Hi everyone! Dr. Kristin O’Brien, Director of Optometric Professional Development for Optometric Insights back again in Puerto Rico to talk about one of the first metrics to track in your practice. Gross revenue Vs nett revenue. This is a concept that can be confusing because doctors commonly misuse the terms. Gross revenue is what you charge for services rendered and materials. Revenue, or receipts, is what you actually collect. You can charge $500 for an eye exam but it’s unlikely you will net, or collect that amount. It’s important to set your fees, what you Bill, close to what you expect to collect in most cases so your receipts is as close to your Gross as possible. In the days of Vision discount plans this isn’t always possible but we do the best we can with keeping these figures similar. Another way to look at revenue or receipts collected, how many dollars were brought in during a certain period of time. In my practice, we track this statistic daily. It’s important to know if you are more profitable in a Wednesday than a Saturday and tracking daily makes it easy to figure out if you’re bringing in more dollars in the beginning, middle or end of the month and what months you’re bringing in the most. Net revenue is what a practice makes in profit after all expenses are taken into account. What expenses to track is a topic for another day but suffice it to say that you subtract all expenses associated with operating the business including staff salaries from receipts to get your net. I mentioned earlier that doctors often mix up these terms. Have you ever heard a solo doctor say, “my practice nets $750,000”! Likely what he/she means is they gross $750,000. The average practice nets between 27-33% of their Gross. This practice would have to generate $2.7 million in order to net that amount. In the next video we will talk about other statistics you can measure to help increase your net. Stay tuned!