Toothonomics 101: Revenue vs. Profit

Your office has revenue and hopefully your office has profit. Let’s look at the difference.

Revenue is all the money you take in – from patients, insurance companies, sales of products, etc. If you add up all the deposits to your bank account each month, that is your monthly revenue.

Profit is what’s left after you’ve paid all your expenses. If you look at what is left in your bank account each month after writing checks for all your bills, that is your monthly profit.

For a true accounting of profit, it’s key to include all your expenses, including a reasonable owner salary. Your profit is what’s left over after paying all expense. You may want to check with your accountant, though, on the best way to split owner salary and profit – there could be some advantages for tax savings.

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