What Is Working Capital in a Dental Practice?
Working Capital is the money your dental practice has available to run day-to-day operations — calculated as:
Working Capital = Current Assets – Current Liabilities
It reflects how much cash (or near-cash) you have after covering short-term debts like bills, tax, and supplier payments.
Positive working capital = flexibility and control
Negative working capital = stress, debt, and disruption
Why Working Capital Matters for Dental Practice Owners
You can have a busy diary and still run out of cash if working capital is weak.
Common scenarios:
- Patients pay upfront, but treatment spans months → liability (Deferred Income)
- Invoices from labs and suppliers hit before patient payments clear
- VAT, clawback, or tax bills arrive while cash is tied up
Example:
| Month | Current Assets | Current Liabilities | Working Capital |
| April | £120,000 (bank + receivables) | £100,000 (payables + tax due) | £20,000 |
DentPulse updates this automatically — no manual calculation needed.
Common Components of Working Capital in Dentistry
| Asset / Liability | Includes |
| Current Assets | Cash, patient deposits, receivables, plan income due |
| Current Liabilities | Lab bills, associate pay, tax due, NHS clawback, lease payments |
| Deferred Income | Reduces working capital — liability until treatment delivered |
| Overdrafts | Short-term borrowing that may mask negative working capital |
Many practices run into cash crises not from lack of revenue — but poor working capital control.
How DentPulse Tracks and Improves Working Capital
| Feature | Function |
| Working Capital Snapshot | Real-time view of assets vs liabilities |
| CFFP™ Module | Forecasts impact of future inflows vs upcoming payments |
| Liquidity Colour Zones | Green/Amber/Red status for cash safety |
| 12-Week Cash Buffer | Benchmarks how long your capital lasts without income |
| PPP™ Integration | Protects against over-drawing when capital is tight |
DentPulse helps you see the financial road ahead — not just the balance today.
DentPulse Tip™
Profit means nothing if you can’t pay your bills.
Working capital is your runway.
Keep it positive, protected, and forecasted — or risk crashing mid-flight.
Related Glossary Terms
- 12-Week Cash Buffer – How long your working capital lasts without new income
- Deferred Income – A key liability reducing available capital
- Cash Flow Forecasting – Predicts when working capital will be stressed
- Current Liabilities – The bills you must pay in the next 30–90 days
- PTP™ – Profit-to-Pocket – Ensures working capital supports safe drawings
Glossary Summary Table
| Term | Meaning |
| Working Capital | The cash and assets you can use to run daily operations — after paying short-term liabilities |
| Purpose | Measure financial flexibility and near-term solvency |
| Financial Impact | Weak working capital leads to stress, borrowing, or tax payment issues |
| DentPulse Advantage | Real-time tracking, forecasts, and protection against financial blind spots |
