Profit and Loss, Management and Leadership, PDF

FMOH Profit and Loss 1. Profit = Revenue minus expenses 2. Production is dental ‘revenue’ or ‘sales’; this term refers to the total dollar amount of treatment performed by a provider or practice in a given time frame(day/week/month/year). 3. Collections refers to the payments made to the practice a...

FMOH Profit and Loss 1. Profit = Revenue minus expenses 2. Production is dental ‘revenue’ or ‘sales’; this term refers to the total dollar amount of treatment performed by a provider or practice in a given time frame(day/week/month/year). 3. Collections refers to the payments made to the practice and deposited in the business bank account. 4. Gross Production is production before insurance write-offs. 5. Adjusted Production is net production after insurance write-offs are applied. 6. Collections ratio is the calculated percentage of collection divided by adjusted production for a given month or year. The widely accepted target is 96 to 100% collection of adjusted production. 7. The break even point is the term that described the total cash requirements to pay the bills and keep the doors open. In dentistry, it is the level at which collection (deposits) equal total operating expenses. It is typically calculated on a monthly basis. 8. Payroll expense is the highest expense in most businesses, especially skilled services. 9. Technology can often be used to boost team efficiency. 10. Capacity is the term that refers to the limits of the practice’s ability to produce in terms of number of operatories, equipment, providers, staffing, provider skills/procedure mix and available appointments. 11. Overhead is the term that refers to total practice expenses as a percentage of total revenue. It may be calculated as a monthly/running average or on an annual basis; it is used as a profitability indictor in assessing the market value of a dental practice. Management and Leadership 1. A vision statement is a written statement of the purpose, goals, and strategic direction of an organization (‘where we are going’). 2. A mission statement is a written statement of organizational core values that describes the customer experience and ‘how’ strategic goals will be achieved. 3. Employment at will is the legal statute that stipulates that ‘Employers may legally terminate an employee at any time for any reason, or for no reason without incurring legal liability’. 4. The Occupational Safety and Health Administration or OSHA ensures ‘safe and healthful working conditions for workers by setting and enforcing standards and by providing training outreach, education and assistance’. 5. The US Equal Employment Opportunity Commission or EOC enforces federal laws to protect individuals from discrimination in employment. 6. For non-exempt employees, overtime wages must be paid at not less than ½ times the employee’s regular hourly rate if an employee works more than 40 hrs in a workweek. 7. A daily huddle is a 10-15 min all-tam meeting that provides the opportunity for team members and departments to plan their daily activities and discuss scheduling priorities. 8. A written employee handbook provides organizational communication on workplace policies and procedures. 9. Collaborative/Participative leadership, sometimes called ‘democratic’ leadership, describes working w others in a participative style. This leadership style can be highly effective for empowering employees, brainstorming, or problem solving. 10. Situational leadership refers to responding w a leadership style based on the circumstances at hand. The leader chooses the appropriate actions w consideration for the individuals and decisions involved. This leadership style can be very effective in conflict management. •