What Is Due Diligence in Dental Practice Sales?

Due diligence is the buyer's investigation of your practice before closing. It's their opportunity to verify everything you've represented and identify any issues.

Due Diligence Timeline

Typically takes 30-60 days after signing Letter of Intent.

What Buyers Examine

Financial Review

• Tax return verification
• Bank statement reconciliation
• Production/collection analysis
• Expense verification
• AR aging review

Chart Audit

• Random patient chart review
• Treatment plan documentation
• Radiograph quality
• Note completeness

Legal Review

• Lease terms
• Employment agreements
• Contract assignments
• Regulatory compliance

Operational Review

• Staff interviews
• Systems evaluation
• Equipment condition
• Software functionality

How to Prepare

• Organize documents in advance
• Be transparent about issues
• Respond quickly to requests
• Make staff available
• Prepare explanations for anomalies

Common Issues

• Declining collections
• Short lease remaining
• Key person dependency
• Incomplete records

Bottom Line

Due diligence protects buyers and validates their investment. Prepare thoroughly, be honest, and respond promptly. Transparency builds trust and prevents deal failure.

Due diligence preparation? Contact DentalBridge.