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Howard Speaks Howard Farran, DDS, MBA, MAGD

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You Only Manage Three Things:
People, Time & Money… So Let's Talk Money


Howard Farran, DDS
MBA, MAGD
Publisher,
Dentaltown Magazine
When it comes to managing any business, like a dental practice, the three things you manage are people, time and money. In my columns "Effectively Evaluating Your Team" (March 2008), and "Save Time & Increase Productivity" (April 2008), I discussed people and time. I explained that periodic evaluations of your staff are critical to be sure you have the right person in place. After the initial hire, a 90-day evaluation should be done, followed by annual reviews. Regarding productivity and time management, I shared several new technologies that can aid in running your practice more efficiently.

Money is the final crucial component when it comes to managing a dental practice. Knowing the "score" is vital to the success of your dental practice. It will assist you in making critical decisions down the road on whether to expand, add an associate, or cut back due to economic times.
Daily Audit Instructions

1. Take the paper schedule from the prior day and look up each patient's account. Check for posting errors, completed clinical notes, that insurance was submitted, etc. Next, record the amount that should have been collected on the patient's scheduled time. If for some reason the amount was not collected, circle the amount to notate that it is uncollected dollars.

2. Count up all doctor and hygiene chair time used. Record the total on the daily audit report in the appropriate boxes in row 1.

3. To figure the treatment-room hours percentage in row 2, divide the number of hours recorded in row 1 by the number of operatory chair hours available for that day. Doctor and hygiene chair time should be separated.

4. Add up all cancelled patients on the schedule (if you want to track this) and enter in row 3.

5. Now, onto Table 2. Add up all dollar amounts that are recorded in each patient's schedule, even if they are uncollected dollars. Enter this number on line 1 of Table 2.

6. Then, subtract any amounts that should have been collected but were not from the number in line 1. This amount is entered on line 2.

7. The last line is for your collection percent for that day. Divide line 2 into line 1 and enter the percentage on line 3. This number should be 100%!		 Do you know your average monthly production for this year compared to last year? Do you know if your account receivables are less than 1x your monthly production? Do you know what your collection percentage is? Do you know how many new patients you are seeing on a monthly basis? Do you know what percent you are spending on sundries, lab fees and wages each month? The answers to each of these questions should be, "Yes!"

At Today's Dental we perform a daily audit (see below) to compile information that is then transferred to the Monthly Audit Report (see below). The person who performs this daily audit should not be the one who checks out patients or posts payments into your practice management system. It doesn't matter whether it's you, the office manager, your spouse or anyone else who does not primarily work at the check-out desk posting payments each day who performs this audit. The daily audit is important to track over-the-counter collections, catch scheduling mistakes, check absence of clinical notes, make sure the treatment plan was updated after posting, check if insurance was submitted, check how many cancellations occurred each day and the amount collected from each patient. I know that sounds like a lot to do but it should take no less than an hour to go through a schedule with eight operatories like we have at Today's Dental. If your practice is smaller it will take even less time. This audit will give you the peace of mind that things were done correctly and you will now have the information needed from each day to compile the monthly audit report.
 Download the Daily Audit Report Template     Download the Monthly Audit Report Yearly Template

If you put the daily audit to use as part of your routine, you will know what is happening in your practice, what mistakes are being made (if any), reduce or stop embezzlement and you will be able to correct or obtain further training for those who need it. More importantly you will know the "score" for your dental practice.

If you have any questions regarding these two reports you can e-mail Lorie Xelowski at lorie@dentaltown.com, she will be happy to help you. Remember, "You cannot manage what you do not measure."
Dentaltown Magazine
September 2025
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