I have a potential new client which is a dental practice. She has had someone else doing her financial statements. I was just going to do some anaylsis ratios. However,I noticed that her Balance Sheet doesn't contain AR. I know that this is't correct because she does some financing for clients and she has just recently taken on insurance. But her P&L doesn't relfect any COGS. Should there not be "some" COGS involved in a dental practice?
One would think there should be. Examples would be filling materials, bleaching products and there are usually outsourced items like bite plates, bridges, crowns and caps. They may have not been classified correctly. Probably put under supplies.
Also included in COGS should be the labor related to those actually involved in the delivery of the service, while the front office staff remain labor under overhead expenses. They should also have some inventory for items that they buy that are large dollar to track as they are "checked" out for various patient services.
