After looking closely at how scheduling templates drive your revenue and operational flow (see “Scheduling for Success,” October 2025 issue), it’s worth taking a step back.
The schedule is powerful, but it’s not the first step. Before you can build a schedule that supports your goals, you must know what those goals are. And that means creating a clear, practical budget that reflects your strategy and sets the foundation for how the practice operates.
In this article, we’ll pause from the day-to-day and zoom out to explore how to build a budget that connects your big-picture goals to the systems and decisions that follow—including your practice schedule.
Start With the Core Categories
At a minimum, a functional budget should include the following:
- Clinical encounters
- Surgical volume
- Total revenue
- Staff compensation (with or without benefits)
- Facility expenses
- Marketing expenses
- Other operational expenses
- Net operating margin
This structure lays the groundwork for financial planning and performance management. It also becomes a powerful learning tool for managers who are still building confidence with budget oversight.
Use the Per-Encounter Perspective
Once totals are in place, calculate your key figures on a per-encounter basis. This provides immediate insight into true cost and profitability—and helps identify when fluctuations in monthly volume are skewing the bigger picture.
If your per-encounter revenue and expenses stay within range, your practice is likely to perform well, even if overall volume is up or down for the month.
Follow a Step-by-Step Plan
Here’s a simplified approach I use when working with practices:
1. Clarify Goals: Are you trying to grow revenue? Add providers? Improve margins? Expand services? Set your strategic objectives first.
2. Estimate Volume: Project clinical encounters and surgical cases by provider, factoring in seasonality and time off.
3. Set Revenue Targets: Based on volume and expected collections per encounter.
4. Build Expense Assumptions: Include fixed costs (rent, salaries) and variable costs (supplies, marketing, tech fees).
5. Calculate Net Margin: Total revenue minus total expenses = net operating margin.
6. Reverse-Engineer the Schedule: Make sure your template can actually produce the volume you’ve planned, with a buffer for no-shows.
7. Create a Monitoring Tool: Ideally, a simple dashboard that tracks actuals against targets throughout the year.
Build the Budget Into Your Operations
The most effective budgets aren’t stored in binders. They’re built into how the practice runs.
Use your volume targets and per-encounter assumptions to reverse-engineer your scheduling templates—making sure you budget for the type of appointments and patient flow that actually drive your financial goals.
With your schedule now in place, you can reverse-engineer your staffing needs. It tells you how many front desk team members are needed to handle check-in and check-out volume; how many techs are required to maintain clinic flow; and even how many surgical estimates and pre-authorizations may be needed. When volume, schedule, and staffing are all built from the same plan, operations become smoother and far more predictable.
Bring It to Life with a Simple Dashboard
Once your annual goals are set, you can create a simple dashboard to plug in actuals—weekly or monthly—and instantly compare them against your plan. With visual cues (like green/yellow/red status indicators), you’ll know at a glance if you’re ahead, behind, or holding steady. Use it to track monthly budget versus actuals, show cumulative year-to-date totals, and include per-encounter metrics so you can assess both financial performance and operational efficiency. (See more on how to use this dashboard in monthly reporting sessions below.)
Even a well-built Excel file can give your managers a pulse on performance and allow for fast, focused conversations about what’s working and what needs attention.
Track What Matters Most
As your budget and dashboard evolve, track both the core financial and operational metrics that offer meaningful insight into how the practice is doing. Start with the following key performance indicators (KPIs):
- Total revenue and encounters
- Expenses by category (payroll, facility, marketing, etc.)
- Net operating margin
- Per-encounter revenue and cost
- Operational KPIs like surgical conversions and no-show rates
- Then, consider adding a few additional KPIs that offer deeper insight:
- New patient ratios
- Surgical evaluation-to-surgery conversion
- Upgrade conversions
- No-show rates
- Provider-specific clinic and surgical volumes
These KPIs create visibility into the behaviors that drive results and help ensure your goals aren’t just set but actually achieved.
Review Your Budget Performance Monthly (and Share It)
A budget isn’t just for finance teams; it’s a leadership tool. The only way it stays useful is through regular review and communication.
I recommend holding a monthly reporting session with your leadership team to review progress, identify any variances from the budget (positive or negative), and discuss what’s driving them. These sessions are not just about reporting numbers, they’re about understanding the “why,” deciding if course correction is necessary, and, just as importantly, celebrating the wins.
The most important aspect of this meeting is that it’s designed to be quick, informative, relevant, and never missed—helping your team maintain momentum and stay on the same page all year long.
Avoid Common Mistakes
Even a well-structured budget can fall apart if common pitfalls like the following aren’t addressed:
• Overestimating Growth: Be realistic. Basing a budget on aggressive assumptions sets everyone up for frustration.
• Ignoring No-Shows: A 15-20% no-show rate can derail even the best-laid plan if not factored into scheduling and revenue projections.
• Misaligning Staff Costs: Avoid blindly applying raises or staffing additions without linking them to productivity or volume expectations.
• Skipping Operational KPIs: Without tracking metrics like new patient ratios or conversion rates, you lose the ability to diagnose issues early.
• Treating It as a One-and-Done: Revisit your budget regularly, especially if your volumes or expenses shift mid-year.
Bottom Line: Use your Budget As a Management Tool
A good budget isn’t just a finance tool—it’s a roadmap. It shapes your staffing, your schedule, and your strategy. And when it’s supported by a simple, visual dashboard, it becomes something every manager can use to lead with clarity and purpose.
This approach is a core part of the Smart Checkups framework: helping managers and owners get on the same page, monitor progress, and align daily operations with long-term goals. OM
