The Practicon Viewpoint by Ann Page Griffin

MODIFY YOUR MONTHLY PRACTICE MONITOR AND FINANCIAL STATEMENT TO KEEP TABS ON PRODUCTION WRITE-OFF

In one form or another, I assume you, Doctor, receive two items every month: (1) a report/monitor on basic practice data necessary for managing your practice and (2) monthly financial statements from your bookkeeper or accountant. Let’s consider what should be included in the Monthly Practice Monitor, with some recommended modifications to your Financial Statement.

The Monthly Practice Monitor should include:

• Gross production at full fee for all procedures delivered
• Collection percentage for gross production (Divide total collections by gross production. Recommended collection rate in full-fee offices is 97% or better)
• Net production (Gross production minus adjustments for managed care/PPO plans in which the practice participates, professional courtesy, charity dentistry, etc.)
• Collection percentage for net production (Divide collections from those patients by net production on those patients.)
• Total production adjustment in dollars
• Expenses (overhead) in dollars and in percent of collections
• Days worked; hours worked
• Production per day; production per hour—gross and net
• Doctor production and hygiene production
• Accounts receivable—current, 30 day, 60 day, 90 day, 120 day, in collections
• New patient appointments
• Recare patient appointments
• Total patient appointments
• Show rate (Percent of appointments kept as made. Divide the number kept by the number made.)

The monthly Financial Statement should be modified to reflect:

• Gross production—all services recorded at full fee
• Net production—gross production minus all adjustments (managed care/PPO plans, reduced fees for patients on government assistance, charity dentistry, professional courtesies, etc.)
• Collections
• Overhead costs grouped by seven categories: Personnel, Occupancy, Administrative, Equipment, Furnishings and Contingency Fund, Clinical Supplies, Lab, and Marketing
• Dentist(s) compensation
• Net profit

These changes to the Monthly Practice Monitor and the Financial Statement will facilitate practice management and alert the dentist and practice administrator to the amount of money being written off production and off collections. Additionally, it will provide a monthly report of overhead costs to allow more consistent overhead control.