Making sense of your numbers in allied health private practice
Do you like to crunch your numbers? Do you love reading your financial reports?
In the 18 years that I’ve worked with small businesses – I am yet to meet a business owner that actually enjoys crunching their numbers. As an accountant I struggle to understand why – but as a business owner I totally get it.
The numbers, finance and reports are the last thing we want to think about when we are running our own business. There are so many other things to worry about – your patients, your team, marketing, sales, networking – getting some sleep… so many other priorities.
And to be honest, reading a Profit and Loss report is pretty boring. But – as an accountant I know how crucial staying on top your numbers is.
The numbers tell you EVERYTHING
Making sense of your numbers will give you control over the success or failure of your private practice. You will understand what is happening at the moment and you will be able to PREDICT how things will go for you in the future.
If you don’t delve into the numbers you are missing vital information that can help you improve your bottom line and ensure you have business actually worth running.
The problem for most business owners is that they don’t have access to or understand the numbers that actually matter.
Running your profit and loss report is usually meaningless because a) its historical b) it needs to be bench marked and c) it completely excludes metrics related to your patients and customers.
Metrics are the key – metrics tell us at any point in time – what’s working, what’s not, are we on track to make enough money AND are our patients actually happy?
So forget the profit and loss report – and focus on what actually matters. We can help you determine the best ones for your practice, but in general we recommend tracking the following –
These will tell you if you make enough money, where you should make changes and explain where it all goes.
- Fees generated
- Associate wage costs
- Overhead costs
- Gross and Net Profit
These will show how well your practice is run, how efficient the team is and how happy your patients are.
- Referral sources and how patients come to you
- Number of appointments you have each week
- Client retention– how ‘sticky’ are your patients
- Utilisation rate– are you using your rooms and space effectively
- Conversion rate + method– how successful are the admin team at booking in patients
With the right practice processes and software in place, it is possible to track these as often as you like – you could even look at them daily.
With a budget and benchmarks also in place, you will understand exactly what they mean and be in full control of your practice.
Business Mind are experts in helping practice owners understand their numbers. If you want to monitor your key metrics but unsure if what you’re looking at is correct or it’s all just a bit overwhelming CONTACT US.