Do you know the five key performance indicators (KPIs) you should be checking and how to leverage their roles in your financial health?
Much like how you would ask your patients to come in regularly for cleanings and check-ups to stay on top of their oral health, monitoring your practice’s financial health is important. When you know what metrics matter most, you can diagnose problems early — helping you achieve greater efficiency and profits. These five key performance indicators (KPIs) can help your practice stay strong and thrive, even in difficult times.
KPI #1: Active Patients
When you look at the total number of patients visiting your office within the past 18 months, you should see a steady increase from month to month. However, if you’re not tracking this KPI, you won’t see if your active patient trend is going down, along with your cash flow.
Your practice management software should help you track your active patients consistently. Once you calculate this KPI, set monthly, quarterly and yearly goals for increasing your base of active patients. Be sure to involve your team in this process so they can add a personal touch to encouraging referrals.
KPI #2: Active Patients in Hygiene
This second metric can provide a direct view into your practice’s financial health and may even predict its future: Knowing how many active patients visited for hygiene appointments in the past 12 months will give you an idea of how many appointments you’ll have over the next 12 months.
During hygiene visits, you can build relationships with patients that help your practice grow and you can see that growth when calculating this KPI. Keeping tabs on your active patients in hygiene will help you continuously build your practice by identifying when corrective measures are needed, instead of waiting six months and taking steps retroactively.
KPI #3: Production
Just because you’re busy doesn’t mean you’re making money. The production KPI can help you see the difference between busywork and work that contributes to the profitability of your practice. The two components of this KPI are your doctor production and your hygiene production. While measured separately, examining both components side by side can help you understand who’s doing what work and how much revenue to expect from your doctors and hygienists.
Your practice management software should help you focus on the production areas that boost your bottom line. Collaborate with your team to set goals for production for your practice as a whole and for each provider.
KPI #4: Accounts Receivable
Tracking this KPI for services rendered but not paid for can reveal whether your practice is living up to its profitability potential. How you manage your accounts receivable (A/R), especially your monthly production-to-collection ratio, determines your profitability, and yet many practices fail to compare their outstanding A/R to their production.
Use your practice management software to monitor your most important A/R figures — such as aging account balances — monthly. Work with your team to flag and follow up on balances more than 60 days overdue, and work with your patients to help them pay on time by setting up electronic and third-party payment plans. Don’t shy away from asking for payment for the valuable services you provide.
KPI #5: Schedule Optimization
This last KPI can help you find a way to make your schedule align with your financial goals. As the cornerstone of an efficient, profitable practice, scheduling should be about more than filling time slots. Managing your schedule effectively can minimize your team’s stress, increase patient satisfaction and maximize production.
Your practice management software should work to help you design your perfect day so you can fill your schedule wisely. Create customized scheduling blocks throughout each day to provide an outline for your scheduling preferences. Wise scheduling can lead to an increase in productivity, better work-life balance for your team and improved patient care experiences.
Practice Management Software You Can Trust
Designed specifically for dentistry, award-winning Dentrix practice management software by Henry Schein One can help you monitor the metrics that matter most. When it’s time to gather the KPI information you need — whether daily, weekly, monthly, quarterly or yearly — Dentrix offers an exclusive Practice Advisor Report that includes these five KPIs.
For more insights, download the full eBook “Master the Metrics That Matter for Dentrix.” Better yet, sign up for a free practice assessment today. Dentrix profitability coaches can provide guidance customized to your practice so you can make the most of your Dentrix practice management system to fulfill your practice goals for profitability and efficiency.