August 11, 2023
August 11, 2023
Utilizing data analytics in your practice to optimize profitability and allow you to strategize in real-time.
Whether you’ve been in business for three years or three decades, your practice is overflowing with valuable data. From financial results to detailed operational data, the insights drawn from this information can help you understand where and why your practice is succeeding and what opportunities you have for improvement moving forward.
Learning how to interpret and examine this wealth of information is the first step to using it as a catalyst for enhancing the efficiency and profitability of your practice.
Data analytics is the process of analyzing raw data to uncover trends and insights about your practice. It supports you in answering key questions and enables you to draw conclusions about how to operate more efficiently, maximize profitability, and make more informed decisions.
Ultimately, analyzing the data in your practice will help you generate a clearer picture of where you’ve been, where you are, and where you should go.
In the professionals industry, we typically break down our analysis into two related components: financial Key Performance Indicators (KPIs) and operational metrics. While they both provide valuable insights into your business on their own, when examined in tandem they provide a greater overall picture to help you take actionable steps to build a plan for the future.
Assessing your practice’s finances on a monthly or annual basis may be routine for you– be that on your own or with the support of your accountant or MNP advisor.
Wherever you fall on this spectrum, it’s vital that you know what’s going on in your business and knowing the ins and outs of what your financials look like is a big part of that.
To enhance any financial analysis, benchmarking is an extremely valuable tool that helps provide relevant comparisons for select KPIs.
Benefits of benchmarking include:
Key benchmarks that are important to review as part of your financial analysis include:
Assessing and benchmarking your financial KPI’s is a great first step in allowing you to determine high-level opportunities for improvement. The process provides a solid starting point to make directional decisions regarding your key strategic priorities – identifying actionable steps to achieve your financial goals today and in the future.
To take a more transformational view of your practice with a focus on optimization and performance improvement, it’s important that you incorporate critical operational data and metrics alongside your financial KPIs.
Operational analytics shifts the focus from understanding key financial outcomes to identifying improvement opportunities using real-time data regarding the daily operations within your practice.
Examples of operational analytics include:
If you’re looking for opportunities to make changes, it’s best to approach the process with all the available information to help you make the right choices. Not only will it allow you to get to know your practice in more detail, but you’ll also have the opportunity to develop a significant competitive advantage.
Optimizing your practice using both financial and operational data analytics enables your practice operations to run more efficiently, enhances your patient’s experience, and provides greater clarity of your revenue and cost structure. It will also serve to strengthen the practice in order to deal with the risks and to position it at times for best results in the event of a potential sale or exit, whether planned or unforeseen.
If you think it might be time to bring more efficiency and understanding to your practice, MNP advisors are here to help. Whether you’re hoping to attract more patients, or you want to completely transform your operations, meeting with an advisor can help you access the data you already have to plan for the future you want.
Our experienced team of data and analytics experts are always ready to talk.