There is a ministry for couples struggling with finances that I volunteer with. Recently I met with a couple who lost their home to foreclosure and moved in with her parents. They told me that they lost their home because they couldn’t afford their house payment. The first step in working with a couple for financial mentoring is to have them list all of their expenses and write down everything they spend for one month. After reviewing this couple’s information I noticed that they spent $875 on their son’s birthday party and gift. When I asked them how much they thought they spent they answered “about $300”. The mortgage of the home that they lost was $580 a month. When I showed them the numbers, they realized that the mortgage really wasn’t too high for their income, but their spending was. Having the data made it very clear to see what the root cause of their financial situation was from. Without tracking their expenses they would not have understood so easily what the cause and solutions were. Tracking the numbers facilitates data based decisions. The alternative is decisions based on our emotions. Our emotions fluctuate however, the numbers don’t lie.
Tracking practice statistics in a dental office is very important as well. Without the numbers, practice decisions are often based on emotion or what happened in the last few days. For example, Dr. Brown noticed that his collections have not been what they should be. He remembered seeing a report last month that listed all the adjustments and was shocked by how much is written off due to his contracts with insurance companies. Dr. Brown determined that the insurance write offs are the reason why his collections are low. While this may be true, it is quite possible that there are other protocols affecting his low collections. They could be any of the following:
Without tracking and reviewing practice statistics it is difficult to understand the real reason(s) behind the successes and challenges in a practice. Without understanding the root cause of a challenge, finding a solution will take considerably longer. However when statistics are tracked it makes it easy to identify the needed changes, and when the new protocols are successful. The next time you have a challenge in your practice, focus on what your practice statistics are identifying as the root cause.