Archive for October, 2012

What’s That ‘Little Raise’ Really Going to Cost You?

Saturday, October 13th, 2012

New dentists often look at a “small raise” and think to themselves, “What’s another buck-fifty an hour? S/he’s a loyal, hardworking staff member who has helped me establish my new practice.” That may well be the case, and you may sincerely want to give the raise. Just make sure you make a truly informed decision. Take 10 minutes to conduct an Employee Salary Review.

 

Here’s why, every increase in salary, no matter how seemingly small and insignificant has a direct impact on your overhead. The Employee Salary Review is a clear and simple mathematical tool that you can access immediately to determine exactly how much more money you’ll need to collect each month to cover that “itty-bitty” increase.

 

Don’t fool yourself into thinking that any raise is so small its impact won’t be felt. Without a clear plan to increase revenue, a little raise here and there will rip through your profits, and I guarantee you’ll be stunned at the thundering impact.

 

To ensure that salaries do not exceed 22% of average monthly collections, you must have a plan to increase revenues to balance the impact of the raise. If the team wants to make more money the practice must make more money, and employees are vital in accomplishing that.

 

First, take a look at collections. Your financial coordinator should achieve daily collections of 45% or higher. If you don’t already have one, establish a collections policy with treatment financing options and follow it.

 

Monitor your money monthly. Review the aged accounts receivable report every 30 days. It should list each account with an outstanding balance and date of last payment. Total all monies over 90 days delinquent. The percentage should not exceed 15% of your total accounts receivable. If it does, delinquent account calls need to be accelerated.

 

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Need more help with Employee Performance Reviews?  Our bookstore offers great resources right here: http://thenewdentist.net/performance-measurements.htm

 

Sally McKenzie is the Publisher and Owner of The New Dentist Magazine. She can be reached at Toll Free 877-777-6151 or via email at Sally@thenewdentist.net

Keep Tabs on Key Reports

Monday, October 1st, 2012

Your Dental Practice’s financial reports give you a much clearer picture of your financial situation.

 

Make sure you check the following regularly:

 

The Accounts Receivable Aging Report should include all credit balances and all debit balances. It is vital to understand how many dollars are outstanding 30, 60, and 90+ days. This report should be printed monthly.

 

The Outstanding Insurance Claims Report identifies how many dollars in outstanding claims there are in each category: current, 30, 60 and over-90 days. This report is crucial because the longer dollars remain outstanding in claims, the more costly it is to the practice. Print this report monthly. Many of today’s software systems allow you to track the numbers daily.

 

The Accountant Earnings Report details exactly how many dollars are being written off in each category: accounting adjustments, insurance plan adjustments, professional courtesies, pre-payment courtesies, etc. Monitor it daily and monthly.

 

The Production by Provider Report allows you to track individual provider production for each dentist and hygienist. It is important to track individual production numbers to determine productivity. Typically, hygiene production should produce approximately 30% of the total production in an office. However, if doctor exams are not included, the number tends to be lower.

 

The Production by Code Report tracks the frequency of specific procedures. This can be used to determine productivity, treatment acceptance rates, and much more. Also, if the practice is utilizing special techniques, tracking the production by code will help to determine effectiveness, i.e.; tooth whitening, periodontal aides, crowns, bridges, and implants.

 

The Treatment Plan Report identifies how many dollars are being presented to patients. Utilizing this report effectively can identify your success rate in treatment acceptance. The formula for this is: Dollars recommended divided by dollars accepted equals case acceptance rate. Your case acceptance percentage should be at least 85%.