Dental Practice Financial KPI Metrics

In She's an Entrepreneur by Nancy Kagan

Owning a dental practice encompasses so much more than the services you provide. You become responsible not only for the health and well-being of your patients, but also the health and productivity of your business. So how do you measure your financial KPI and stay on top of those performance indicators?

If you decided to take a trip to Canada, would you get in your car and just head north? Or would you want to have a destination and road map in order to ensure that you get where you need to go? Without knowledge of what a healthy practice looks like, you are in fact practicing without a destination or road map. With a few simple benchmarks you can ensure that you always get to your desired destination.

So where do you start in determining your financial KPI metrics?

Accounts Receivable

A/R should ideally be equal to 1 month’s production.

Having a tight and well managed A/R system is critical but, in fact, A/R starts with your communication with the patient before services are rendered. Having a strong financial policy in place is key for positive cash flow.

A/R greater than 90 days old should not be more than 15% of total A/R.

Make sure you are not in the banking business. Any extended financial arrangements should be handled outside of the office by a third party vendor. Bryan Koch, in his excellent article on Using Benchmarks Correctly: A/R>90 Days says, “If your A/R>90 is less than 12 percent, consider yourself a “best performer.” A/R>90 that runs about 15-21 percent is fairly average, but a number approaching 25 percent or above indicates underperformance.”

Total outstanding claims over 30 days old should be under $10,000.

Sending clean claims with all appropriate documentation is the only way to keep your outstanding claims in line. Do not give the insurance company any ammunition to hold onto money that you are entitled to receive.


The hygiene department should produce 33% of total office income.

A well run hygiene program can make the difference between just making it each month and exceeding your goals. The standard of care in hygiene starts with the doctor and with your practice’s philosophies. Make sure they are clear and well communicated to the team in order to ensure that hygiene is where it needs to be.

Bring in at least 30 new patients per provider per month.

Internal marketing, external marketing, internet exposure and superior customer service are the cornerstones to practice growth. New patients don’t happen by accident but are a response to a combination of the above strategies. Every business needs to continually revisit these areas to make sure that there is growth in the practice.

You owe it to yourself and your team to know when you are veering off track and more importantly how to keep on track with your financial KPI metrics. While industry standards are only a guide, they serve to provide validation and confidence for you and your team.

Are you on track?

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