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A monthly financial review is a 30-minute standing meeting where you read five things in order: revenue trends, collections, expenses against benchmark, your KPIs, and the decisions that follow. Here is the agenda and what each section should tell you.
Getting your books closed on time is only half the job. The other half is actually looking at them. Plenty of practices receive a clean, accurate financial package every month and then file it unread, which means they paid for information they never used. A monthly financial review is the short, repeatable meeting that turns those reports into decisions. It does not take long and it does not require an accounting background. It requires an agenda.
Here is the review we recommend for dental practice owners: what to look at, in what order, and what each section is supposed to tell you. Block 30 minutes, every month, once your books are closed.
The whole review fits in half an hour because it has a fixed structure. You spend a few minutes on each of five sections, in the same order every time, so the meeting becomes a habit instead of a hunt. The five are revenue trends, collections, expense categories against benchmark, your key performance indicators, and the decisions that come out of all four. The order matters: you move from what came in, to what you actually collected, to what went out, to the ratios that summarize it, to what you are going to do about it.
Doing it the same way each month is what makes it valuable. When the agenda is fixed, you stop reacting to whatever number happens to catch your eye and start seeing trends, because you are comparing the same things month over month. This works directly off your monthly financial package, so there is nothing to prepare beyond having the reports in front of you.
Start at the top of the profit and loss statement with production and revenue, and never look at a single month in isolation. One month is noise. The signal is in the trend, so look at this month against last month and against the same month last year. A practice is seasonal, and a December that looks soft is only meaningful compared with prior Decembers, not with November.
The question you are answering here is simple: is production growing, flat, or sliding, and is the change real or seasonal? If production moved, you want to know why before you move on, because almost everything downstream depends on the top line. This is also where you catch a revenue number that looks wrong because of how it was recorded rather than how the practice performed, which is why books kept on a sound basis matter so much to the review.
Next, compare collections to production. Production is the truer signal of how the practice performed, since collections lag and get distorted by write-offs and timing, which is why the gap between the two is one of the most important numbers in the practice. A healthy operation collects 98 to 100 percent of net production, and if collections are trailing, the aging report tells you where the money is stuck.
Then walk the major expense categories against benchmark rather than against last month's dollar figure. The Academy of Dental CPAs benchmark ranges give you the yardsticks that matter for a general practice: staff payroll around 25 to 30 percent of net production, clinical supplies and lab each roughly 5 to 7 percent, and total overhead in the 55 to 65 percent range. You are not trying to hit a number exactly, you are watching for a category that has drifted out of range or is trending the wrong way. A supply line creeping from 6 to 9 percent is a question worth asking before it becomes a habit. Reading expenses as percentages of production, not as raw dollars, is also what keeps a busy month from disguising a cost problem, the way cash-basis KPIs so often do.
A review that ends in observations was a waste of 30 minutes. The last section is where you convert what you saw into action. If collections slipped, the decision is who follows up on the aging balances and by when. If a cost category drifted, the decision is whether to investigate the vendor, the volume, or the coding. If production is trending down, the decision is what changes in the schedule or the case mix. Each item gets an owner and a date, and next month's review opens by checking whether last month's decisions actually moved the numbers.
That loop, look then decide then verify, is the entire point. It is what separates a practice that uses its financials to steer from one that merely files them, and it is available to any owner willing to spend half an hour a month reading the right five things in the right order.
About 30 minutes once your books are closed and the package is in front of you. The structure is what keeps it short: five sections, same order every month, a few minutes each. If it routinely runs much longer, it usually means the books were not fully closed before the meeting, so you are reconciling instead of reviewing.
No. You need to be able to read a profit and loss statement, compare a few percentages to benchmark ranges, and ask why a number moved. Your bookkeeper handles the accuracy and prepares the package; the review is a business owner reading results and making decisions, not an accounting exercise.
Looking at a single month in isolation and reading expenses in raw dollars instead of as a percentage of production. Both hide trends. The value comes from comparing this month to prior periods and watching the percentages move, because that is where a developing problem shows up while it is still small enough to fix.
P.S. Reciprocity Accounting delivers a clean monthly financial package and helps you read it, so your review meeting drives real decisions instead of just filing reports. See how we can help your practice.