Article Retreived from: Dental & Medical Financial Services Website Written By: Claire Date: February 10th, 2016

Essential for business growth

Key Performance Indicators (KPI’s) are important statistics that enable a business owner, at a glance, to assess the performance of their business. Here, Michael Lansdell, from Lansdell & Rose medical and dental specialist accountants provides the reasons why for any doctor or dentist aspiring to grow their business, regularly assessing the business KPI’s are a vital part of practice management.

The views expressed in this article are specifically those of Lansdell & Rose Accountants.

What’s all the fuss about KPI’s?

KPI’s can show trends month-on-month and year-on-year, highlighting the strengths and weaknesses of a business, as well as matching actual results with forecasts to ensure financial expectations are on target to being met.

KPI’s are also vital tools for everyday decision-making, plus longer term planning.

Understand your business goals first

KPI’s come in all shapes and sizes and each business is different when it comes to analysing their progress. Differing goals means what for one practice owner will be of high value, to another may be of less importance.

Determining your goals in advance is therefore helpful, if not in a formal business plan or financial forecast, at least have a rough idea of what you want your practice to achieve within a set timeframe, so that relevant KPI’s can be reported on.

Getting to the bottom of your data

Data is the key to being able to produce useful KPI’s. If the data isn’t accurate, or if it isn’t kept up to date, then the KPI’s will be of less worth.

Typically, business owners don’t have sufficient data to extract the information needed to produce a KPI report. This is due to poor systems that don’t have instant reporting, and where the recording of income and expenses is tedious, so the task gets put off to another day.

The other extreme is where practice owners have too much data available and calculate multiple KPI’s making it difficult to focus on the important few. Five to ten KPI’s should be sufficient to get a good picture of the practice performance

KPI’s for all business areas

KPI’s can be calculated for all areas of your business. There are excellent KPI’s to track the success of your sales and marketing process, tracing conversions between enquires and new patients, for example.

Similarly, there are KPI’s that focus on the effectiveness of your operational procedures and your team performance.

KPI’s to assess your financial position

For doctors and dentists these 7 simple KPI’s are a good start to getting a solid understanding of the practice’s financial position. Data can be obtained from a monthly Profit and Loss Account and Balance Sheet.