It's Thursday in a mid-size dental group. Two big insurer batches cleared late. Wages still go out tomorrow. Lab invoices are sitting on the desk. The BAS remittance window is on the calendar in a few weeks. The P&L for last month looked respectable. The available balance does not feel like "respectable."
That gap is why practice owners ask about a cash buffer. Not as a lifestyle fund. As working capital that absorbs lumpy receipts while fixed outflows keep their own timetable.
I treat the question as weeks of known outflows - wages, super rhythm, key suppliers, rent, and near-term activity-statement style remittances - not as a slogan about sleeping well.
A cash buffer, in the way I use the phrase with owners, is cash you can actually use that sits above day-to-day float. It exists because practice cash is uneven: patient or client receipts cluster, insurers pay on their cycle, and private fees arrive when they arrive. Outflows are less polite. Wages and super don't wait for the slow week. Neither do rent or the larger supplier runs.
Profit can look fine while the buffer is thin. Cash timing and profit are related conversations; they are not the same one. Here the only job is sizing the cushion that keeps the practice operating when receipts bunch the wrong way for a few weeks.
Illustrative only: some owners aim for roughly 4-8 weeks of fixed outflows in accessible cash. Others in lumpier specialties talk about something closer to 8-12 weeks when a single payer or a quiet clinical month can move the needle hard. Those are observation ranges from conversations - not a prescription for your entity, and not a promise that any particular number is "safe."
When I sketch buffer with a practice owner, we usually count the same buckets:
Wages. The regular payroll cost for the clinical and admin team - the amount that actually leaves on payday.
Super. Under today's payday-tied rhythm for many employers, super sits closer to wages than to a dusty quarterly pile. Include the contribution pattern you actually fund beside payroll, not a historical mental model.
Key suppliers. Labs, medical supplies, brief counsel, software that is mission-critical, and any other vendor that stops the work if unpaid for long.
Occupancy and non-negotiables. Rent or equivalent, insurance instalments you know are coming, and similar fixed costs.
BAS-style and tax remittances you can see. GST and related activity-statement amounts that are already visible on the calendar. I'm talking about known near-term cash exits - not inventing a tax plan in this article.
Add those into a weekly average for a normal operating month. Then look at available cash after the next wage run (not the peak balance the day after a big receipt). Weeks of buffer ~ available cash / weekly fixed outflows on that definition.
Example sketch: a legal practice with about $48k of wages and super-related outflows each fortnight, $12k a week in rent and critical suppliers, and a known ~$38k remittance in five weeks. If you smooth the remittance across the period and land near $40k of fixed outflows per week, then $240k of usable cash is about six weeks on that narrow maths. Change one assumption and the weeks move. That's the point of doing the arithmetic on your list.
A full book is not the same as smooth cash.
I've sat with owners at about $1.8M-$6M turnover who felt "fine" at two weeks of outflows until a single slow insurer cycle overlapped a wage week and a supplier catch-up. The business wasn't failing. The buffer was sized for a smoother world than the one they operate in.
It is not a personal emergency fund lecture. Business cash and household cash are different jobs.
It is not a product recommendation. I'm not steering you to a particular account type, offset, or facility in this piece.
It is not a guarantee that a chosen number of weeks prevents every squeeze. Lumpy practices can burn buffer faster than a tidy spreadsheet predicts.
It is also not the same as unused overdraft headroom you would rather not touch. Some owners count facilities separately as a backup layer; others want the buffer to be cash they already hold. Either way, be honest about which definition you're using.
Bring those to your bookkeeper or the person who runs your cash view. The aim is a shared definition, not a motivational poster.
If your practice keeps surviving on timing luck, that's information. A buffer sized in weeks of real outflows is usually clearer than a round cash target copied from someone else's industry chat.
If you want a second set of eyes on how many weeks of wages, super, suppliers, and remittances your practice is actually holding, reach out through Full Cycle Accounting and we can build the sketch from your numbers.
This is general information only and doesn't take into account your objectives, financial situation or needs. Before acting on it, consider whether it's appropriate for you - or talk to me about your situation.
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