Fractional CFO vs Controller for a Growing Dental Group

Dental insurance claims get adjudicated, paid, and sometimes written down or denied on a timeline that doesn't match when the service was performed, and each payer has its own rules. If your reporting shows collections without separately tracking claims outstanding, write-offs, and denials by payer, you don't actually know whether a location's low collection rate is a billing problem or a payer-mix problem. This reconciliation is controller-level work and needs to be current, not caught up quarterly.

Most DSOs pay dentists and hygienists some combination of a base guarantee against production-based compensation, which means comp expense has to be accrued against production as it happens, not simply recorded when a paycheck is cut. Getting this wrong understates true labor cost in a location's month, which then makes that location's margin look better than it actually is until the guarantee-versus-production true-up catches up weeks or months later.

You're running more than two or three locations with different payer mixes, provider comp structures vary by location or by provider, and consolidated reporting currently requires someone manually combining location-level spreadsheets. This is the point where dedicated, in-house ownership of consolidation and provider comp accrual usually pays for itself, since the coordination work grows faster than location count alone would suggest.

Your books are clean at the location and consolidated level, and what you actually need is help on capital allocation decisions: which location to expand, whether adding a new location is worth the startup losses most new locations run for the first year or two, and how supply cost per chair is trending as the group scales. A fractional CFO can also model whether a group's overall payer mix, cash-pay versus various insurance panels, is shifting in a direction worth adjusting marketing or provider recruiting around.

Ask a candidate to describe how they'd reconcile a location's monthly collections against outstanding claims, write-offs, and provider guarantee true-ups, all in the same period. Someone with real multi-location dental or medical group experience will describe a specific process; someone without it often defaults to a generic accounts-receivable answer that doesn't address the guarantee-versus-production accrual piece at all, which is the part that most often gets missed.

A candidate with real multi-location dental experience should be able to explain how they would:

• Reconcile each location's monthly collections against outstanding claims, write-offs, and denials, broken out by payer, in the same period.
• Accrue provider compensation against production as it happens, including true-ups on any base guarantee, instead of recording it when a paycheck is cut.
• Consolidate practice-level P&Ls without someone manually combining location spreadsheets each month.
• Track supply cost per chair by location, so drift against production shows up early.
• Keep a new location's expected startup losses separate from the performance of mature locations.

Clinical supply cost, disposables, materials, and lab fees, varies enough by procedure mix that a group-wide average can hide a location whose supply spend has drifted out of line with its production. Tracking supply cost per chair or per provider, not just as a lump expense line, gives a fractional CFO an early signal when a location's cost structure is quietly eroding margin, whether that's from waste, a vendor price increase that went unnoticed, or a shift toward more supply-intensive procedures.

This is a report a controller should be able to produce on a standing basis, not something reconstructed once a year during budget season, since supply cost drift is the kind of problem that's cheap to fix early and expensive to unwind after a full year of it compounding across every location.

A newly opened location typically runs at a loss for its first several quarters while the patient panel builds, and that expected loss needs to be modeled and tracked against actual performance separately from the mature locations carrying the group's overall profitability. Blending a new location's startup losses into consolidated numbers without flagging them makes the group's overall trend look worse than the mature locations actually are, and can mask whether the new location itself is tracking ahead of or behind plan.

Once a group is deciding whether to add a fourth or fifth location, that decision should be grounded in the actual ramp curve prior locations followed, not a generic industry assumption pulled from a franchise pitch deck or a peer's anecdote. A fractional CFO who has access to clean historical ramp data for every prior location opening can build a defensible new-location business case; without it, the decision is closer to a guess dressed up with a spreadsheet.