Dental Profit First

Profit First for Dentists: What are 10/25 Allocations?

As the exclusive home of Profit First for Dentists, H+P Advisors wants you to have a deep understanding of the core concepts of the system.  If you’re new to the system, read about The Basics of Profit First and register for our “Become A Profit Maximizer” Webinar.  

10/25 Rule of Profit First 

The 10/25 Rule in Profit First is the allocation process.  You are paying bills twice per month, on the 10th and 25th.  You benefit in two ways:

  • Doing this process every two weeks means you are working in batch – so you are more efficient.
  • Provides clarity for cash flow trends.

The 10/25 Rule is highly beneficial as it sets a rhythm for cash allocation processes every two weeks.  Money comes in, money goes out (allocated of course). Another bonus of the 10/25 Rule is the added flexibility around the due date(s) of your various vendors.  With batch processing, you can efficiently pay your bills, on-time, based on where the due dates fall in a bi-weekly period.  No more constant worrying about what’s been paid and what hasn’t.

Find Your Routine

Profit First is designed with human nature in mind. That said, flexibility is part of the plan. If you want to make cash allocations more often or on different dates than the 10th and 25th, that’s your prerogative. After all, implementing the system and becoming profitable is your main focus.

While it’s not necessary to stick to the 10/25 Rule, it is a great starting place to find what best suits you.  Some dentists like to allocate cash once-per-week. We do not advise more than once per week as it becomes more difficult to monitor cash flow and goal progression.  Just remember, the best-practices laid out in the book were designed to intentionally and effectively maximize the benefits of Profit First quickly.

Conclusion

If you’re just starting Profit First for your dental practice, start with best practices.  Each quarter, your system should be adjusted and reviewed for your particular business situation. The needs of the practice and your financial needs will continue to evolve, too.  With a trusted advisor from Hinrichs+Pesavento, your practice can turn a profit on your very next deposit.

As the exclusive home of Profit First for Dentists, H+P can help you radically change the financial health of your business.  

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