No matter how passionate you and your team are about providing world-class oral health care, your office is a business. To keep the doors open, you need payments just as much as you need patients. But you know – like many other entrepreneurs with complex overhead, plenty of inventory to manage, and constantly shifting expectations – the devil is in the details.
Just like understanding the cause and effect of a cavity leads to better care, being comfortable dissecting the numbers that make up expenses or cash flow are integral when planning for the future. Not being a major in medical school, business owners, operators, and entrepreneurs learn important lessons throughout the years about earning dollars without bulking up expenses. Revenue management is more than balancing line items in a spreadsheet. It’s about understanding the core strengths of your business, and how one or two smart investments can generate years of stable growth.
For this guide, we’ll dig into understanding the analytics and data your business generates, while keeping an eye on cost cutting, and the software and services that make it all possible.
The argument is simple: your dental practice needs to take in more money than it costs to keep going. How you chart those numbers across weeks, months, quarters, and years is revenue management. Depending on the size or scale of your practice, you may classify and understand your revenue as several different things. That said, there are key indicators that all growing practices need to carefully watch.
Whether your practice is one or two people, or a collection of multiple locations, you should know what percent of each day is a chair in use. How often do you complete premium or add-on services? How much are you spending processing each of your payments?
Tracking this much information isn’t necessarily easy, but there’s a rich tradition of using the data and analytics that every business creates to help build a stronger, faster growing practice. Practice management software that is tracking your inventory, while it updates your schedule, and collects payments can offer a glimpse into the mathematics that keep the front door open and your staff paid.
For larger practices, the way you slice up those costs or classify your income becomes one of the biggest indicators for measuring growth. Even if you’re a practice of one or two, you can take many of these lessons to understand what makes their own office tick.
What separates the dental practices that get by from those that flourish is understanding of how costs are driven within a practice. For example, you might be thinking about adding another chair to the office, or hiring a type of specialist to increase the number of patients you’re capable of seeing in a given day. Understanding the efficiency and usage of your current production can tell you whether another employee will be as effective to the bottom line as a few changes around the office.
We’ve built a guide for beginners and intermediates that dives deep into the theory behind business analytics and how to translate them into smarter choices.
Crunching numbers and processing accounts payable typically don’t top the list of reasons people become dentists. Though it can be easy to offload an envelope of receipts on an accountant, it doesn’t offer much in the way of insight into your operations. You and your staff understand how your business functions, and you’re the best suited to providing context to your revenue, what you need is software that can crunch the numbers, and give you easy-to-understand answers.
There are plenty of software options for any manager or dentist interested in learning more about staying in the black. We may be a little biased, but we absolutely believe that a fully integrated, all-in-one software can collect and organize your practice’s information far better than any singular software. While certain companies will tout their wide range of integrations, all-in-one software speaks frequently and fluently with its counterparts, leaving no stone unturned. Aside from providing greater business intelligence, the investment can quickly pay off.
Every experienced dentist and oral health care provider knows that what’s on the surface doesn’t always represent what’s hiding underneath. Focusing on the behaviors of your business, while scrutinizing what may have been taken for granted is simply how you grow. That growth can’t happen without a critical look at the procedures that can be improved.
Some of these procedures are literal – if you find that two procedures both take about 90 minutes, but one is even 15% more profitable, you can shift your focus and enjoy the immediate growth in revenue.
Other procedures can be tough pills to swallow, like realizing a particular task like scheduling or invoicing are costing you more money than they’re worth. This is especially true when you uncover a missing payment… or ten-thousand.
Is it time for your practice to take a closer look at itself or its numbers? We have a few articles that other practices have found helpful: