Mike White on How Perfect Bookkeeping Could Add $30M to Your Valuation
May 15, 2025
In the DSO world, as in life, financial disappointment can jeopardize growth, making a strategic and realistic approach to profit-making crucial to secure financial health for your business. And yet, many struggle with the concept. In the latest episode of The Dental Economist Show, host Mike Huffaker welcomes Mike White, Principal at Clifton Larson Allen, to explore why proper financial fundamentals are crucial for practice growth, how to position your group for successful transactions, and key strategies for maximizing practice value.
This conversation offers deep insight into the hidden financial leaks plaguing many DSOs today, tried and tested methods to unlock hidden profit and the importance of realism and acceptance in it all, reminding us that it pays (literally) to have your financial house in order!
In the DSO world, as in life, financial disappointment can jeopardize growth, making a strategic and realistic approach to profit-making crucial to secure financial health for your business. In the latest episode of The Dental Economist Show, host Mike Huffaker welcomes Mike White, Principal at Clifton Larson Allen, to explore why proper financial fundamentals are crucial for practice growth, how to position your group for successful transactions, and key strategies for maximizing practice value.
What You’ll Learn:
- How to establish proper financial foundations and reporting structures to bolster growth
- Why standardized financial reporting and consistent data management directly impact practice valuation
- The "Multi-Site Financial Framework" for managing finances across multiple locations effectively
- How to avoid common financial pitfalls that can derail practice transactions or partnerships
- Why integration of practice management and accounting systems is crucial for scalable growth
- Why maintaining clean financial records can increase practice valuation by millions at scale
- How to leverage financial data to make informed operational decisions and drive practice efficiency
- The importance of building a strong advisory team for sustainable practice growth
Tune in for a masterclass in keeping one’s DSO financial house in order - a foundational business priority that can make or break your practice.
Episode Highlights:
[03:10-11:47] The Foundation of Financial Success
Mike White emphasizes that treating bookkeeping as an afterthought is costing dental practices millions in unrealized value. Financial fundamentals are crucial for driving performance, requiring integration of analytics and software tools to provide actionable insights. Many practice owners limit themselves by only engaging with their CPA annually for tax returns, missing opportunities for strategic guidance throughout the year. Implementing robust financial tracking and regular professional oversight can help identify efficiency gaps and negotiate better vendor contracts. For multi-location groups, proper financial management becomes even more critical as you scale, directly impacting practice valuation and operational success.
[11:48-18:47] Maximizing Practice Value Through Financial Clean-Up
Mike suggests that a systematic approach to financial organization can dramatically increase practice value, as demonstrated by a case where proper bookkeeping added $35 million to a practice's valuation. Practice owners often incorrectly categorize expenses and miss opportunities to capitalize assets, leading to understated EBITDA calculations. Simple improvements like negotiating supply costs down from 8% to 5% and optimizing payment processing fees can significantly impact profitability. Strategic financial management includes proper allocation of expenses across locations and understanding how to present financials for maximum value.
[33:35-36:08] Strategic Growth Planning
Business owners must clearly define their vision before pursuing growth, as the path to 100 locations versus maintaining a profitable smaller operation requires very different strategies. Building the right team of advisors and partners early is crucial for executing your chosen strategy effectively. The key is aligning your growth plans with your personal goals and lifestyle preferences rather than following industry trends blindly. Successful practices come in many sizes, from the two-day-a-week solo practitioner earning $2M to the hundred-location DSO.
[36:08-41:08] The Power of Replicable Systems
Investors look for practices with clearly defined, replicable operating models that can scale efficiently. Having standardized systems across practice management, accounting, and operations makes your organization significantly more attractive to potential partners or buyers. Technology integration and data analytics capabilities are now essential components of practice value creation. Documentation of successful processes and proof of consistent execution across locations demonstrates scalability potential.
Mike White shares the financial fundamentals every dental leader needs to know—whether you’re scaling, selling, or staying independent. Listen now and follow the show for more expert insights.
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