Key Numbers to Help You Understand the Financial Dynamics of Your Practice
Dealing with financial statements and numbers can be daunting. It can be helpful to focus on these key numbers when assessing the financial dynamics of your practice:
- Financial Statements ($ Numbers)
- Balance Sheet
- Income Statement
- Statement of Cash Flows
- Statistics (Non $ Numbers)
- New Patients
- Subsequent Visits/Retention
Key Questions for Financial Assessment
- Did you establish financial goals for yourself (e.g. number of new patients, number of patient visits, gross billings)? If so, have you achieved them? If not, how close were you?
- How much does an average patient visit cost you?
- What percentage of patients follow through with their recommended treatment schedule?
- What capacity is your clinic running at?
- Have you prepared a budget for your clinic? Are you on track?
- Can you pay your bills on time or do you rely on credit?
- Are you profitable? After all expenses are paid, are you left with 50%?
New Patient Tracking Assessment
Patient tracking is essential to understanding how you are receiving new patients, why patients are leaving and how you can promote your practice effectively.
Since you cannot measure everything all the time, choose some key signs to monitor and use as an early warning system. These may include:
- New patients
- Tracking trends in patient growth
- What kinds of referrals do you receive? Are your referrals growing to the level you’d like?
- Patient visits
- Are patients following your treatment recommendations?
- How much does each patient visit cost you?
- Why and when are people leaving your clinic?
- How do patient visits compare to your treatment recommendations?
- What is your patient retention after key points such as the initial visit or the initial treatment period?
- Are patient complaints being addressed?
- Cancelled/missed appointments
- Why are people not showing up?
- Are you fitting into their schedule or are they fitting into yours?
- How much are you giving away? How much can you afford to give away?
- How busy are you?
- Should you be planning for growth?
- PMP reports
- Are you using your software as a planning tool?
- What are you doing with your reports?
- Patient complaints
- Staff turnover
When to Expand
It’s important to monitor how busy you actually are, rather than focusing on how busy you feel. If you have 30 hours available per week for appointments, how many of those hours are actually booked? Once you reach 80% utilization, it’s time to think about expanding capacity. Your strategies to expand your capacity may include:
- Adding more practitioners.
- Delegating more tasks to your staff.
- Reviewing your facilities and procedures.
- Adjusting your appointment schedule.
- Increasing your fees.
- Dedicating specific times for intake of new patients.