You ask your patients to commit to twice yearly check-ups to maintain optimal oral health. Are you making the same commitment to your dental practice? Sure, you’re not focusing on oral health; rather, something much more important: your practice’s financial and managerial well-being. By the time you read this, summer is already half over, which means 2018 is half-way done. How is your dental practice doing?
Missed our January 2018 post on A Dentist’s New Year’s Checklist? Read it here.
Have you been keeping track of how many new patients per month you’re adding to your practice? You should be. Dentists need an average of 25 new patients every month, per doctor, to maintain a robust pipeline. Remember that your patient base is one of your most valuable assets; nurture it. You should also track how much it costs to acquire a new patient, the referral ratio, and conversion rate – the rate of new patients who accept treatment. Aim for an 80-90 percent case acceptance rate.
In a previous post, we told you how to improve the bottom line through strategic overhead management. In it, we provided the average percentage that each major revenue grouping should take up. These included:
- Labor 27%
- Facilities 5-7%
- Clinical 10-15%
- Marketing and advertising 2%
- Other 7-10%*
*bank charges, office supplies, lab expenses, and other miscellaneous expenses
You should also track your accounts receivable aging report. Know how many accounts are overdue, by how long, and have a plan to bring the past due balances current.
Other numbers to track include daily and monthly production, appointment cancellation rate, dentistry to hygiene production, hygiene production to hygiene wages, and total overhead costs.
If your numbers are significantly off (or you’re not tracking them regularly, if ever), you’ve got some homework. The good news is that even small changes to some of these areas can produce big gains.
For dentists and their staff alike, you must invest in continuing education to remain at the top of your game and learn new skills. When was the last time you attended a conference or training session? What about your staff? If there are services or procedures you could be doing in-house but aren’t yet qualified to do, make a plan for who you’re going to train and when. Ideally, your training is divided between in-office seminars, online learning, and on-site conferences, depending on how in-depth the topic is, the availability of training, and of course, your budget.
Don’t overlook the soft skills in continuing education, either. As the dentist owner, you’re responsible for leading and motivating your team. Do those skills need polished? What about your communication or interpersonal skills? The best leaders identify areas where they can improve and take steps to do so.
Look at your dental practice from an outsider’s perspective. What shape is it in? It might be time for an update to your reception area or operatory rooms. If you have any equipment that might need replaced or repaired, make a list. There are tax consequences of selling or buying capital assets. This includes computers and software. Lastly, do you still fit in your current space, or are you starting to outgrow it? Depending on many factors, not the least of which whether you rent or own your office, you may be able to add another operatory room where you’re at. Or it may be time to relocate and upgrade.
Last but certainly not least, a mid-year practice check-up wouldn’t be the same without your dental CPA! Call us for an appointment to review your mid-year taxes, revenue, and projections. We can help you make the most of the remaining six months in 2018, whether it’s keeping an eye on tax breaks or helping you solve practice management issues. Contact Dental CPAs today.