Dental Due Diligence Checklist

Acquisition helps a company grow and earn more money. Before acquiring a dental practice, a thorough financial analysis needs to take place. As a dentist, you likely do not have the knowledge to perform this task competently. Therefore, you should task a lawyer or CPA to help ensure that you are making the right business decisions.

dental due diligence checklist framingham ma

In addition, it is helpful to have a due diligence checklist  that ensures that you are making an educated decision. By following all the steps in the checklist, you can determine if purchasing the dental practice is a good idea or if the acquisition will be too risky.


  • Review patient charts and treatment plans to get a feel for the quality of patient care. Are there complaints? If so, how will they affect you?
  • Check to see the dental practice’s relationship with third-party payers. Has Medicaid or insurance companies audited the practice in the past?
  • Are there any specialists involved. Any endodontists or orthodontists who come in weekly or monthly to perform services? If so, you may be bound by any agreements involved.
  • How is the practice organized. Is everything still in paper form or has mostly everything become digital? If the practice is computerized, will you have access to the software?
  • Check the space of the office. Is there enough room? If not, can it be expanded?
  • Review the terms and conditions of the lease. What is the monthly lease amount? Is the lease assignable?

Obtain Information

  • Gather every financial document available to get a good idea of how well the company is performing. This includes tax returns, profit and loss statements and accounts receivable. Get a good look at the revenues. How do they look year over year?
  • Get a copy of the employee manual. This will give you an idea of the job descriptions and salaries of the employees.
  • Obtain information about the purchase price. How was it established? Is it comparable to similar dental practices?
  • Gather logs and records to see if the practice has been in compliance with HIPAA and OSHA. Patient privacy and safety should be important aspects of any business.
  • Ask for fee schedules and patient charts. By reviewing these, you can assess current prices and patient needs and determine if you can bring in more revenue by offering more services.

Do Your Research

  • Why is the dentist selling the practice? There are many reasons, from retirement to low revenues to legal issues.
  • When was the practice established? Are there established patients or is it relatively new, with room for new patients?
  • Are there any problems plaguing the practice, such as financial or legal issues? Liens and judgments are common, but are often not disclosed during a sale.
  • What is the reputation of the dental practice? How is he or she revered in the community? Are there good things to say, or mostly negative reviews?
  • Will the current staff stay with the new owner, or will you have to hire all new employees? How many dentists and hygienists are currently employed by the practice? Are you willing to pay their current salaries? Is there an opportunity to hire more or make do with fewer employees?
  • What are the demographics and statistics regarding patients? For example, what is their average age? How many patients does the practice have? How many new ones are coming in each month? Do they receive referrals and how are they  generated? What is the social/economic status of the community as a whole?
  • If applicable, what marketing strategies are currently employed by the practice? Do they mostly use newer marketing strategies such as social media or online ads?
  • Are the office hours current? Which dentists work on certain days? What dental procedures are offered? Does the practice offer emergency appointments on evenings and weekends?
  • How old is the equipment? Is it outdated? Will it need to be replaced soon?

Learn More

Due Diligence Checklist

Buying a dental practice is a huge undertaking. At Ash Dental CPA, we provide personalized service to all our clients. We can provide you with the advice you need to help your dental practice grow. To learn more about the services we offer, call (508) 458-6789 or fill out the online form.