Frostdale Advances, a small-business funding service in Monroe, Louisiana, shows how a dental practice can build a twelve-month cash flow projection before financing chairs, imaging or a build-out: production, collections timing, fixed and variable costs, and the new equipment payment. Ouachita Parish, LA had 79 dental practices with employees in 2023 (CBP).
Cash flow statement vs cash flow projection
A dental practice cash flow statement looks back: it shows what came in and went out last month or last year. A cash flow projection looks forward: it estimates the next twelve months, month by month, including the purchase you are considering. Partners reading a request for a large equipment purchase find a sensible projection useful, and owners find it even more useful, because it shows the months that will be tight.
The lines to include
| Line | Where the number comes from |
|---|---|
| Gross production | Practice-management reports, by provider and hygiene |
| Collections | Production times your collection rate, shifted by insurance lag |
| Payroll | Dentists, hygienists, assistants, front desk |
| Rent and occupancy | Lease, utilities, maintenance |
| Supplies and lab fees | Recent invoices as a share of production |
| Existing debt payments | Current loan and lease statements |
| New equipment payment | The quote spread over the term you are considering |
| Net cash flow | Collections minus all payments, month by month |
Adding the new equipment
Hypothetical, for illustration only: a practice is weighing an $84,000 imaging and sensor upgrade. Spread over 60 months, the price alone is $1,400 a month before any finance charge. If the upgrade supports four more diagnostic visits a week at a collected $140, that is about $2,430 a month, but collections lag production by about 30 to 45 days. The projection should show the payment starting in month one and the added collections starting in month two or three.
Running that through twelve months shows whether the practice can carry the first two or three months before the new production is collected. If it cannot, a small working capital cushion or a later first payment is worth asking about.
Dental office working capital and the dental equipment loan
A dental equipment purchase fits equipment financing well, with the unit as security. A full operatory build-out or a relocation is usually a term loan, often alongside equipment financing for what goes in the rooms. The dental practice funding page covers chairs, imaging and build-outs in more detail.
Local context
Ouachita Parish, LA had 79 offices of dentists with employees in 2023, employing 563 people with $26.9 million in annual payroll; 49 were in ZIP 71201 (County Business Patterns 2023; ZIP Business Patterns 2023). About a third (32.9%) had fewer than five employees.
More local figures are on the Monroe, LA city page, and other articles are on the Frostdale blog.
Building the dental practice cash flow statement from bank exports
- Export twelve months of business bank transactions to a spreadsheet.
- Tag every deposit: patient payments, insurance payments, other.
- Tag every outflow: payroll, rent, dental supplies, lab bills, equipment payments, owner draws.
- Total each tag by month.
- Check the deposit totals against the collections report from your practice-management software.
The statement built this way is the opening column of the projection. If deposits and collections disagree by more than a little, find out why before projecting anything forward.
Stress-testing the projection
A projection built on average months will look better than the year turns out. Run two extra versions: one with collections 15% lower than expected for three months, and one with the new equipment's added production arriving two months later than planned. If the practice can still meet payroll and the new payment in both, the purchase is on solid ground.
Keep the projection simple enough to update monthly. Comparing it with what actually happened is the fastest way to catch a problem early.
By Frostdale Advances · Updated
