Purtzki, Johansen + Associates


Measuring practice performance

Imagine for a moment you are driving a car with no GPS to direct you, no instruments to tell you the speed and no fuel gauge or indicator light warning you the engine is running out of oil. It is unthinkable; you would never get into a car without an instrument panel.

Similarly, as the driver of your practice, how can you steer it to success if you have no instrument panel to tell you how it is performing?

Every dental practice should have an instrument panel to track the following performance indicators.

  1. Office overhead: the goal is to have operating costs (excluding debt servicing and dentist compensation) consume no more than 60 per cent of gross revenue.
  2. Annual Production per New Patient: aim for $800 per patient
  3. New Patient Conversion Rate: your goal should be to turn 70 per cent of prospective patients who contact your practice seeking treatment into loyal clients.
  4. Treatment Acceptance Rate: set a minimum target of 50 per cent for all recommended treatments to be accepted.
  5. Hygiene Production: hygiene production should be between 32 and 35 per cent of total clinic production.
  6. Annual Production per Full-Time Team Member: controlling staff costs goes a long way to help keep overhead down. We recommend annual production per full-time team member be at least $150,000.
  7. Aged accounts receivable report: make sure you do not have more than 20 per cent of your total accounts receivable lingering longer than 60 days. Follow-up immediately. The older the account, the less the chance of recovery.

It is impossible to have a well-managed practice without these monitors in place. A practice dashboard enables you to accurately measure performance and identify areas that require remedial action.

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