Management expert Peter Drucker is credited with saying, “If you can't measure it, you can't improve it.” Key performance indicators (KPIs) are a way to measure the success of different activities in a dental practice and give benchmarks you can measure against yourself, the market and peers. When used right, they’ll help guide both your long-term plans and daily decisions.
Here are three of the most important key performance indicators your practice management software should track. Knowing these KPIs and how to track them can help drive higher profits. To help you even more, the KPIs each include a tip for implementing them right now.
The American Association of Dental Office Managers recommends a practice’s accounts receivable stay between 50 and 100 percent of average monthly production. Your practice management software’s reports should let you see A/R in various ways, including working A/R and aging buckets. (And cloud software has additional benefits for groups because it centralizes data.)
Tip: Using information from this KPI, make a plan to collect better. For instance, Dentrix Ascend uses an improved exit workflow that reminds staff to collect copays at checkout. You could also give more opportunities for patients to easily pay by offering electronic statements and online payments.
You’re losing patients, but are you replacing them with new ones? On average, according to the US Census, 12 percent of people move each year, and other patients will be lost for various reasons. Monitoring this number is another important way to watch your practice’s profitability; a good rule of thumb for staying ahead of patient attrition is to gain 25-50 new patients a month.
Tip: Use your practice management software to watch your patient attrition and patient volume numbers over longer times, such as a year. Dentrix Ascend has this and other reports that show patient percent in recare and percent in perio; these are also important to monitor because they’re areas where you can improve revenue.
Many KPIs are interconnected, and this is a “two-fer” KPI related to both A/R and patient attrition. The right practice management software will let you monitor performance in production versus collection with pre-built and custom reports. You’ll be able to see trends over time that will help you uncover which patients have most value for your practice so you can market accordingly.
Tip: Not all patients are created equal. You can earn more in the same time period by attracting patients who need certain procedures or who have specific insurance plans. Dentrix Ascend can help you make the best use of your marketing dollars by letting you target patients who impact profitability the most.
Dentrix Ascend is cloud-based software with powerful, customized reporting to give you the right KPIs that enable full visibility into your practice — no matter how many locations. Find out more about other vital KPIs you can use to make the best strategic business decisions in the on-demand webinar “KPIs for Group Practices,” or see how easy it is to collect the right KPIs through Dentrix Ascend by requesting a demo.