You’re a veterinarian. You focus on practicing quality medicine. But, if you’re a practice owner, you should be equally concerned with your data management. How do you gauge your practice’s success? How do you know how your practice measures up against your competitors? Accurate data management is critical because it measures your practice’s performance and allows you to find areas where improvement is needed.
Metrics to measure
Key performance indicators (KPIs) are the items you choose to monitor on a daily basis. Before you can determine what metrics or KPIs you want to track, you must determine your practice goals. Do you want to increase revenue? Manage the costs of professional services? Trim down overhead expenses? Based on your practice goals, you can choose the metrics that are most useful for you to track.
Some common and important metrics to track include:
- Total practice revenue
- Revenue centers as a percent of total revenue
- Expenses as a percent of total revenue
- Total practice transactions
- Practice average transaction charge
- Total clients
- New clients
- Client and patient visitation rate
- Client retention rate
- Total accounts receivable
- Revenue per client
- Revenue per patient
- Staff/doctor ratios
- Staff/doctor productivity
- Revenue per hour of operation
- Net income before and after owner compensation
The metrics you track should come directly from your practice management and accounting software. To combine multiple KPIs in one place, track your information in a spreadsheet (with most PIMS and accounting software, your data can be automatically exported into a designated Microsoft Excel file).
How to measure your metrics
For years, human medicine has used standardized accounting codes. Now, veterinary medicine is finally following suit. The AAHA/VMG Chart of Accounts is the standard for classifying revenue, expenses, and balance sheet accounts. These codes are specifically designed for general, specialty, referral, and emergency veterinary practices.
By using the AAHA/VMG Chart of Accounts, you’ll be able to effectively compare your practice’s financial information to industry benchmarks.
Data doesn’t have to be a scary four-letter word. In fact, if you’re effectively managing your data, it will be your best friend because it will guide you to ultimate success and financial freedom. Standardizing the data in your practice will help you to become more organized, consistent, and profitable.