What Are Cash Reserves in a Dental Practice?
Cash Reserves refer to the liquid funds your practice holds back for emergencies, slow months, or planned reinvestments. These are not working funds for day-to-day bills — but your financial shock absorber.
Think of cash reserves as your “oxygen tank” — keeping the practice alive when income dips or unexpected costs arise.
Common reserve goals: 8–12 weeks of fixed costs or 1–2 months of average outflows.
Why Cash Reserves Matter for Dental Practice Owners
Most practices are one payroll cycle away from a financial spiral — especially if revenue drops or NHS clawbacks hit without warning.
Cash reserves give you time to:
- Pay staff without panic
- Delay borrowing or costly finance
- Handle big tax bills or equipment breakdowns
- Invest in growth confidently, without liquidity risk
Example:
| Monthly Fixed Costs | £38,000
| Target Reserve | 3 months = £114,000
| Current Reserve | £64,000 → Red Zone
DentPulse shows this in real time — with visual alerts and monthly progress tracking.
What Counts as Cash Reserves?
| Category | Included? | Notes |
| Bank Cash (Current Account) | ✅ | Core reserve |
| Business Savings Account | ✅ | Ideal holding place |
| Instant Access Business ISAs | ✅ | If funds are accessible within 24–48 hrs |
| Undrawn Overdraft | 🔶 | Can support buffer, but is still debt |
| Petty Cash | ❌ | Too small and insecure |
| Deferred Income / Deposits | ❌ | Not true reserves — these are liabilities |
DentPulse separates available cash from ring-fenced patient money — so you don’t mistakenly overspend.
How DentPulse Tracks and Builds Cash Reserves
| Feature | Function |
| 12-Week Buffer Analysis | Calculates how long reserves can sustain operations |
| Cash Flow Forecasting Engine | Predicts reserve trajectory based on inflow/outflow |
| PPP™ Drawings Control | Stops unsafe owner withdrawals when reserves dip |
| Reserve Target Alerts | Notifies you if buffer falls below safe zone |
| Cash Pot Automation | Helps split reserve savings from daily spending accounts |
DentPulse transforms “cash in bank” from a vague number into a real safety score.
DentPulse Tip™
Cash reserves aren’t idle.
They buy you time, peace of mind, and the power to say no.Build them intentionally — and let DentPulse monitor them automatically.
Related Glossary Terms
- 12-Week Cash Buffer – Strategic liquidity reserve for fixed cost survivability
- Cash Flow Forecasting – Predicts cash strain or build-up
- Deferred Income – Not a reserve — future obligation
- PPP™ – Profit-to-Pocket™ – Ensures safe drawings that don’t erode reserves
- Working Capital – Includes reserves, but also short-term receivables and payables
Glossary Summary Table
| Term | Meaning |
| Cash Reserves | Liquid funds held to cover emergencies, delays, or strategic decisions |
| Purpose | Provide financial resilience and protect against unexpected shocks |
| Financial Impact | Prevents panic borrowing, protects payroll and tax commitments |
| DentPulse Advantage | Tracks true reserve levels in real time, sets targets, and prevents overspending |
