynamics. Quicken has a couple different variations. They have their Enterprise version so they have some robust software and reporting capabilities. But your average dentist, even if he owns one or two practices, QuickBooks is fine. QuickBooks Online I would stay away from.
Craig: Well number one, if you ever want to move data from QuickBooks Online to regular QuickBooks up until at least last year you are unable to do it. You had to do it all manually and they own your data. I mean they say you don’t own it but they own your data. It’s all there’s so you have to get it out of there. And it doesn’t have the robust features that regular QuickBooks has. Running a certain reports is not as easy. Maybe I’m a little bit old school but it I could do a lot more with regular QuickBooks or QuickBooks Accountant version than I could with QuickBooks Online but Intuit does want you to move to online. That’s what they wish.
Howard: Okay. Then I want to ask you the scary part. I’m going to be honest I’m embarrassed to ask you this question, but it’s true that’s a big fear. A lot of dentists always are worried that if they don’t do all this themselves, they let their office manager help them or they let you input the checks whatever. It’s just going to set them up for embezzling. And that’s why a lot of dentists say, ‘I don’t want my receptionist entering the checks. I don’t want her doing payroll. I got to do everything myself because whoever helps me is going to steal’.
Craig: Right. Well if you have somebody in your office that you trust. Okay. And it doesn’t mean that people have check-writing privileges. Okay. So, we have access to a whole bunch of our clients’ bank accounts, but it’s called Accountants Access. It’s like read-only access. We can’t write checks, we can’t pay bills, all right. But, if you’re working with a good CPA and you have somebody in your office that you trust, and you actually look at your numbers occasionally. Between your CPA and yourself, you should be able to spot things that are out of place. Okay. So embezzlement happens. Okay. But it typically happens when people aren’t looking. You need to trust but verify.
Howard: What if one of my homies is listening to your right now and saying, ‘I’m an associate but if I called you up, do you help… is it pie in the sky to refinance all my student loans?’ A lot of them are driving around thinking I got nine different student loans going back from undergrad, different government programs. Sometimes they’ll post on Dentaltown, ‘should I go to the bank and get one loan and pay off all my student loans with one payment? Other people are saying you should refinance it. What’s your thoughts on student loan refinance?
Craig: I would say look at what it’s going to do to your rate, what’s it going to do to your overall interest cost over time and make the decision that way.
Howard: But do you… have you ever… if she called you would you work with her on that?
Craig: Oh, yeah. Yeah. We work with our clients on all sorts of finance needs. And so it’s not just about putting the numbers in the boxes. Okay. It’s a about making them more efficient and helping… give them the guidance that they need.
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