What Is a Profit and Loss Statement (P&L) in Dentistry?
A Profit and Loss Statement (P&L) is a financial report that shows a dental practice’s income, costs, and profit over a given period (monthly, quarterly, or annually).
It reveals how much revenue was earned, what expenses were incurred, and the net profit left after costs.
Why Does a P&L Matter for Dental Practice Owners?
The P&L is the core financial report used to measure performance — but in dentistry, it’s often misunderstood.
- Revenue Recognition Issues: Many accountants record cash received, not treatment delivered. This overstates profit and tax liability.
- Expense Misclassification: Lab costs, associate pay, and staff wages must be correctly categorised to track profitability.
- Decision Power: Without an accurate P&L, owners rely on gut feeling, not data, to make hiring, investment, or exit decisions.
Example:
- Reported revenue (cash basis): £1,000,000
- True revenue (treatments completed): £950,000
- Misstated profit = +£50,000 → leads to overstated tax bill.
What Does a Dental P&L Include?
| Category | Examples |
| Revenue | NHS contract income, private treatments, plan income |
| Direct Costs | Associate pay, lab fees, materials |
| Operating Expenses | Staff wages, rent, software, marketing, insurance |
| Other Costs | Depreciation, loan interest, professional fees |
| Net Profit | What’s left after all costs — your true business return |
How Does DentPulse Improve P&L Accuracy?
| Feature | Function |
| Revenue Recognition | Tracks income when treatment is delivered, not when cash hits bank |
| PulseBenchmark™ | Compares profit margins to top-performing practices |
| Profit-to-Pocket™ Overlay | Links P&L profit to safe owner drawings (PPBT/PPAT) |
| Expense Categorisation | Splits variable vs fixed costs for clarity |
| Scenario Planning | Tests how cost or revenue changes impact profit |
DentPulse transforms the P&L from an accountant’s report into an owner’s decision tool.
DentPulse Tip™
“Your P&L isn’t about what you collected.
It’s about what you actually earned — and whether your costs are building or breaking profit.”
Related Glossary Terms
- Revenue Recognition – earned vs received income
- Fixed Costs vs Fixed Expenses – overhead structure
- PulseBenchmark™ – benchmarks P&L net margins
- Profit-to-Pocket™ – links reported profit to owner’s take-home
- Management Accounts – monthly version of P&L for decision-making
Glossary Summary Table
| Term | Meaning |
| Profit and Loss Statement (P&L) | Report showing revenue, expenses, and profit over a period |
| Purpose | Measure performance, identify leaks, plan decisions |
| DentPulse Advantage | Tracks treatment-earned revenue + owner-focused overlays |
