Heather Edson from South Shore Dentistry sent me her practice’s formula for bonus to share with everyone… This example is an office that has a goal to collect $325,000 a quarter or $1.3 million a year.
Column 1- Week ending date by quarter
Column 2- Enter your total actual collections
Column 3- Total monthly collections
Column 4- Total quarterly collections
Column 5- Total weekly collections target (calculated by quarterly goal / 13 total weeks)
Column 6- Enter your total actual production
Column 7- Total weekly production target (calculated with an office that collects on average 90% of their production
Again this example is an office with a goal to collect $325,000 per quarter or $1.3 million a year. Use your average collection rate of production, in this case I used 90%. If I know I want to collection $1.3 million this year and my collections average is 90%, I know I need to produce $361,114 a quarter in order to reach my collection goal of $325,000 – ($361,114 * 90% = $325,000
Bonus payout for total office (on bottom left)
4 different payout levels. If office hits minimum goal of $325,000 a quarter (or $108,333 as a quarterly monthly average) the total bonus payout is 2% of total collections- evenly distributed among office staff. If the average collections reach or exceed the next level a higher bonus is distributed.
I used color on my sheet, GREEN= hit or exceed goal, RED= missed goal.
This is just what we created for our bonus system. Anyone feel free to copy or use it as a tool. If anyone has any questions I’m more than happy to discuss.
