Accounting systems and financial statements provide you with valuable information about the financial health of your practice. It is important to know what the numbers mean, how they affect your practice and what you can do to make improvements .Numbers with context, meaning and action plans are the keys to long term sustainable success.
Erosion of practice management systems may occur silently and go unnoticed. Dental management systems must be responsive to the changing market place and proactively direct the actions of the people within your office. Recognize the hidden signals, identify the causes, and correct the breakdown of your systems quickly to protect your practice from long term effects of economic downturns. Uncover inefficiencies that may exist, discover opportunities for improvement and take action now!
The Appointment Schedule
The appointment schedule is the beating heart of your practice. When the schedule falls apart, everything else follows. Having warm bodies in the chairs receiving treatment is the only source of revenue generating activity in your practice – everything else generates expense.
Is your staff taking proactive measures to prevent no shows and short notice cancellations? If you have just two cancellations per day in your hygiene columns, your practice could be losing between $72,000 – $96,000.00 per year.
Often I will hear receptionists say, “well, everyone is sick” or “it’s just the time of year, what are you going to do?” . Good question! What are you going to do? Maintaining the appointment schedule is challenging, but it is the job of the team to focus and work on the schedule to get it filled. The alternative is much worse.
Practice Collections – Turn Your Accounts Receivable into Accounts Received
It doesn’t matter how much you are charging if you don’t collect the fees for your services at the time of service. Accounts that are over 90 days outstanding are considered uncollectable. After all, the patients who still owe you money 3 months after they have received your services, have no intention of paying you. That doesn’t mean that you should write off all of your 90 day accounts, it simply means that someone needs to focus on this process and be accountable for the results.
Identify one team member take control of the accounts receivable,. If there are accounts that have been outstanding for over 90 days, make those accounts a priority. The key to collections is everyone on the team needs to believe in the services and the fees and collect the fees at the time of service
Elevate Your Hygiene Department
Most cancellations and no shows occur in the hygiene schedule because your patients don’t see the value in dental hygiene appointments. When you tell patients that they need a “cleaning” appointment, there is no sense of urgency and patients think that it can wait – “it’s just a cleaning!”
Dental hygienists are not teeth cleaners!! They are highly trained, registered, regulated dental therapists, who prevent disease, promote healing, improve the overall health of the patient, etc. You must believe in your own value before your patients will.
Hygiene coordinators must change their semantics to reflect the value of the hygiene appointment. Never say to a patient, “I’m just calling to remind you that you are overdue for a cleaning”- saying the word “just” it minimizes the value of anything else that you have to say so the patient has stopped listening.
Here is some scripting that they can use:
“Mrs. Smith, you need to return in 3 months. Will you please reserve the time in your schedule, as I am reserving this time for you. If you would like a courtesy call, our receptionist, Jane, will be happy to call you two business days in advance of your appointment. If you do need to change this reserved appointment, will you please give Jane a call at least two business days in advance of your appointment and she will be happy to find a more convenient time for you.”
Overhead Expense Control
A well run dental practice should operate at between 50-60% overhead expenses (based on gross production before taxes). Monthly dental sundry costs (consumables) should not exceed 5% of monthly production and staff costs should range between 20-25%.
The best way to decrease expenses is to increase revenue. The best way to increase revenue is to have patients booked in the schedule, who keep their appointments, value your services and who are on active recall. When you increase the revenue and collections of your practice, all of the benchmarks for success will align.
Human Resources Management
A good human resource performance management system with clear goals and measurable objectives will increase accountability and help your employees feel connected and committed to your success. Striking a balance between being involved with your team members enough so they feel your direction and support isn’t easy Employees want to be treated as people first and workers second.
One easy way to stay connected and keep the lines of communication open is to conduct daily (starters). Hold daily morning huddles at the same time every morning to ensure team communication that results in achieving production goals or system improvements. When you regularly connect with your team members, your environment will become motivating and encouraging. Happy employees affect the bottom line
The key to improving your bottom line and increasing your profitability is a three step process:
1. Empower yourself by keeping your eye on the numbers. Establish an operating budget and focus on what is most important to you and your practice. When you see a system that is slipping, take proactive measures to correct the system now.
2. Empower your patients to make good informed decisions. Reinforce the value of your services by using powerful communications. Confidently recommend treatment that is patient specific, patient centered and not insurance driven.
3. Empower your employees. Provide them with the time, tools, training, technology and trust to help them commit to your patients, your practice and their own personal fulfillment.
To make sure that your management systems are running at maximum efficiency and effectiveness, check them often and look for the hidden signs of erosion. Make any necessary adjustments quickly and your practice will run like a well-oiled and well maintained machine that will reward you with many years of sustainable growth and profitability.
