Some dentists shy away from having goals because they feel that’s just one step towards having to give staff a bonus. Yet, the staff I talk with, wish they had a goal in place (and yes, a bonus too) so they know what they’re working towards.
Look at your production / collection
First step is to look at your production and collection for the last several months. In Dentrix, I run the Provider AR Totals report and then I look at the Production after the adjustments and I look at the Collection after the adjustments. You want to see your net numbers – not your gross.
Once you can see your performance for production and collection the last several months, you can see if you’re hovering around a certain level. Now, bump up that amount by 10% – 15%. This can give you the first idea of what goal to set.
Look at your profit
Next, take a look at your income statement. What final profit are you earning? Profit margins in dentistry are all over the board, so you need to see what you’re earning. I like to look at the comparison between Total income (Net collections) vs. Profit. If you’re far below a consistent 20% profit for each month, what does your collection need to look like to get you to a 20% profit? This can give you another number that might make sense for your goal.
As an aside, if you do not have an up-to-date income statement, you deserve to have one. You need this to make good financial decisions for your practice. It’s not good enough to just look at your bank balance and then hope it stays high enough to cover your expenses. If you have an accounting service and they are not providing you a regular, monthly financial statement – meet with them and let them know what you need! If you do not have an accounting service and you’re not sure how to go about setting this up for your office, feel free and contact me for help. When you don’t have to keep your bank balance in your head, you’re free to focus on other things!
Don’t stress about picking the perfect goal
Here’s a secret: There is no perfect goal.
It’s perfectly okay to tell your staff that you have been looking at the business-side of your practice and that you would like to set a production and collection goal. You can tell your team that you want to see what they can do – and you need their help to meet these new goals. Focus on the challenge and the fun of setting goals and achieving them.
Be prepared for your team to ask “Will we get a bonus if we hit the goal?”
Don’t be angry when you hear this – working towards a bonus can be a great motivator for your team! As you get started, you can tell your team that yes, you are thinking about setting up some sort of bonus / reward program – but first, you need to see how the goals and performance turn out.
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If you are interested in finding out other performance metrics like this for your practice, you may be interested in my service, Know Your Numbers – I will remote into your software and run a series of reports to provide you a “Top 10” dashboard for your practice. Click the button to learn more about this service:
Setting production and collection goals is just one way to run a successful dental practice. If you’re interested in new ideas on running a dental practice, please subscribe to my weekly blog. One of the biggest challenges to managing a dental practice is managing dental insurance. With dental insurance handled, then dental marketing for new patients becomes a primary focus. In today’s day of online reviews, handling patient complaints well is essential. As your practice grows, hiring dental staff becomes more important. With 18+ years of dental practice management experience, I’m open to your questions to help you run a successful dental office.