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Analytics: What is the Profitability Formula?
Analytics: What is the Profitability Formula?

Learn how to better analyze your practice's performance and increase profits

Sam Miller avatar
Written by Sam Miller
Updated over a week ago

Dental Intelligence is the leading solution helping professionals in the dental industry manage and grow dental practices.

The secret sauce is in the theory behind all the data we display in the software, and we call it the Profitability Formula.

The Profitability Formula

Breaking down each factor of the Profitability Formula provides greater insight into areas of opportunity for your practice. Need to increase production? Look into your Re-Appointment and Case Acceptance rates for clues about where your practice is missing out. Need to increase collections? Dive into your AR Aging and AR Days metrics to better understand where your payments are falling behind.

We've broken out the factors of the Profitability Formula below with suggestions, tips, and best practices for understanding and improving visits, production, collections, and overhead.

Read on below to learn more!


1. New Patients

Without a consistent flow of new patients, your practice will begin to see a decline in production. Often times, the number of New Patients required to achieve a healthy growth rate can be significantly reduced if your practice focuses on rescheduling existing patients immediately after they have completed their current appointment and recalling those that did not schedule. Click here to learn more about tracking the New Patients metric.

In addition to tracking the amount of new patients your practice is adding, use Dental Intelligence to invite your existing top patients to vouch for your services and request referrals! Reviewing the Annual Patient Value data will tell you the average annual value of each patient/family based on how much treatment (dollar value) the patient/family has completed and paid for.

2. Re-Appointment

The Active Patient size, Pre-Appointment and Hygiene Re-Appointment Percentages found in the Performance Board Ticker Bar will help determine the amount of patients a practice will need to schedule in order to maintain or grow the practice.

Active Patients are defined as patients who both:

  1. Are marked "active" within the practice management system (Dentrix, Eaglesoft, Open Dental, etc)

  2. Have had a completed appointment in the past 18 months

Pre-Appointment % is the percentage of active patients who are scheduled for any future appointment. This number is calculated by dividing the number of patients who have a visit on the schedule for a future date by the total number of active patients.

Hygiene Re-Appointment % is the percentage of patients who are scheduled for a future hygiene appointment. This number is calculated by dividing the number of patients who have a hygiene appointment on the schedule for a future date by the total number of active patients.

In order to consistently maintain and grow, monitoring the number of patients that are seen and will be seen in your practice for a specified period of time is critical to your success. Click here to learn more about the Visits metric in the Performance Board.

3. Re-Activation

One of the most cost-effective ways to increase visits is to reactivate existing patients that are already in your patient database but may have fallen through the cracks in scheduling. Dental Intelligence makes it easy to track these unscheduled patients and gives you actionable opportunities to get them back in your chair.

Now that you know who your unscheduled patients are, check out these patient reactivation tools in Analytics and Engagement:

4. Case Acceptance

Another great way to increase production is to increase your case acceptance rates. Start by reviewing your current Treatment Acceptance % in the Provider Pulse to get an idea of where your practice currently stands. Have you set a goal for this metric? If you haven't set a goal or have questions about industry benchmarks, check out our guide here!

Once you know your current Treatment Acceptance % rates, use these tools in Analytics and Engagement to reach your goal:

Check out our complete guide on ways to boost your case acceptance here!

5. Reduce Broken Appointments

Cancellations and No-Shows will ruin profitability faster than most any other problem. By minimizing these two issues, you will preserve margin and reach breakeven much faster. High cancellation percentages can be reduced by helping the patients understand how important this appointment time is immediately after scheduling the appointment.

Cancellations is the percentage of patient appointments which were broken more than 24 hours before their appointment.

No-Shows is the percentage of appointments broken less than 24 hours prior to the scheduled time of the appointment.

Click here to learn more about tracking Cancellations and No-Shows in the Performance Board of Analytics.

To reduce cancellations and no-shows in your practice, we recommend implementing the following tools in Analytics and Engagement:

Production per Visit

1. Increase Fees

Regularly review your fee structure to ensure it is competitive in your local market. If you find that your schedule is full, you may need to consider additional ways to maximize patient visits. Use the simple method below to calculate your potential production:

"If I maintain the same amount of visits on a monthly basis, but increase my production per visit by $___ per month, my production will increase by $___ per year."

Did you know that Dental Intelligence can provide you with a Growth Report to identify areas where you may be able to find additional opportunities? Contact us to request your personalized Growth Report!

2. Reduce PPO Dependency

Evaluate your relationships with insurance carriers in order to determine your most frequent and efficient payers and optimize your billing and insurance claim processes to reduce billing errors and denials.

Ensure that you are billing for all services provided and collecting co-pays and deductibles effectively with DI Insurance. CLICK HERE to request a demo!

3. Expand Tx Procedures

Consider offering a broader range of dental services such as cosmetic dentistry, orthodontics, or specialty treatments to attract more patients and increase revenue.

4. Diagnose Needed Tx

Unscheduled treatment is potential production! The Patient Finder tool in Analytics has an array of filters that can be applied to your patient base to find a specific group of patients. These filters can help simplify the scheduling process by identifying opportunity that might otherwise go unnoticed, such as patients with unscheduled treatment.

5. Increasing Case Acceptance

Understand your practice baseline when it comes to increasing case acceptance by reviewing these three metrics in the Provider Pulse:

Next, set goals! Ensure that everyone on your team understands these and discuss expectations so that the needle moves in the right direction. Review these industry benchmarks as a starting point:

Now that you know your current standings and have set meaningful goals to improve case acceptance in your practice, take action! Our Engagement module is chockfull of features to help get treatment scheduled and completed.

Interested in learning more about Engagement? CLICK HERE to request a demo!

Collection %

1. Establish AR Policy

An AR Policy is essential for maintaining a healthy cash flow and overall financial stability.

The 90-Day Collection % metric in the Analytics Collections Board is like tracking how well you retrieve items lent to friends. It calculates how much money your dental practice has collected compared to what was owed over 90 days. This percentage shows how efficiently your practice is at getting paid for services.

Establish clear and comprehensive financial policies that outline payment expectations, insurance procedures, and available payment options, then make sure your team stays on track by reviewing your standings every day during your Morning Huddle.

If you’re getting paid for most of your work within 45 days, that’s good! It means your practice is doing well with money.

2. Reduce AR Days

Once you've established an AR policy, take a look at the metrics that will help your collections grow. Watch this short video to learn more about the AR Days and AR Ratio metrics shown in the Collections Board:

Dental Intelligence has the features you need to follow up with accounts that are past due. Utilize Past Due Account Follow Ups in Analytics to be notified the day a patient's balance is past due, enabling you to immediately take action. You can customize Follow Ups settings to identify the team member(s) that will receive these notifications, determine a minimum balance, and define what is past due.

For DSO locations: The Revenue Cycle Management (RCM) Summary Report provides a comprehensive overview of the production process, from collections, giving context to the necessary efforts for collection optimization. The report also evaluates the performance of insurance and patient collections.

Click here to learn more about utilizing the RCM Report in Analytics DSO Reports.

3. Resolve Outstanding Insurance Claims

If payments are taking too long to collect, it could signal a problem. Dental Intelligence doesn’t just alert you to slow business or greater credit risk; it provides actionable insights and automation that traditional practice management software lacks.

AR Aging and Claims Aging metrics in Analytics help you quickly identify late payers, allowing you to make swift and informed decisions.

Once you've identified the outstanding balances that still need to be collected, make processing claims even easier with DI Insurance. DI Insurance is a robust tool designed to simplify the insurance verification and claims processing process. It is specifically designed for dental providers, helping them to streamline the entire process.

Submitting claims can be a complicated process, and errors can result in denied claims and lost revenue. DI Insurance makes claims processing much easier by providing a user-friendly interface that simplifies the entire process.

Interested in learning more about our DI Insurance module? CLICK HERE to request a demo!

4. Immediately Address Past Due Accounts

Now that you know your current standings and have set meaningful goals to reduce outstanding account balances in your practice, take action! Our Analytics and Engagement modules are built with the features to help get your collections back on track:

5. Consider Establishing Payment Plans

Payment plans are beneficial to have in a dental office for several reasons, as they offer advantages to both patients and the practice:

  1. Improved Patient Retention: Patients are more likely to accept and complete recommended treatment plans when they have the option of a payment plan. This can lead to improved patient retention, as patients are more likely to return for follow-up care and routine check-ups.

  2. Increased Treatment Acceptance: When patients know they have the option of a payment plan, they are more likely to accept comprehensive treatment plans rather than just opting for emergency or minimal care. This can lead to improved overall patient health and higher case acceptance rates.

  3. Reduced Collection Efforts: By setting up structured payment plans, your practice can reduce the need for extensive collection efforts and the associated administrative costs. Patients who are on payment plans are more likely to make regular payments, reducing the risk of delinquent accounts.

Our Engagement module provides multiple ways to set up payment plan options for your patients:

Interested in learning more about our Engagement features? CLICK HERE to request a demo!


In addition to increasing visits, production per visit, and collections, it is also a good idea to take a pulse on your current overhead costs. Can you identify pain points in your practice? As your end-to-end practice performance solution, Dental Intelligence tools can help you automate and consolidate systems so that you can:

Focus on existing patient top line growth

Ensure that every patient is re-appointed by making the Morning Huddle a part of your morning routine (did you know that practices who use the Morning Huddle every day regularly produce 20% more than those who don't?)

Reviewing the Morning Huddle daily will help you celebrate the ways that your office is staying connected to your patient base, and motivate you to keep working towards your goals!

Increase gross profit margin

Optimize your appointment scheduling to minimize gaps in the schedule and maximize patient flow with online scheduling in Engagement or with LocalMed.

Want to learn more about the online scheduling options compatible with Dental Intelligence? Compare features and plans here!

Establish a budget

  • Review all operational costs, such as rent, utilities, and employee salaries, to identify areas where you can reduce expenses without compromising quality

  • Negotiate with suppliers for better pricing on dental supplies and equipment

  • Monitor and control inventory levels to avoid overstocking or running out of essential supplies

Reduce cost of new patient acquisition

Save on marketing efforts by utilizing existing social media and email campaign templates in Engagement:

  • Click here to learn how to customize social media templates

  • Click here to learn how to customize email templates

  • Click here to learn how to create and send email campaigns


Increasing the gross profit margin in a dental office requires a combination of strategic planning, operational efficiency, and effective patient management. Regularly reviewing and adjusting your strategies will help you maintain a healthy profit margin in the long term.

Dental Intelligence makes it possible to have visibility on all of these metrics in your Profitability Formula Dashboard. This will give you and your practice practice a clear perspective on how you're performing, why you're performing the way you are, and what you need to do make sure you're heading in the right direction.

Click here to learn how to navigate your Profitability Formula Dashboard.

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