How to Achieve Your Collection Goals for the Year
Would you like to increase your production? Of course you would. One of many systems that the consultants here at McKenzie Management advocate is the necessity of having production goals. Let’s take a short walk through the process of determining how to establish your practice goals.
There is more than one approach to setting an annual goal: keeping your team’s gross wages within the normal range of 19-22% of net collections, an overall 10-15% increase or simply some dollar amount that “feels good” to you. Whatever theory you apply is fine, always assuming first that your team salaries are in line.
Step 1- Determine your annual collection goal (the amount of revenue that you would like to see the practice generate).
Step 2 - Review your adjustments report to see how much you wrote off of your production last year, such as bad debt, insurance adjustments, cash courtesies. This percentage of your total production must be factored into your collections goal in order to determine your production goal.
Step 3 - Here is the formula: collection goal / inverted adjustment % = gross production goal.
Example: collection goal is $1,000,000. Your production adjustments last year were 5%. $1,000,000 / 95% = $1,052,632 for your new production goal. I know that you may be thinking, why don’t you just add $50,000 to the collection goal? Because $1,050,000 - 5% = $997,500 and not $1,000,000. I don’t want you to short yourself $2,500!
Monthly vs. Daily Goals
Here are the potholes relative to this approach:
Here is a systematic and organized method of achieving your annual goal:
Step 4 - You must determine the annual hygiene goal first. There are basic guidelines such as 3x their daily salary or 1/3 of the practice production. It can also vary depending on the practice. Let’s keep it simple here and base it on their daily salary x3. Daily salary for each hygienist is $250/day x 3 = $750/day as their goal. The adjustments were already factored in, so this is the amount they should produce daily. Multiply this amount by the # of hygiene days you have per year.
This means that if you work 200 days and you have 2 hygienists that work the same days as you, then you have 400 days of hygiene. So 400 x $750 = $300,000 for the hygiene department goal.
Step 5 - Your goal! Your new production goal is $1,052,632 - the hygiene goal of $300,000 = $752,632 since you are the boss and you must produce the rest! If you want to work smarter and not harder, you increase your hygiene goal and that will reduce your goal!
If you are working 200 days for the year, $752,632 / 200 days = $3,763 is your daily goal.
Step 6 - Every morning at your morning meeting, review the production for each provider for the previous day to see if everyone met their daily goals. Celebrate if you did, and discuss what could have been done differently in order to meet the goals.
At the same meeting, also review everyone’s schedule for the day to see if they are on track to make goal. If not, determine why. Also make plans for tomorrow if there is time.
Schedule Coordinators vs. “Hole Fillers”
It is fine for your hygienists to schedule their own appointments, as long as they also understand the importance of scheduling their day to goal. I can guarantee that if they have a day of 8-10 patients and only 2-3 need radiographs and there are no scaling and root planing patients, they will NOT make goal. This is why allowing the computer software to simply go out 6 months + 1 day is the kiss of death to a hygiene schedule. If they make goal today, they will not make goal 6 months from now with the same patients.
Reaching Annual Goals as a Team - One Day at a Time
Now, go celebrate each day when you and your team reach your daily goals.
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