Mid- Year Financial Report. Where Do You Stand Today?
July 27, 2012
We are half way through 2012! Hard to believe I know! Are you on track with your financial goals for this year?
Maybe you are questioning, what financial goals?! And maybe you answered “Yes, I have already reviewed my numbers and I know exactly how I compare to last year!” Or maybe you answered, “How can I be expected to review financial goals when I am at the office all day and working on patients?!”
No matter how you responded to this question, you will appreciate the sensible steps about how to improve your financials and proven steps to success.
No matter which of the above listed groups you fall into, I have outlined a few steps for you to hit your financial goals this year. In fact why not plan to add an increase to your numbers without adding more stress or time to your day?!
- First step is to run your YTD income and expense statements
- Run your software reports; year to date (Dentrix has the ability to run previous year so you can compare)
- Compare your current performance YTD report to your previous YTD report
- Identify opportunities and challenges to achieve End of Year goals
a. Develop processes to achieve Year End goals
- Schedule team meeting to promote collaboration
a. Ask your team to problem solve and assist in development of solutions
- During last quarter schedule team meeting and repeat above steps
There are many ways to increase your income. Some dentists will increase fees although during this economic climate this can create more challenges and you may lose many patients. Other dentists will choose to lower employee salaries or cut back hygiene hours and days.
If you want your revenue to improve you need to look at all the details of your profit and loss statement. It is not as easy as increasing fees nor cutting salaries and days of hygiene. Many dental practices have numerous cancellations but are making more money seeing fewer patients and working less days. One way to identify increased production is to provide more preventive services. Many of the clients of Dental Practice Solutions have implemented the preventive services through valuable communication skills. This has benefited the patients overall health and the financial health of the practice’s although an economic decline occurs in our world today.
Here are the steps to take:
- Run Your Profit and Loss Statement
Run your profit and loss report which will provide an overview of your current financial picture. This is where you can compare employee salaries, leases, equipment, etc., etc. This provides a black and white report providing a true financial picture YTD. Run this statement From Jan 1, 2011 – June 30, 2011 and compare to Jan 1, 2012 – June 30, 2012. When you look at these two years and compare, now you have a better idea of where your last half of year goals truly need to be to accomplish your Year End goals.
- Run Your Half Year Software Reports
Many of Dental Practice Solutions clients use DENTRIX software. If you use Dentrix you will go to Office Manager and select Practice Analysis. Now you can run a detailed production report for each provider in your practice. This will allow you to analyze the procedures, who has provided the various procedures, how many and the amount of production from these procedures they have provided for the practice. Once you have this information you can analyze the trends and discuss with the team at the team meeting you have scheduled at half year meeting and again at the end of year team meeting. This is a great time to discover how many of the procedures you most desire providing patients, have been completed. If you enjoy providing veneers or implants, now is a great time to assess how many you have provided and what you may need to change (Are you communication skills effective? Or do you need to review other third party payer information for patients to use and easily pay for treatment?)
- Compare your Current Performance YTD Report to Your Previous YTD Report
Be sure to use these benchmarks: Collections should be at 98% or >, Employee expenses 22-33%, Lab expenses 8-12%, Marketing 1-3%, Facility expenses 4-8%, Minor expenses 6-10%, General expenses 6-10%. The total expenses should be no higher than 75%.
Once you have a spreadsheet (Excel) designed with these expenses listed out, total the amounts spent and compare to your total collections. This is how you will calculate the % you have spent for each of these areas to run your dental practice. Now you can use your P&L to discover if you are on track to accomplish your financial goals. Which areas do you need to adjust and prepare a system to improve these areas that need adjustment?
- Identify Opportunities and Challenges to Achieve End of Year Goals
In reviewing one of our clients (Became our clients Jan 2012) financials mid-year we discovered that her employee salaries are 50% higher than one year ago. It is now time to sit down to discuss why this happened and how to get on track to accomplish the year end goals. Possibly, you have moved to a new location or you have taken out a loan in the past year. If you lease expense (Facility expense) is now 10% instead of 8%, you will need to adjust your goals for the year end and discuss a way to close the gap for the year end goal to be met. Maybe your collections are down this year. It is time to create a new system to increase collections. If insurance payments are behind you may want to discuss using the collection services of Trojan Professional Dental Services.
We teach our clients how to implement preventive and same day services. These have proven to be great ways to improve patients’ health, add value to your services, WOW patients and improve the financial health of your practice.
Our offices have also implemented team bonuses based upon the bonus system. This provides improved team collaboration and definitely improved team spirit!
- Schedule team meeting to promote collaboration
As a team these changes will be much easier to implement. Plan a half day or even full day, off-site and have everyone on the team come with ideas to create change. Have a time for them to express their challenges and concerns. Ask everyone to provide ideas for success.
At the end of year, it is a great time to not only have a Holiday Party but a time to go outside of the office for a Success Celebration and also a time to plan out the next year’s success. Each year plan to have 2 major team meetings. These need to be at least 4 hours in length and it can be a great idea to add some fun to a meeting which can be thought of as boring or monotonous
- Schedule Your End of Year Team Meeting and Repeat All of the Above
Plan a time in November and December to sit down as a team and plan for a great year in 2013. What do you need to change or continue for added success in 2013? This is a great time to CELEBRATE your success in 2012!
At the end of year in 2012 and every year to come, run these reports and repeat the steps outlined above. This is how you will run a financially success dental practice. Two times each year you will follow these steps and sit down as a team to collaborate your plan for success. If you do not take time to plan than you have planned to fail. There is no other way to put it so plan now for your future success!