Monitoring the Month
Being the business director of three dental practice locations does not mean I have to be at all three at once. However, it does mean I must know the health of the practices at all times. Accomplishing this takes communication and organization. At each location, office managers and dentists monitor the daily operations. I check in with them weekly to get an idea of the pulse in each practice. During our “Weekly Status Update,” we review what is working well, what’s challenging, action list items, and the next week’s schedule.
Early on, our accountant and financial planner instilled the importance of monitoring our monthly progress, looking at trends, and identifying successes and issues as they arise. Here is our recipe for monitoring a thriving and growing practice!
- Start with a monthly production and collections goal.
Both pieces of the receivables puzzle should be considered as one. There tends to be more focus on production, but without collections, all that hard work in the treatment room means nothing! I consider the average of these two subtotals to be our final number for the month. Equally important is the percentage of collections in comparison to production. We are overachievers and average over 100% on an annual basis.
- Compare your production and collections from the same month the previous year.
Looking back on where you were a year ago is a great way to see if your practice is moving in the desired direction.
- Review production per dentist.
Based on your monthly production goal and the experience of your dentist, determine a goal for each dentist in your practice. We review the dentist’s total production and the average daily production each month.
- Separate out specialty services like orthodontics or implants, which usually come with higher lab and supply costs.
This allows you to truly investigate how the progress of these procedures is trending. I also suggest that you separate the services in your expense reports in order to take a deeper dive into profit.
- When looking at hygiene production, review the total production for all hygienists together, as well as the average daily production of the department.
If you see a decline in the average daily production, you’ll want to look at the individual hygienist’s KPIs to see if you can identify an issue.
- Adjustments or write-offs to production and collections should be very closely monitored.
Adjustments to production should be properly categorized with detailed explanations. Adjustments to collections would be patient or insurance refunds, bank fees, processing fees, etc. Remember, the number your practice management software shows you collect is not necessarily what is hitting your bank account.
- Most dentists and managers are obsessed with new patient numbers.
I would agree that new patients are very important, but do not forget to watch how your active patient number fluctuates. Make sure your concentration on new patients does not allow existing patients to leak out the back door. And do not forget to note where your new patients are referred from! Also, double-check your active hygiene patients in comparison to your active patients. Those patient numbers should be fairly close if you are encouraging your patients to keep up with their recare.
- Accounts receivable should be monitored in several different ways.
Review your overall total, the breakdown by days past due, and the average days it takes to collect. Set your goals based on the number of insurance patients in your practice.
- Review the percentage of dentist and hygiene production.
Since we also offer orthodontics, our goal is 60% dentist, 10% ortho, and 30% hygiene.
- Encourage your providers to monitor how productive they are per visit.
An increase here can mean a decrease in overhead.
Our business managers compile reports after the end of each month, just like other practices do However, please do not just calculate the numbers or print the reports! Success lies in the review of the reports and understanding their impact on your practice. Schedule a time to truly monitor your practice each month. You will not regret it!
About the Author
Brittany Allen, a lifetime member of AADOM since 2014, grew up in East Texas and earned an interior design degree and MBA from Baylor University. Brittany is the business director at Allen Family Dentistry, which has three locations. She received her FAADOM (AADOM Fellow) in 2020, MAADOM in 2023, and serves as the president of the East Texas AADOM Chapter. She’s been married to Brandon (AKA Dr. Allen), her college sweetheart, since 2002, and they have two children, Brynn and Bridger. Brittany enjoys traveling, shopping at flea markets, playing tennis, and snuggling with her three Persian cats.