Be the CEO - in 10 minutes per day

Every successful dentist understands that being an outstanding clinician is not enough - that overseeing the business is also important.  What challenges many practice owners is knowing how to do this while still maintaining clinical output.

We often tell practice owners that, if they are organized, effective oversight can take as little as ten minutes per day and a couple of hours once per month.

Here is how we break this out:

Day End Basics

1. Review your day before you go home.  Looking at Wednesday's work on Thursday, or Thursday's activity on Monday, is far less effective
2. Print your own day-end report.  Allowing someone else to print it for you opens the door to selective reporting
3. In reviewing your report, ask the following questions:
   1. Was what I did today accurately captured?
   2. Does the work of the other providers in the practice make sense?  For example, was the amount of radiography billed through my hygienist's chair consistent with my policy on frequency of radiography?
   3. Were patient co-payments properly collected?
   4. Do "adjustments" applied to patients make sense in terms of magnitude, timing within the treatment cycle, and justification?  Have staff entered explanations for any miscellaneous (i.e., uncategorized) adjustments, and do you agree with them? If you have doubts about any adjustment, your first action should be to ask a front-desk staff member to dig out the Explanation of Benefits from the insurance company.
   5. Did your office manager or front desk staff member "balance" collections against bank deposits?  They should have a worksheet to show you for this, along with funds to be deposited.  Balancing needs to be done every day you are open.

Month-End Routine

Shortly after the month-end is your time to review the month that just took place and to perform a few vital oversight activities.  Here are some things to do at month-end.

1. Perform an "articulation" calculation.  Articulation is a vital step in oversight that ensures that no one is conducting after-hours transactions in your practice management software.  A full description of the articulation calculation can be found HERE.
2. Compare your collections according to your practice management software against amounts that were deposited in your bank account.  We prefer to do this comparison against your bank statement as opposed to QuickBooks in case QuickBooks is being manipulated.  Because of "timing differences" between when some payments are recognized in your practice management software and when they arrive at your bank, it is unlikely that collections for a month will exactly equal deposits.  This is normal and to be expected.  However, because these timing differences self-correct in the following month, when looking at monthly variances between collections and deposits over time, there should be no clear pattern.  In other words, there should be some months when collections according to software exceed bank deposits and other months when deposits are greater than collections.  If you see three consecutive months when the variance is in the same direction, this is unlikely to be a timing difference; this is cause for concern and probably a phone call to us.
3.  Have a look at your accounts receivable.  It is useful to generate reports from your practice management software that break your receivables into three categories: credit balances (these represent amounts owing to patients), receivables from insurance companies, and amounts owing from patients (and a gentle reminder that these reports should be generated by you, not a team member).  Each of these categories requires a different type of analysis and different corrective action if things aren't right.
   1. Credit balances can represent a ticking time bomb.  Practice owners who ignore credit balances may suddenly realize that they owe patients significant money.  Credits can arise from several causes; sometimes work is paid for and never completed, staff may be overcollecting patient balances, and it is easy when patients have dual insurance for staff to overadjust with a credit balance as a result.  Looking at credit balances monthly, and addressing any issue causing credits to accumulate, is the best way to prevent a shock when selling your practice or some other event triggers an unpleasant realization.
   2.  Overdue balances from insurance companies typically result from rejected insurance submissions, which often require additional information to be provided.  Review overdue claims with your team to ensure that resubmission with the required additional information is provided.
   3. Most patient receivables arise from failing to collect from patients at the time of treatment, or failure to send statements for balances.  If you have significant patient balances, find and fix what is broken in your practice's systems that allows balances to accumulate.
   4. There should be an established protocol for collecting overdue accounts.  Normally, it starts with sending a statement of account and may progress to a phone call from staff, to a phone call from you, to sending the account to a collection agency.  There needs to be an established protocol in your practice, and your monthly review is a great way of seeing whether it is being followed.  
   5. While we hesitate to provide a "yardstick" for accounts receivable due to different practice styles (for example, fee-for-service practices should have almost no receivables), having receivables totaling more than a month's production is definitely a cause for concern.

There are other things that can be reviewed at month end.  Productivity for the month, how far ahead you, and particularly hygienists, are booked, and so on.  However the review outlined here is the core of financial oversight of your team and will give you an excellent insight into the financial health of your practice.

Prosperident offers a review of controls and one-on-one coaching on oversight for practice owners through our Owner Proactive Strategies Program. You can get more information HERE.