The Practicon Viewpoint by Ann Page Griffin

CALCULATING SCHEDULING GOALS VS PRODUCTION GOALS VS COLLECTION GOALS

BE SURE YOU CONSIDER ALL THE FACTORS

The most successful dental practices set and work toward specific financial goals—scheduling, production, and collection goals. The show rate (the number of appointments kept divided by the number made) and the collection rate (percentage of production actually collected) affect these goals dramatically. Consider the following calculation:

• $1,050,000 annual collection goal, calculated by adding:
• Overhead costs, plus
• Dentist's compensation, plus
• Debt service, plus
• Desired profit for doctor/owner—return on investment (ROI)

Based on this annual figure, we can calculate the daily goals:

• $1,050,000 / 190 work days per year = $5,526 per day collection goal
• $5,526 per day collections / 95% collection rate (0.95) = $5,817 per day production goal

But here is where we also have to take the show rate into account. This is simply the number of appointments kept divided by the number of appointments made for any given period, not including emergencies, last-minute fill-ins, etc. For example:

• Out of 70 appointments scheduled for a period
• 59 appointments were kept, so
• 59 appointments kept / 70 appointments scheduled = 84% show rate

Now, considering an 84% show rate, we can calculate a scheduling goal:

• $5,817 per day production goal / 84% show rate (0.84) = $6,925/day scheduling goal

By now, you can probably see the potential problem:

• $6,925 per day scheduling goal - $5,526 per day collection goal = $1,399 per day disparity between scheduling, production, and collection goals.

Hopefully, this example will help you understand how overlooking an important factor, such as show rate, can have a serious impact on any calculated projections, and, most importantly, on practice income.


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