Dental Practice Due Diligence
Evaluate risk, validate opportunity, and understand the practice beyond the appraisal
A Clearer Picture Before You Buy
Know what you’re buying before you sign.
Buying a dental practice is one of the biggest financial decisions of your career. Before you move forward, you need more than a valuation - you need to understand whether the financial performance, patient base, operations, software data, and future cash flow support your goals as the new owner.
An appraisal can help estimate value, but it does not always show the full picture of how a dental practice operates day to day - or how it may perform under your ownership.
CFO of Smiles provides comprehensive dental practice due diligence for dentists across Canada. Our review combines financial analysis, appraisal review, practice management software insights, patient chart review, CPA-prepared forecasts with business plan, and lender-ready forecasting support so you can make a more informed purchase decision with greater clarity and confidence.
Our goal is not simply to confirm whether the practice has performed well in the past. It is to help you understand whether the practice can realistically support your financing, clinical style, ownership goals, and long-term growth plans.
When Dental Practice Due Diligence Is Right for You
This service is ideal if you are:
✓ Reviewing a practice opportunity ✓ Moving through the LOI stage ✓ Preparing for bank financing ✓ Unsure whether the appraisal tells the full story ✓ Trying to understand risk before committing to ownership
What We Review During Dental Practice Due Diligence
Financial & Appraisal Review
We review the financial information behind the opportunity, including historical financial statements, tax returns, production, collections, normalized earnings, overhead, working capital, debt obligations, and cash flow.
This helps you better understand whether the purchase price is supported and whether the practice’s financial performance aligns with your ownership goals.
Practice Management Software Review
Financial statements tell you what happened. Practice management software helps explain how it happened.
We review key practice reports to better understand production trends, collections, provider productivity, hygiene performance, treatment mix, recall effectiveness, scheduling utilization, accounts receivable, and patient activity.
Patient Chart Review
Patient charts can provide important insight into the health and sustainability of the practice.
Digital chart audits can be performed virtually, which allows CFO of Smiles to support buyers across Canada. If a paper chart audit is required, this service is available for practices located in the GTA.
Our review may include patient activity, treatment patterns, recall behaviour, patient retention, attrition, and future production opportunities to help assess whether the patient base supports the practice’s reported performance and future potential.
Operational & Transition Review
A successful acquisition depends on more than the numbers. We also consider operational factors that may affect the transition, such as staffing structure, associate agreements, lease considerations, scheduling systems, provider capacity, hygiene integration, and workflow risks.
These details can affect profitability, patient experience, and the first several years of ownership.
Cash Flow & Collections Review
Production matters, but collections and cash flow are what ultimately support payroll, loan payments, taxes, equipment purchases, and owner compensation.
We review the relationship between production, collections, accounting records, and bank activity to help identify collection issues, reporting inconsistencies, accounts receivable concerns, and other risks that may affect future cash flow.
CPA-Prepared Forecast with Business Plan
Banks require a CPA-prepared forecast as part of the financing process. CFO of Smiles prepares a CPA-prepared forecast with business plan to help support the lender review and provide a realistic roadmap for ownership.
Forecasts may consider your expected clinical schedule, treatment mix, staffing model, financing structure, transition timeline, growth strategy, cash flow requirements, and debt servicing capacity.
The goal is to help you prepare for financing while also understanding how the practice may perform under your ownership.
Why an Appraisal Is Not Enough
A dental practice appraisal can help estimate value, but it does not always explain whether the practice is the right opportunity for you.
An appraisal may show historical revenue, profitability, and an estimated purchase price. Due diligence helps you understand what is behind those numbers - and whether they are sustainable under your ownership.
For example, two practices may report similar revenue and profitability, but operate very differently. One may have strong patient retention, consistent collections, efficient scheduling, and healthy hygiene capacity. Another may have declining active patients, production concentrated in one provider, inconsistent collections, or growth opportunities that require significant operational change.
On paper, they may look similar. In practice, they may carry very different risks.
CFO of Smiles looks beyond the appraisal to help you understand the relationship between the financial statements, practice management software, patient activity, provider productivity, hygiene performance, collections, cash flow, and transition considerations.
The goal is to help you answer a more useful question:
Will this practice be successful under my ownership?
What You Receive
Our due diligence process is designed to give you a clearer understanding of the practice before you move forward. Every acquisition is unique, but depending on the practice, purchaser, and financing requirements, your review may include:
Digital chart audits can be completed virtually. Paper chart audits are available only for practices located in the GTA.
How the Due Diligence Process Works
Our process is designed to give you clarity before you move forward, while keeping the review organized, practical, and aligned with your purchase timeline.
Document & Information Collection
We begin by gathering the financial, operational, and practice information needed to understand the opportunity. This may include financial statements, tax returns, appraisal documents, practice management software reports, production and collection data, patient information, lease details, associate agreements, staffing details, and financing requirements.
Financial, Operational & Practice Review
Next, we review the information from multiple angles. This may include financial and appraisal analysis, practice management software review, patient chart insights, provider productivity, hygiene performance, collections, cash flow, operational considerations, and transition risks.
Digital chart audits can be completed virtually. Paper chart audits are available only for practices located in the GTA.
The goal is to understand not only what the practice has done historically, but how the business may perform under your ownership.
Findings, Forecasting & Acquisition Recommendations
Once the review is complete, we summarize key findings, risks, opportunities, and next steps. Where required, we also prepare a CPA-prepared forecast with business plan, lender-ready forecasting support, and strategic recommendations to help you make a more informed decision before closing.
The CFO of Smiles Difference
Buying a dental practice requires more than reviewing documents. It requires understanding how the financial results, patient activity, clinical production, operational systems, and future ownership plan all connect.
CFO of Smiles works exclusively with dental professionals and provides dental-specific due diligence support for buyers across Canada.
Dental-Specific Experience
Our team has reviewed over $233 million in dental practice appraisals and understands the financial and operational drivers that are unique to dentistry.
Because we work in the dental industry every day, we know how to connect the numbers to the activity behind them — including production, collections, provider productivity, hygiene performance, patient trends, practice management software, and operational workflows.
More Than a Financial Review
A traditional financial review may tell you whether the numbers are accurate. Our process is designed to help you understand what those numbers mean for your future ownership.
We look at the practice from multiple angles, including financial performance, appraisal assumptions, patient charts, software reports, cash flow, financing needs, and post-closing priorities.
Purchaser-Specific Forecasting
Your acquisition should be evaluated based on your ownership plan — not only the seller’s historical performance.
Our CPA-prepared forecast with business plan is tailored to your expected clinical schedule, treatment mix, staffing model, financing structure, growth strategy, and cash flow requirements.
White-Glove, Limited Capacity Support
Due diligence is detailed, time-sensitive, and highly personal to each buyer. CFO of Smiles provides white-glove support for a limited number of purchasers at a time so each acquisition receives thoughtful attention.
If you are reviewing an appraisal, preparing financing, or moving through the offer process, we recommend connecting early to hold your spot.
Planning to Buy a Dental Practice?
Hold your spot for dental practice due diligence support.
Due diligence is most valuable before you waive conditions, finalize financing, or move too far into the purchase process. If you are reviewing an appraisal, preparing an offer, or moving through the LOI stage, CFO of Smiles can help you understand the practice beyond the numbers.
Because our due diligence process is detailed, time-sensitive, and tailored to each buyer, we work with a limited number of purchasers at a time.
Hold Your SpotDental Practice Due Diligence FAQs
Dental practice due diligence is the process of reviewing the financial, operational, patient, software, and transition details of a dental practice before completing a purchase.
The goal is to help the buyer understand the business behind the numbers, identify potential risks, validate opportunities, and determine whether the practice can realistically support their ownership goals.
A dental practice appraisal can help estimate value, but it does not always explain how the practice operates day to day or whether the financial performance is sustainable under new ownership.
Due diligence goes beyond the appraisal by reviewing financial statements, practice management software, patient activity, production, collections, hygiene performance, cash flow, and transition considerations.
Before buying a dental practice, you should review more than the purchase price and historical financial statements.
A comprehensive due diligence review may include the appraisal, financial statements, tax returns, production and collection trends, practice management software reports, patient charts, hygiene performance, active patient trends, staffing structure, lease terms, associate agreements, cash flow, debt obligations, and future investment needs.
When buying a dental practice, it is helpful to work with a CPA or financial advisor who understands the dental industry, practice acquisitions, due diligence, practice management software, patient chart trends, lender forecasting, and dental-specific financial performance.
The right advisor should help you understand whether the practice can support your debt, clinical schedule, production goals, owner compensation, and long-term ownership plan.
Dental practices are clinical businesses, not just financial statements.
Dental-specific experience matters because production, collections, hygiene capacity, patient retention, provider productivity, treatment mix, recall effectiveness, and scheduling all affect the future performance of a practice. Understanding how those factors connect helps buyers see risks and opportunities that may not appear in the financial statements alone.
Patient chart review can help provide insight into the health, activity, and future opportunity of the patient base.
Digital chart audits can be performed virtually, which allows CFO of Smiles to support buyers across Canada. If a paper chart audit is required, this service is available for practices located in the GTA.
Chart review may help identify patient trends, recall behaviour, treatment patterns, patient retention, attrition, and future production opportunities. These details can help determine whether the practice’s reported performance is supported by real patient activity.
Practice management software can provide important insight into how the practice is performing.
Reports may include production trends, collections, provider productivity, hygiene performance, treatment mix, recall effectiveness, scheduling utilization, accounts receivable, active patient trends, and patient retention. These reports help explain how the financial results were generated.
A CPA-prepared forecast with business plan helps buyers and lenders understand how the practice may perform under the purchaser’s ownership.
Banks require a CPA-prepared forecast as part of the financing process. The forecast should consider the buyer’s expected clinical schedule, procedure mix, staffing model, financing structure, transition plan, growth strategy, cash flow needs, and debt servicing capacity.
A lender-ready bank forecast is part of the CPA-prepared forecast and business plan used to support the financing application.
It helps the bank understand projected revenue, expenses, cash flow, debt servicing capacity, owner compensation assumptions, and planned operational improvements.
You should book due diligence support as early as possible once you are seriously reviewing a practice opportunity, preparing an offer, entering the LOI stage, or beginning financing discussions.
Due diligence is most valuable before you waive conditions or move too far into the purchase process. Because CFO of Smiles provides detailed, white-glove support for a limited number of purchasers at a time, we recommend connecting early to hold your spot.
Yes. CFO of Smiles provides dental practice due diligence support for dentists across Canada.
Digital chart audits and virtual due diligence support allow CFO of Smiles to support buyers outside the GTA. If a paper chart audit is required, this service is available for practices located in the GTA.
Yes. Due diligence can help buyers prepare for the first stage of ownership by identifying risks, opportunities, cash flow needs, and operational priorities before closing.
A strong due diligence process can help inform your post-closing plan, including staffing, hygiene performance, collections, equipment investments, working capital, debt payments, and financial reporting needs.