Managing UpMonica Dixon PerryCVPM
As a practice manager, one of your responsibilities is to keep your practice owner(s) informed as to how well the practice is doing. How do you accomplish this? Depending upon how involved your practice owner is, he or she may just be looking at the balance in the checkbook and have no idea of how well you are doing in controlling expenses or other financial areas of the practice.
We have developed a monthly management report that can help you to solve this problem. It is a concise report, but it covers all the important information that practice owners should know. The report starts off with some of the more important financial indicators, such as total income, number of business days, number of transactions, average per client transaction, number of new clients and total accounts receivable. I would consider this to be a dashboard for your practice. Practice owners can look at this information and get a good overall picture of how the practice is doing. Along with the current month’s figures, the report also lists the numbers from the previous month and from the same month of the previous year for comparison.
Next, we break down the practice’s income into categories. This information can be imported directly from your veterinary software, or you can manually input it. Along with each income category, the report shows the percentage of that income category as compared to total income. This allows you to make sure you are in line with the industry benchmarks.
If you are doing a budget for you practice, the next section will indicate the forecasted income for the month. Looking at this, you can see if you have reached the forecasted amount and by what percentage is your income over or under the same month of the previous year.
The management report then goes on to report your accounts payable. Too many practice managers and owners are fooled by income and not paying attention to your accounts payable. Your income might be going up but so are your accounts payable! So our report shows the previous month’s accounts payable balance, current accounts payable incurred during the month, less payments made and, of course, the balance at the end of the month. Along with this, we would have you report the end of month checking account balance.
Support staff costs and inventory costs are the two expense categories that we as managers have the most control over and that also can have the biggest impact on your practice’s bottom line. So, as you might expect, the next section of our report lists the compensation for all employees, including associate doctors and practice owners. The industry averages for compensation are also stated to show how the practice is doing compared to other practices. Next, inventory or cost of goods is reported by department. You can therefore compare dietary product income to its expense to make sure these and other products are not walking out your back door.
The last section of our management report takes a look at your associate doctors. Each doctor’s information is shown individually, including their total income, number of transactions and average income per doctor transaction. This information is again compared to the same month of the previous year as well as to the previous month.
As a manger it is important to keep your owner informed about the financial affairs of your practice. This management report is created in an Excel spreadsheet, so many of the calculations are made for you and data input is easy. If you feel this document would be of use and benefit to you and your practice, you can obtain a free download of this Excel spreadsheet in the link below this post. I hope you find this management report to be helpful to keep your practice owners informed about how well you and your practice are doing.