YoY(year on year) or QoQ(quarter on Quarter) or MoM( month on month) basis?
What is a financial audit? Is it necessary for small dental clinics? Financial audit refers to understanding your financial statements. Financial statements for your clinic are like reflections of your work if at all you understand that dentistry is a business. Finances needs to be reviewed on these heads: QoQ and YoY
Most of of us do it on month on month basis which is grossly incorrect comparison. Here YoY refers to current year revenue vs last year revenue and similarly for QoQ and MoM. This is like considering an isolated tooth for overall assessment of mouth.
YoY and QoQ is a very valid rationale as monthly fluctuations outweigh the normal regularities and patient inflow.
Significance of YoY analysis?
- Long Term goal fulfillment
- When you want to understand your long term goal fulfillment with respect to your personal, professional and administrative aspirations.
- Personal Aspirations – Is your bucket list up to the mark. Are you able to achieve the skills you wanted to achieve on a personal level e.g. a digital detox trip to himalayas or an expedition of 15 days after 10 years of practice.
- Professional Aspirations- Did you attain your professional targets to sharpen your dental skills? e.g. After having a state level mentor did you reach your national level mentor and then international level mentor in the same field.
- Administrative Aspirations- Where do you stand in terms of marketing, human resources, infrastructure and net profits .
- When you want to understand your long term goal fulfillment with respect to your personal, professional and administrative aspirations.
2. Major Shift in patterns of growth
When you want to analyse the major shift in certain patterns like patient flow, conversion rate, KPI’s and much more.
These parameters give you a sense of direction as did achieving a particular skill help you enough to gain in dentistry or your patient did not accept your new skill to the level you expected them to.
So a sense of what worked and what not is on an YoY basis as the system gets an adequate time to perform and not get hampered by small fluctuations which happen in month on month basis.
Significance of QoQ analysis
- Strategic monitoring
- To understand whether your strategies are on the path to achieving the yearly benchmarks or not. e.g. if you have started a new implant service in your center and invested on marketing then a QoQ report will help you understand the return on investment (RoI).
- Seasonal Fluctuations
- To identify short term changes in practice or fluctuations in the efficiency on any step of your patient journey- patient inflow, patient conversion, gross revenue and net profit.
- Team performance
- Reviewing reports of team performer for the quarter it could be an associate dentist/ you yourself/ chair side assistant/ receptionist. Give their due respect, incentive and rewards to boost their confidence.
Decide yourselves whether you want to treat your financial conditions on a single tooth basis i.e. MoM or on a quadrant basis i.e. QoQ or on a full mouth assessment i.e. yearly basis. You are its stakeholder and you are its caretaker so understand finances and start acting responsibly.