By Connor Smith, Accountant at Hive Business
We recently spoke about the importance of using the information available to you in constructive ways Identifying and interpreting this information to crucial to developing your practice, spotting areas of excellence and areas where improvement is needed.
Here at Hive, we track business performance using 6 KPI’s. Often these sound like basic figures, but unless you’re tracking the right information on your front desk software or otherwise, trying to pull the data when you need it if you haven’t recorded things correctly can be like pulling teeth (pun intended).
It’s also difficult to manage recording all this information on your own. Brief your practice manager on what you want to be tracking and arrange a team training session with anyone who has access to the front desk software. If everyone is on the same page, the complete process should become second nature.
Here are our steps to success for tracking the right information to make the most of the Hive KPIs:
NET PRACTICE GROWTH
This is the difference between patients joining in the period and those leaving.
Be sure to maintain an up-to-date patient list on your front desk software if a consultation leads to a new customer and remove those no longer taking treatment. We can then follow the movement of patients month by month and see if the practice is growing, comparing this with outside factors such as a big marketing push or equipment investment.
NEW PATIENT VALUE & AVERAGE PATIENT VALUE
If you want to be tracking new patient value effectively, once a treatment plan is agreed with the provider, you should record the total value of the plan agreed, even if this is to be paid over the course of the treatment in instalments. Depending on how you run your practice software, you may be able to track this full value in the front desk. If you just record the income when it is paid, again you should be maintaining a simple Excel sheet of new treatment plans agreed in the month.
If you’re keeping an up-to-date client list, the average patient value should be as easy as providing us with the total patient numbers for the period. We can then compare this to the income generated (from your cloud bookkeeping records) and calculate the average treatment value per patient, comparing this over time to show crucial trend lines and variances.
NEW PATIENT CONVERSION
This metric shows us as advisors and you as a business owner how effectively the practice is capturing new enquiries.
Keep a record of new patient consultations being booked in the period, and once these are converted to a treatment plan, record them as a new patient. It would also help to keep a record of what kind of treatment the consultation was for (e.g. general dentistry, implants, ortho). We can then compare the conversion rates by associate or treatment type and identify key performers.
AVERAGE DAILY YIELD
Often the calculation that most practice owners want to assess but can be the most difficult to track correctly. To calculate associate average daily yield, we’ll need:
Total hours available per associate (i.e. the time they’re physically in the practice);
Total hours worked per associate (i.e. total time actually performing treatments);
Gross earnings per associate;
Deductions per associate.
We’ve found the easiest way to provide the earnings and deductions per associate is to simply provide us with the same pay statements you give to your associates (which should hopefully detail that information).
Most front desk software comes with a diary or calendar system, which if used correctly, will give the exact details of when your associates are available and when they’re booked up with patients. Failing the front desk software, even a simple Excel timesheet to track the associates can be useful in providing us with data for our analysis.
We’ve spoken plenty of times about Xero in the past, but we really can’t stress enough how great the software is! To get the most out of our KPIs, we recommend that you make the switch (if you haven’t already) straight away. We can help with the conversion and initial training, just get in touch.
Once the bookkeeping is being maintained regularly, we can simply log in, review the bookkeeping and report on your profit for the period. We’ll then compare this to your previous performance and draw conclusions on any variances supported by our other KPI indicators.
NEW PATIENT SOURCE
It’s important to keep a track of where your new patients are coming from, as you can then assess your marketing strategy, what works, what doesn’t and if there are any key markets that aren’t being reached.
It’s probably not possible to track this kind of metric on your front desk software, so we’d recommend keeping a simple Excel spreadsheet of different lead sources and updating this monthly. On the initial phone call from a new patient, make sure your reception team are asking the important question; “where did you hear about us?”
If you’re really interested in growing your practice, Hive has the experience and industry knowledge to get you to where you want to be.
Our 6 KPIs will give us valuable insights into the performance of your practice and drive our advisory service, enabling us to help you make informed business decisions with impact. Get in touch, 01872 300232 or email us at [email protected].