How To · 9 min read
Your books are closed and your dashboard is in front of you. There are three things to do with it every month: check the production trend, read your KPIs against benchmark, then decide and assign. Here is how to run all three in about 30 minutes, even if you have never thought of yourself as a numbers person.
Getting your books closed on time is only half the job. The other half is actually doing something with them. Plenty of practices receive a clean, accurate dashboard every month and then file it unread, which means they paid for information they never used. The good news is that reading it well does not take long and does not require an accounting background. It takes a fixed routine you run the same way every month. Here is the one we recommend, built around three things and nothing more.
You are a dentist, not a financial analyst, and this routine is written for that. Each step below tells you what to look at, what the number means in plain English, and what to do when something looks off. Block 30 minutes once your books are closed, work the three steps in order, and you will get the whole value of the dashboard without ever needing to think like an accountant.
Before the clock starts, put two things on the desk: your monthly dashboard and your monthly financial package. The dashboard is the at-a-glance scorecard, the package is the detail behind it. You also want a way to compare against the past, which on a good dashboard is built in: this month next to last month, and this month next to the same month a year ago.
One rule before you begin. This only works if the books are actually closed, meaning every account is reconciled and the month is final. If you run this review on half-closed books you are not reviewing, you are guessing, and the numbers will move on you later. This is the whole reason a practice wants its books closed by a firm deadline each month. With closed books in front of you, the three steps take over.
Start at the top of the profit and loss statement with production. Quick definitions, because these three words get mixed up constantly: production is the dollar value of the dentistry you did, collections is the cash you actually brought in for it, and revenue is what lands on the books. Step one is about production, the work itself, because that is the engine everything else runs on.
Never look at a single month by itself. One month is noise. The signal is in the trend, so read this month three ways: against last month, against the same month last year, and against whatever goal you set for the practice. A practice is seasonal, so a December that looks soft is only meaningful next to prior Decembers, not next to November when everyone is using up their benefits.
The question you are answering is simple: is production growing, flat, or sliding, and is the change real or just the season? If it moved, ask why before you go on. A real drop usually traces back to something you can name: fewer days worked, a hygienist out, an associate who left, a soft stretch of new patients, a run of cancellations. If you cannot find a real-world reason, the number itself may be the problem, recorded wrong rather than earned wrong, which is exactly the kind of thing closed, well-kept books surface. Almost everything else on the dashboard is read against this top line, so it is worth the few minutes to understand it first.
This is the heart of the dashboard and where most of your 30 minutes goes. Your KPIs are the handful of ratios that summarize the month. The single most useful habit here is to read each one as a percentage of production rather than as a raw dollar figure. Dollars lie to you in a busy month, because a big number can hide a cost that grew even faster. Percentages tell the truth, because they show what each dollar of dentistry actually cost you to produce. The other thing to know is which KPIs have an outside yardstick and which ones you judge against yourself.
Compare collections to production, because production is the truer signal of how the practice performed while collections lag and get distorted by write-offs and timing. A healthy operation collects 98% to 100% of net production. If you are sitting below that, money you already earned is stuck somewhere, and the aging report tells you where: unsubmitted claims, denials no one reworked, or patient balances no one chased. Collections is the one KPI where a low number is not a spending question, it is a who-is-following-up question.
The Academy of Dental CPAs publishes ranges that act as yardsticks for a general practice. 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 three months running. Here is what each one is roughly telling you when it climbs above range:
Reading these as percentages is also what keeps a busy month from disguising a cost problem, the way cash-basis KPIs so often do. If you want to sanity-check your own practice, our free Dental Practice Benchmark Scorecard lets you compare your collection rate, overhead, supply, lab, and staffing percentages against healthy dental ranges in about two minutes.
Some ratios matter to your practice but have no published industry benchmark, so do not go looking for one. Associate compensation is the clearest example. It is usually structured as a percentage of the associate's own production, so you read it against that arrangement and against the production it is supposed to generate, not against an outside chart. Owner compensation is the same kind of number, a planning figure you watch over time against what the practice can actually support. These ratios are no less important. You simply measure them against your own history and your own goals. A good dashboard puts them right next to the benchmarked ones so you read the whole picture in one place instead of two.
One last note on reading any of these: a single month out of range is a flag, not a fire. The thing that should get your attention is a number that is out of range and moving the wrong way for two or three months in a row. That is a trend, and trends are what this review exists to catch while they are still small.
A review that ends in observations was a waste of 30 minutes. The last step is where you turn what you saw into action, and it is the step practices skip most often. Keep it to one to three decisions. More than that and nothing gets done.
A decision is not "collections were low." A decision names what happens, who owns it, and by when. "Collections came in at 95%. Maria reviews the aging report and works everything over 60 days by Friday." That is a decision. A few more examples of what comes out of a normal month:
Write the decisions down where you will see them again, on the run sheet below or wherever you keep your task list. Then close the loop. Next month opens by checking whether last month's decisions actually moved the numbers. That loop, read then decide then verify, is the entire point. It is what separates a practice that uses its dashboard to steer from one that merely files it.
Here is the whole routine on a single ordinary month, so you can see how fast it goes. Production is flat against last month but up 6% against the same month last year, and nothing unusual happened, so step one is a quick "steady, no action." On to the KPIs: collections came in at 95%, below the 98 to 100 range, and the aging report shows a stack of claims over 60 days that never got reworked. Supplies ticked up to 8% from a usual 6, because someone placed a large stock order. Everything else sits in range. Step three writes itself: decision one, the office manager reworks the aged claims this week, decision two, hold the next supply order and confirm the jump was one-time stocking, not a pricing creep. Two decisions, two owners, two dates. Total time, about 25 minutes. Next month opens by checking that collections climbed back and supplies settled.
That is the entire skill. You are not forecasting or modeling anything. You are reading three things, noticing what moved, and assigning the follow-up.
The value compounds when it is the same 30 minutes every month, on the calendar, right after the books close. Run it the same way and the dashboard stops being a report you receive and becomes the way you actually run the practice. If a number ever stumps you, that is not a failure, it is the conversation to bring to your bookkeeper or advisor, who can tell you whether it is a real trend or just timing. The job in this meeting is to read and decide. The job of getting the numbers right, and helping you make sense of them, belongs to the people who build the dashboard.
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We turned these three steps into a one-page run sheet with the benchmark ranges printed and space to write your decisions each month. Download the monthly review run sheet (PDF) and keep it next to your dashboard.
P.S. Reciprocity Accounting delivers a clean monthly dashboard and helps you read it, so these three steps drive real decisions instead of just filing reports. See how we can help your practice.
About 30 minutes once your books are closed and the dashboard is in front of you. The fixed structure is what keeps it short: three steps, same order every month, a few minutes each. If it routinely runs much longer, it usually means the books were not fully closed before you sat down, 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 dashboard; your job is to read the results and make decisions, not to do the accounting.
Collections, staff payroll, supplies, lab, and total overhead all have published ranges you can read against, mostly from the Academy of Dental CPAs. Ratios like associate compensation and owner compensation do not, because they depend on your contracts and your plans. You track those against your own history and goals. Reading both kinds together, in one place, is what makes the dashboard useful.
That is exactly the moment to call your bookkeeper or advisor, and it is a good outcome, not a bad one, because you caught it early. Your job in this meeting is to notice that a number moved and to flag it. Figuring out whether it is a real trend or just timing, and what to do about it, is a conversation worth having with the people who prepare your numbers. The review is what surfaces the question; you do not have to answer it alone.