Budget 2%

by Larry Emmott on August 11, 2008

in General

Don’t make the common mistake of assuming that once you have purchased practice management software and some computers to run it your investment in technology is over. The fact is you will have ongoing expenses and you must plan and budget for them. If you don’t the original investment will never pay off as well as it should.

Ongoing expenses will include training, software upgrades, technical support, additional hardware and replacement hardware.

According to an article in Investor’s Daily the average health care office spends 2% of revenue on technology. That includes hospitals as well as physicians and dentists. In addition the article noted that businesses in general spend an average of 10% of gross revenue on technology.

Therefore an average dental office should plan to invest at least two percent of gross in technology on an annual basis. For a typical single practitioner with a $500,000 gross the annual investment should be at least $10,000. A better budget would be 5-7% or more for an aggressive high tech office. That translates into $25,000 to $35,000 per year.

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