Production by provider is the report most owners start with, but it’s the least useful one in isolation. A provider can produce $80,000 a month and still cost the practice money once you factor in their compensation, the supplies and lab fees on their cases, the staff time supporting them, and their share of overhead. To see real profitability, you need several reports working together.

Start with production and collections by provider, broken down by service or procedure code. Production tells you what they billed. Collections tell you what actually came in the door. A provider with high production but poor collections is a different problem than one with low production. Breaking it down by service code shows you which procedures each provider does most and how those mix shifts over time. A hygienist doing mostly prophys has a different profitability profile than one doing periodontal maintenance.

Run a payroll report by provider and by support team. Provider compensation is usually the largest direct cost tied to their production, whether that’s salary, hourly, or percentage of collections. Don’t stop there. If a provider needs two assistants and another needs one, that staffing cost should follow the provider in your analysis. The same goes for hygienists if you track hygiene as a separate profit center.

Supplies and lab costs need to be tracked at the provider level whenever possible. Lab fees are the easier one because lab invoices usually reference the patient and procedure. Supplies take more discipline. Some practices track high-cost items like implants, ortho appliances, and specific materials by case. Others allocate supplies as a percentage of production. Either approach works as long as you’re consistent. A provider doing complex restorative work has very different supply and lab costs than one doing routine hygiene and exams.

Patient AR aging by provider matters because uncollected production isn’t profit. If one provider consistently shows older AR than the rest of the practice, that’s a billing, treatment planning, or patient communication issue that needs attention. Track 30, 60, 90, and 120-plus day buckets by provider.

Adjustments and write-offs by provider tell a story that production alone hides. Insurance write-offs, courtesy adjustments, bad debt, and uncollected copays all reduce what production actually becomes revenue. A provider who routinely writes off 35 percent versus another at 22 percent has a meaningful impact on the bottom line even if their gross production looks similar. Break adjustments into categories so you can see whether it’s contractual write-offs, discounts the provider is offering, or collection failures.

Overhead allocation is where most practices either skip the work or do it poorly. Rent, front desk staff, utilities, insurance, software, and admin costs need to be spread across providers in a way that reflects reality. Allocating based on percentage of collections is the simplest method and works for most practices. Allocating by chair-hours or operatory usage is more accurate when providers use very different amounts of clinical time and space. Pick a method, document it, and apply it the same way every month.

Put it all together in a single provider profit and loss statement showing collections, direct costs, allocated overhead, and net contribution. That’s the number that tells you whether a provider is profitable, breaking even, or actually losing money for the practice. Run it monthly and look at trends over six to twelve months rather than reacting to a single month.

This level of reporting takes setup work in your accounting and practice management systems. Most practices need their chart of accounts restructured, classes or locations configured in QuickBooks, and a consistent method for pulling production data from the practice management software into the books. We do this kind of build-out as part of bookkeeping for medical and dental practices, where the goal is reports the owner actually uses rather than statements that just satisfy the tax return.

If you’re running a practice and these reports don’t exist yet, the highest-value first step is getting production, collections, and direct costs tied to each provider. Overhead allocation can be refined later. For practice owners across the Carolinas, we provide small business accounting, bookkeeping and tax services in Jacksonville, NC with the practice-specific reporting that helps owners see what’s really happening behind the production numbers.