|Fun and Functionality
|The fast-growing teen population offers Eye Care Professionals (ECPs) one of their biggest growth potentials -- and challenges. VISTAKON®, Division of Johnson & Johnson Vision Care, Inc., recognizes how important teens are to a growing practice and offers contact lenses that give these patients what they demand -- comfort, convenience and fun. The ease of ACUVUE® 2 Brand Contact Lenses and ACUVUE® 2 COLOURS ™ Brand Contact Lenses show parents that teens can handle the responsibility of contact lenses, while teens enjoy the opportunity to explore new looks. ||
As we close out 2003 and look ahead to 2004, it is smart to gather some key practice statistics. It's best to examine key practice data every month, but if some of the advanced stats have drifted away from you, the year-end is the perfect time to regroup. Armed with data, you can set goals for growth in the new year.
You may find that some of this data is part of your annual financial statement as prepared by your CPA, or from your own financial software system, such as QuickBooks. Other data may found in your practice management software or in manual paper records. As you gather the information, consider how you may be able to make it easier to access it in the future, including assigning staff members to collect key data and automatically submit a report to you each month. Keeping the data in a simple file system will allow you to look at it easily and will make you a better manager.
Here is some key data to consider:
The backbone of business analysis is called a statement of income or profit and loss statement (P&L). Where did you make money and how did you spend it? But make sure your P&L is customized into categories that mean something to you. If you have too many categories of income, or expenses, you may not be able to draw intelligent conclusions. Realize that changing the definition of a category will make it hard to compare previous year's performance with the current year, but it still may be necessary in order to develop a better system. Record the changes in category definitions so you can make proper adjustments when comparing financial data. The actual definition is also very important if you try to compare your data with industry standards... you must compare apples to apples.
Some possible income categories are: Examinations, frames, lenses, contact lenses, and ocular disease. If you have optometric specialties, you will thing of more categories. Your practice management system may provide you with a much more detailed breakdown of every item you sell and every service you perform. While that can be helpful when you need very specific information, it is also good to group many sales items together to form a few major categories as shown above.
Expense categories also require intelligent grouping. Each check you write goes into a category that results in your practice expense report, but be sure the categories make sense for you. If your CPA set up the initial categories, they may not reflect our profession. I have always liked the categories advocated by Dr. Jerry Hayes, which are:
These seven expense categories can provide an amazing amount of information and is easily compared with colleagues and with national averages as gathered by the AOA and other organizations.
- Cost of goods sold
- Staff compensation
- Occupancy costs
- General office overhead
- Net income (can be considered as an expense to the practice)
It may be necessary to re-allocate some of your expenses to provide a more accurate and true analysis of net income. For example, you may be paying a higher than normal rent because you own the building, or you may have a company car or country club membership that is a practice expense, depreciation expense is a paper expense that should be reallocated as income. It is best to sit down with your CPA and discuss this re-allocation, looking at every category to see if there is possibly some personal compensation hidden within. Your net to gross ratio may be better than you think.
In addition to the practice P&L statement and the percentages that are derived from it, here are a few other key stats that are helpful:
Next week's tip will provide some percentages and norms for you to compare your data with.
- Average gross per patient
- Average gross per patient per doctor (for group practices)
- Number of comprehensive exams performed
- Percentage of exams under vision plans
- Percentage of revenue from vision plans
- Number (or percentage) of eyeglass prescriptions and contact lens prescriptions filled elsewhere
Best wishes for continued success,
Neil B. Gailmard, OD, MBA, FAAO
Editor, Optometric Management Tip of the Week
A Proud Supporter of
Send questions and comments to firstname.lastname@example.org.
Dr. Gailmard offers consulting services to eye care professionals through Prima Eye Group; information is available at www.primaeyegroup.com.
Advertiser Disclaimer: ACUVUE®, ACUVUE® 2 COLOURS ™ and VISTAKON® are registered trademarks of Johnson & Johnson Vision Care, Inc. © JJVCI 2003. All Rights Reserved
Please Note: The views expressed in Management Tip of the Week do not necessarily reflect those of the sponsor.
Click to open a printer-friendly version of this tip.
Published by PentaVision LLC Copyright © 2002 - 2014 PentaVision LLC. All Rights Reserved.
If you prefer not to receive e-mail, please use the following link to remove your e-mail address from this list: Unsubscribe
This message was transmitted by PentaVision LLC, 321 Norristown Road, Suite 150, Ambler, PA 19002 | 215-628-6550
Please make sure our e-mail messages don't get marked as spam by adding visioncareprofessionalemail.com to your "approved senders" list. Please do not reply to this e-mail message.