— it’s a buzzword in the corporate world these days, veterinary medicine included. Especially with the increasing corporatization of the veterinary profession, it is imperative that practices learn about data management, data review, and data response.
[bctt tweet=”These days it is imperative that practices learn about data management, data review, and data response.”]
Your practice management software and your accounting software are your data sources. It is up to you to unlock your data. There is so much information you have access to within these resources and it is crucial to know which figures are most relevant, what they mean, and what to do if they are outside the normal range.
Your data can help you diagnose practice issues before it’s too late
In the same way that laboratory work lets you look inside animals and get a feeling for their overall health, your data lets you take a good look inside your practice. Just as BUN and Creatinine can help you diagnose kidney disease, your number of transactions and number of active clients (among other data) can give you insight into the status of your practice’s health.
And just like abnormal test results from an apparently healthy animal can help you find conditions you didn’t know existed, data collection and review can do the same for your practice.
Even the smallest practice can leverage data like the big boys
Want to know a secret? Most corporate consolidators spend an inordinate amount of time focusing on data to help manage their practices. With data insights in hand, they can identify problems early.
Want to know another secret? Your computer can give you the same information about your practice that the big boys get. You just have to know which numbers to look at so that you don’t go nuts! Fortunately, the AVMA Veterinary Economic Advisory Council recently suggested which metrics to focus on.
[bctt tweet=”Five key performance indicators to focus on in your veterinary practice. @AVMAvets”]
Five basic key performance indicators to monitor
According to the AVMA, you should invest your time and energy in:
- Practice revenue
- Number of transactions or invoices
- Average client transaction
- % of revenue that goes to cost of goods
- % of revenue that goes to labor (professional and para-professional)
Start with these. This will be a test of your ability to mine your data. Using handmade graphs or Excel spreadsheets, start to track this data from month to month. Concurrently, look for national averages where available, see how you compare, and then figure out how to do better.
Decreasing transactions? Look at marketing or hire a new receptionist. Payroll too high? Leverage your staff to generate more income or control hours worked. There is always more than one way so solve a problem.
Data monitoring is the perfect task for your practice manager
Set a monthly due date for a financial health report. Each month, take a look at trends and set up a leadership meeting to recognize positive trends and reward the team, or coach the team on trends that are moving in the wrong direction.
The big boys shouldn’t be the only ones leveraging their numbers. Remember, your data is your compass. It will help direct you and identify which turns you need to make. So measure it, manage it and steer your veterinary practice into a successful future.