There are vital signs that you watch in patients to determine their overall risk and health.
Similarly, your business has vitals that require monitoring for your overall health and risk.
If you haven’t reviewed your vitals lately, here are the metrics which matter most:
I think most physicians enjoy looking at their profit and loss as much as patients enjoy being weighed. It’s typically met with some confusion and detest.
If you have anguish when looking at reports for any reason, please – at minimum – do this twice a year:
In July of every year:
Profit and Loss Report: Year over Year: Either review your Profit and Loss report or ask your CPA or Bookkeeper to share with you what your overall profitability is Quarter 1 – Quarter 2 of one year vs. the prior year.
Income per Provider: Review income per provider Q1 – Q2 compared to the prior year.
Gross Collection Percentage (GCP): As long as your fee schedule has not changed, you can simply take your total payments / charges for the year to determine the GCP. You want to keep your eye on this number to see if there are sudden drops or changes.
In January of every year:
Review your Balance Sheet with your CPA to make sure that any loans to/from are accurate and updated. There are often old liabilities in balance sheets. If you ever need a valuation, these are factored in even though they may be old or not accurate
Pull the reports and review that you looked at in July
There is much more analysis that we perform for clients annually and many more details to the above. However, I tried to keep it brief and, if you look at these metrics, at minimum – you can often see the signs of risks. It may require future digging to understand the source of those issues but you will see the sign that there is something worth digging into.
Collaborate with TTG Healthcare Advisors to improve the profitability of your business. Call (877) 884-3350 or fill out the form here to schedule your complimentary consultation with one of our healthcare advisors.