Article Series Introduction
Your practice is a business, and you are the CEO. Your income depends on efficient, honest practice operations, and above all, you must ensure that your assets and livelihood are safeguarded. This article series suggests some easy ways to question or refresh your practice management style to prevent inefficiencies, mistakes or even fraudulent activity. Using these suggestions, you can respond to new discoveries with better business strategy, and above all, reinforce management tactics that can help meet your profitability objectives and empower staff to do their best work. When you’re getting started, the SafeGuard Accounting Apps team is always available to answer questions.
Article 1 of 3: Business Edition
Know Your Practice Operations
Your office manager probably already creates reports in your practice management software that debrief you on the day’s performance—production, collections, etc. If not, schedule your Dentrix or OMSVision software trainer for one-hour web sessions. Use your practice management system’s automation features and understand how the systems work—and their limitations. You do not have to be the doer, but you need to understand how things are done and what the results mean. You should not allow yourself to be dependent on an employee if a decision is ever immediately required from you.
You can check out the reporting tutorials on your software’s website and start now–this information is your livelihood. You should be able to identify mistakes or fraud, and you can never be too tired or busy to review these details. If you’re not sure what business metrics matter, or how to tell the difference between a mistake and deliberate fraud, it’s easy to get started.
Know Business Metrics that Matter
There is endless information available to help you run your business. Here are some slightly more sophisticated questions you can ask yourself (and your practice managers/financial coordinators) to get a deeper sense of your business health and trajectory. The answers to these questions make it possible for you to pivot any business decision—your marketing, staff education, practice flow—to better serve your patients, increase profitability and compete in your community:
- How does this month/year compare to the last one? Consider: production, collections, new patients, new referrers …
- Number of new patients attracted – and how they found you
- Treatment acceptance – and sales tactics that work
- Recurring visit revenue – how much is an existing patient worth to your practice? This is important when considering new marketing tactics or services.
- New patient revenue – how much is a new patient worth to your practice, taking into account what it costs to attract new patients
- Value of your top referrers – people, places and/or advertising. Referrer mix is always complex, but you should know your top 10 referrers and incentivize them accordingly (or increase marketing investment in advertising that returns patients who accept treatment).
To understand what metrics matter in a successful practice, begin by benchmarking your current operating results against the standards. Professional organizations, your CPA or your practice management consultants can be resources for you to obtain your industry standards. This includes knowing the indicators or “Red Flags” that may require further investigation.