Understanding Your Metrics for A More Profitable Practice: Overhead
Dec 04, 2025
When dentists think about overhead, they often jump straight to the obvious costs: supplies, lab bills, equipment, or the rising cost of doing business. And while those matter, we can only control them so much. More often than not, overhead is high than necessary because your systems are weak.
And when systems are weak or failing, everything else becomes more expensive.
Let’s break down how poor systems drive overhead up — and what you can do to get it back under control.
1. The Hidden Overhead Killers
A high cancellation rate doesn’t just create open time on the schedule.
It creates paid idle time. Your team is still on the clock. Your fixed expenses still hit. But your production dropped, and you have lost the opportunity to generate more production for future visits without a patient in the chair.
This is fueled by:
- Weak cancellation policies
- Poor communication or patient education
- Lack of follow-through on confirmations
- No system for reactivation
- Disconnected patient experience
And when patients fall off the schedule or fail to return, your attrition rate rises. Now you’re spending more money for staff to track down these patients and get them rescheduled. Or you are spending more money on marketing to try to draw in new patients, which is typically three times more expensive than bringing back your current or former patients.
2. Administrative Inefficiencies That Quietly Increase Payroll
Most practices underestimate how much extra work they’re accidentally creating.
Examples:
- Claims denied because insurance forms weren’t filled out correctly, which leads to time consuming appeals, more call to insurance companies, and slow funds
- New patient calls mishandled, which leads to the need for more new patient calls
- Weak verbiage when presenting treatment, collecting payment, or scheduling appointments → uncompleted tasks → more follow-up
- Team members unsure who owns what tasks → duplication, miscommunication, or tasks falling through the cracks
This creates a cycle:
More chaos → More tasks → More people needed → Higher payroll → Higher overhead
This isn’t a staffing problem. It’s a systems problem, that stems from a training issue.
3. Staff Cost Percentage: The Largest Controllable Overhead Number
In most general dental offices, staff costs should sit between 25–30% of collections.
But many practices find themselves at 32%, 35%, even 40%.
Not because people are overpaid — but because inefficiency forces the practice to hire more people than they actually need. When systems work, you reduce unnecessary labor, eliminate duplicated tasks, and keep the schedule full enough to support the team you already have.
This one number alone can determine whether the practice thrives or struggles.
How to Track Overhead Properly
Tracking overhead does not need to be complicated. It comes down to three things:
1. Pull your total overhead expenses monthly.
This includes:
- Staff payroll
- Benefits
- Rent
- Supplies
- Lab fees
- Technology
- Insurance
- Repairs/maintenance
- Marketing
- Misc administrative costs
Add everything together.
2. Compare it to your total collections.
Use this formula:
Overhead % = Total Expenses ÷ Total Collections.
Most practices have an overhead of 55-70%.
3. Track staff costs separately every single month.
Because staff costs are the most controllable, you want to monitor:
Staff Cost % = Total Payroll ÷ Total Collections
When you track this every month, realize if over 30% of your overhead is within the staff cost.
How to Lower Overhead (Without Cutting Pay or Micromanaging)
1. Strengthen your scheduling systems.
2. Train your team on confident verbiage.
3. Improve insurance submission accuracy.
4. Reduce duplicated tasks.
5. Stop hiring to fix chaos. Fix the chaos first.
6. Track metrics and overhead monthly
Track all overhead cost monthly and break into categories (such as: supplies, rent, lab cost, etc) This will allow you to have a clear view of what you are spending in each category and if it is generating the outcome you need.
The Bottom Line
Yes, overhead in dentistry is high.
But there are parts within our control.
You don’t lower overhead by cutting staff random hours, or reducing benefits. You lower overhead by strengthening systems so your team can perform at their highest level.
When systems become clear and consistent:
✔ Production rises
✔ Patients show up
✔ Claims get paid
✔ Treatment acceptance increases
✔ Your team works confidently and efficiently
✔ You no longer need to overstaff to survive chaos
And that is how you finally get your overhead back in the 55–65% range… and keep it there.
👉If you're ready to take the first step into maximizing your profits. Start by maximizing your schedule click here to get our FREE step-by-step guide 5 Easy Fixes to Fill Your Schedule- Today!