Top tips for financial success in 2020

With 2020 now only a few days away, this is the time to reflect on the last 12 months and start thinking about the improvements you'd like to make in the year ahead — and that includes establishing realistic financial goals for your practice.

Are you not sure where to start? Don't worry. I'm here to offer you guidance. Let's say your goal is to reach $1.5 million in clinical production in 2020. That comes to $31,250 per week (taking out four weeks for vacation). If you work 40 hours a week, you'll need to produce about $781.25 per hour to reach your goal. Do you want to work fewer hours? No problem. Your per hour production will just need to be higher.

So how can you reach your individual goal, whatever it may be? Follow these steps for financial success in the new year.

Develop a clear plan of action for production

To do this, you'll first need to establish daily production goals and make sure your scheduling coordinator is trained to schedule you to meet those goals, not to keep you busy. It's important for your coordinator to understand how much time you need for every procedure -- which requires communication with you and the dental assistant. If your coordinator has to play the guessing game, your schedule will be a mess, causing stress and keeping you from meeting production goals.

Sally McKenzie, CEO of McKenzie Management.

Now let's talk about treatment. I suggest you designate a treatment coordinator who is responsible for presenting treatment plans for all producers in the practice and reaching at least an 85% acceptance rate. This team member should sit down with patients for as long as necessary to answer questions and address any perceived barriers to care. Following up with patients after that initial presentation also should be part of this employee's responsibilities. Making this change is sure to get more patients in the chair, boosting production and revenues.

Other production-boosting steps include implementing an interceptive periodontal therapy program and providing superior customer service that will prompt patients to refer family and friends.

Remember the patient needs what the patient needs

It's important to present all treatment options to your patients -- not just what you think they can afford. Your treatment coordinator should present options that address immediate needs, long-term needs, and any treatment in which the patient has expressed interest. This will lead to increased case acceptance and higher production numbers.

Education is also key to improving case acceptance and, therefore, practice production. Educated patients are more likely to see the value in the care you provide and to go forward with recommended treatment. Show them what's going on in their mouths with images and x-rays. Have them watch videos that explain their condition. Patients will better understand why you're recommending treatment, making them more likely to say yes.

Monitor key practice indicators as a team

That means regularly reviewing practice reports such as accounts receivables and outstanding insurance claims reports. When you commit to doing so, you'll be able to track exactly how much money is owed to your practice.

I also suggest you use the practice production report to monitor details surrounding production, new patient flow, and patient retention. Depending on your software system, this report may be called production by provider, practice analysis, or production by ADA code.

You also can use this report to monitor individual provider production for every dentist and hygienist in the practice. Some systems make it possible to run a production forecast report that can help you recognize slow periods, enabling you to take steps to address potential production shortfalls.

When you monitor these areas, your team members will have a better understanding of how the systems impact each other and what it all means to overall practice success. Team members will recognize problems earlier and be able to address them right away, strengthening the culture of accountability in your practice.

Reign in out-of-control overhead

Keep in mind the industry benchmark for overhead is 55% of collections. You read that right -- 55%. Some practices I've worked with have overhead as high as 85%, and that means they're only making 15¢ on the dollar! If that's where you're at, you'll want to make some changes in 2020 to get overhead under control.

Here are the budget targets you should follow to get there:

• Dental supplies: 5%
• Office supplies: 2%
• Rent: 5%
• Laboratory: 10%
• Payroll: 20%
• Payroll taxes and benefits: 3%
• Miscellaneous: 10%

Once you have a better handle on overhead, you'll find there is more money to invest in the technologies that attract new patients and increase productivity.

Make 2020 your year

Does this sound good to you, but you're not sure how to get there? Consider working with an experienced dental consultant like McKenzie Management in the new year. A consultant can help you identify problems you didn't even know you had and then develop a plan to make positive changes that lead to practice growth. The right consultant can help you improve your systems to boost production and your bottom line.

The start of a new year is a great time to set new goals and make enhancements to your practice. If you follow these tips, your practice will flourish in 2020.

Sally McKenzie is the CEO of McKenzie Management, a full-service dental practice management company. Contact her directly at 877-777-6151 or at [email protected].

The comments and observations expressed herein do not necessarily reflect the opinions of DrBicuspid.com, nor should they be construed as an endorsement or admonishment of any particular idea, vendor, or organization.