As we embark on Part 2 of this refresh, remember we are all responsible for business success, as well as patient care. A regular review of finances is imperative to ensure a healthy bottom line. I employ the Profit First system for cash flow management, but there are additional financial tools for determining how to make the best decisions for your practice. I have outlined a few below.

Establish a simple budget. The word “budget” can give practice owners pause because it seems daunting, but I find that keeping it simple has helped me tremendously. Years ago, Gary Gerber put out a budget template that I still use today. It includes the following categories and gives a net number: total revenues (collected), less the following: labor, COGS (cost of goods sold), marketing, occupancy, equipment and general office. In my budget, I compare my target monthly, quarterly and yearly percentages to the actual percentages achieved. The monthly analysis lets me see where I need to adjust immediately; the quarterly confirms whether I am on track, and the yearly allows me to readjust for the following year.

Monitor KPIs. As I introduced in an earlier issue of Tip of the Week, my top KPIs are schedule fill rate, revenue per doctor-hour worked (not revenue per patient) and percentage profitability. (Check back soon on the online version of this article for a live link to my previous issue on our new archive!) Yours might be different, but the idea is to have several simple KPIs to monitor your practice progress. You can also track what matters most right now, and then change it in the future depending on your goals. For instance, maybe you want to fill the schedule for the next quarter, so you track recalls. A year from now, you decide to grow a specialty service, so you focus on capture rate instead.

Conduct a thorough expense analysis. Every quarter, I do a deep dive into my expenses and see what I can trim or re-negotiate. I watch expenses monthly but do this exercise quarterly. Not only does this analysis help me keep a pulse on my outgoing payments, but it will also raise a red flag if something seems off. For instance, we may need to pause on certain expense categories. If someone gets overzealous in purchasing office supplies, I can put a halt on it to use what we have and save the expense. Additionally, be sure to watch for accuracy. My manager gets approval to pay bills from me, my bookkeeper pays them and I cross-reference them for accuracy before my CPA confirms everything. We have many checks and balances to ensure no one person has control over every aspect of expenses.

Invest in continuing education. Stay abreast of industry trends, regulatory changes and best practices in financial management through ongoing education and professional development. Our industry offers a plethora of free online platforms, courses and social media groups to support your efforts. I also encourage reading books that discuss financials, or tapping into your buying group, if you belong to one, for classes on financial practice management. My one caveat is to not believe everything you read (e.g., tax advice). You can, however, use it as a starting point to do your research.

Optimizing financial management is essential for the long-term success and sustainability of your optometric practice. By refreshing your knowledge, skills and strategies, you can navigate financial challenges.

Gina M. Wesley OD, MS, FAAO owns and practices at Complete Eye Care in Medina, MN. Accolades include Minnesota's Young Optometrist of the Year in 2011 and the Early Professional Achievement Award from The Ohio State University College of Optometry in 2013. She is a member of the American Optometric Association, a fellow in the American Academy of Optometry and enjoys practicing, writing and lecturing in the industry. For questions or comments about this article, please contact gmowesley@yahoo.com.