What are your goals for your practice in 2021? Do you want to grow and be more profitable? That tends to be on most dental practice’s goals list.
The issue is figuring out the best way to do that. Most dentists believe that by increasing production, they will become more profitable. While there is some truth to that, it is not the best way to grow a practice. The key is to focus on maximizing the revenue you’re already bringing in.
Increasing your production won’t affect your profitability if you don’t have solid systems in place. The problem a lot of dentists have is not that they need more patients. It’s often their collection percentage that’s at fault.
Your collection percentage is the percentage of funds that you not only produced but also collected. For your business to be profitable, this number needs to be as close to 100% as possible. Unfortunately, oftentimes it’s not anywhere near that.
How do you figure out where the money is falling through the cracks? Here are five key areas to check.
1. Investigate your adjustments.
Oftentimes, we don’t realize how much money we are throwing away just through adjustments. You should be taking a look to calculate how much money you are adjusting and determine if it is worth it.
How many times do you give discounts to friends and family or people in your community?
Be honest when analyzing your adjustments. Are you giving away too much?
2. Check your statements.
Are your statements being sent out efficiently? Our practices can get so overwhelming, and sometimes we forget to send out our statements for a while.
Your patients could be waiting on their statement for weeks and months and even forget about it altogether. They could be perfectly happy to pay, but they aren’t even aware of it.
If you’re looking at your collection percentage monthly and see that it’s dipping, this is one of the metrics you need to check.
3. Appoint someone to deposit checks.
If you have checks coming into the practice, are they being input in a timely fashion? Is your team busy doing other things that they don’t even have time to get to the bank?
Make sure that you have a specific team member who owns this process and a system for reporting on it regularly. This will ensure that your checks are getting deposited and you aren’t taking time away from your dental teammates.
4. Consider your electronic payments.
Maybe you have e-payments coming in, but they aren’t being entered onto the ledger. This means there’s a discrepancy between your bank statements and your practice management software.
When you analyze your collection percentage you may realize there’s a difference between your production and collections.
From there, you can look into why these discrepancies are occurring and fix them.
5. Take a close look at your fees.
It is possible you aren’t charging enough for procedures.
It can be shocking to calculate your profit margins for each of your different procedures.
Calculate your expenses and divide your monthly expenses into the number of hours you work. That will give you a cost per hour.
Then, you can look at the time it takes to do each procedure and how much the supply costs are. If you aren’t making a profit, or breaking even, there is an issue and you know to raise your fees.
Are you ready to grow your practice and become more profitable?
Make sure your money isn’t slipping through the cracks. You don’t have to get more patients and work overtime to increase your profitability. Make sure to check those problem areas to ensure you aren’t giving away money.
If you’re looking for training or coaching for your team to accelerate your growth, click here to learn more.