NITTY-GRITTY NUMBERS YOU MUST KNOW TO MANAGE YOUR PRACTICE

As every practicing dentist knows, certain practice statistics are measuring sticks, measuring success or problems in the management and profitability of a dental office.  The menu of must-know practice stats is variable, depending on how much or how little detail a particular dentist wants to know about the business aspects of his/her practice.

The following list is, in my opinion based on a 30-plus year career as a practice management consultant, the minimum amount of information needed to guide/manage a practice to sound profitability.  The final set of four bulleted points are items the dentist needs to see daily to keep an on-going check on the pulse of the practice, to assure proper record-keeping, and to avoid embezzlement.

ANNUALLY, you must know:

·         Break Even Point (BEP) – collections needed to pay total costs of operating the practice.  Remember, ONLY collected dollars can be spent.  (Read Practicon’s blogs during May; one of them will contain the formula for calculating the BEP for your practice.)

·         Dr.’s (Drs.’) compensation including wages (draw), taxes, and benefits

·         Net profit goal

·         Budget – based on projected collections for the year less write offs and refunds (net collections) and projected expenses (How to Write a Budget is the title of the article for June 2015---watch for it.) 

ANNUALLY and MONTHLY, you must know:

·         Production annually, monthly, daily, hourly, year-to-date (YTD), and last-year-to-date (LYTD)

·         Collections annually, monthly, daily, hourly, YTD, and LYTD

·         Collection % YTD (collections production) – 97% minimum goal

·         Number days worked; number hours worked

·         Expenses in dollars and as % of collections

·         New patients, not including single visit emergencies who never return for a comprehensive examination

·         Number of inactivated patients; most frequently given reasons for leaving

·         Recare system effectiveness – goal - 70% to 80% of active patients returning regularly  for Recare  (# of Recares seen in past 12 months of active patients)

·         Treatment acceptance ratio when compared to case presentation (treatment delivered  treatment recommended) – goal - 85% to 90%

·         Show rate - % of kept appointments (appts. kept as made appts. scheduled)  Average is 80% - 85%; goal is 90% to 95% in General, Orthodontic and other specialties practice.  Average is 75% - 80%; Goal is 85% - 90% in Pediatric Dental practice.

·         Aged accounts receivable – maximum total is 1 to 1½ months’ gross production

·         Accuracy of budgeted projections for production, collections, and expenses; analysis and justification for over-spending and under-spending

DAILY, you must know: 

·         Production

·         Collections – over-the-counter plus mail – goal 35% to 50% of that day’s charges

·         Bank deposit

·         Adjustments and write offs

·         Total number of patients scheduled

·         Total number of patients seen

·         % of patients seen (show rate)

·         Referrals made or received

·         Total number of broken or cancelled-not-rescheduled appointments (BAs and CAs)

·         Total number of BAs and CAs rescheduled

 

Items on Dr.’s desk daily:

·         That day’s schedule with all broken and cancelled appointments, emergencies, and walk-ins noted with copy of sign-in sheet attached if one is used.  Tomorrow’s schedule.

·         Day sheet with production, collections, including electronic or mail receipts, and patient account balances noted

·         Daily Activities Form with number patients scheduled for treatment and for hygiene, show rate for treatment and for hygiene, % of production attributed to treatment and to hygiene, number of BAs and CAs rescheduled

·         Bank deposit