Finance and valuation
Overhead
Overhead is the cost of running a dental practice, such as team payroll, supplies, lab fees, rent and equipment, usually discussed as a share of collections.
The ADA's guide to practice financial basics defines overhead as the ratio of expenses to collection, expressed as a percentage. Expenses is the dollar amount the practice spends. In ordinary use, people also say overhead for the costs themselves. Typical lines include payroll, lab fees, supply costs, rent, utilities and insurance. Because overhead divides by collections, it can fall when collections rise even if spending is unchanged. ADA News (March 2022) reported that industry-wide practice overhead averages around 62 percent. See overhead percentage for the ratio and how sources define it.