How to Optimize 6 Dental Business Key Performance Indicators

dental office with employees

If you’re a dental practice manager or owner, then you know that tracking your key performance indicators (KPIs) is essential to maintaining a successful business. 

But what are the KPIs that matter most? This blog post will provide each of them in detail and explain why they’re so important. By understanding and focusing on these six KPIs, you can ensure that your dental practice is running smoothly.

1. Team/Personnel Costs

One of the most important KPIs is team/personnel costs, including wages, benefits, and training. 

One way to control team/personnel costs is to invest in staff training. This can help employees become more efficient and productive, ultimately leading to cost savings. 

Another way to keep costs down is to offer competitive wages and benefits. This can help engage and retain top talent while keeping current employees happy and engaged. 

2. Facility & Equipment Key Performance Indicator

As a dental practice, you must keep a close eye on your expenses to stay profitable. One important metric to track is your Facility & Equipment Key Performance Indicator, which is the percentage of income that goes towards rent, repairs & maintenance, utilities, depreciation and amortization expense, and loan interest. 

Ideally, you choose this number to be as low as possible – 10% or less is a worthy goal. There are a few ways to reduce these expenses, such as negotiating a lower rent price or refinancing your loans. 

3. Dental Supplies & Lab Key Performance Indicator

Ensuring your dental office is stocked with the supplies and equipment necessary to provide quality patient care is critical to success. However, keeping track of all dental supplies and equipment can be challenging.

This includes revenue from Sales and Cost of Goods Sold (COGS). By tracking this KPI, you can ensure that your dental office is making enough profit to cover the costs of running your business. Additionally, this KPI will help you track the performance of your dental suppliers and compare their prices.

4. Discretionary Costs Key Performance Indicator

One of the most significant KPIs for dental operations is the ratio of discretionary cost. This measures how much your income is spent on non-essential items such as travel, entertainment, and gifts. 

While there is no hard and stable rule for what is considered a discretionary cost, most experts agree that anything over 2% of your income should be carefully scrutinized. By controlling your discretionary costs, you can free up more money to invest in essential areas of your business, such as commerce or new equipment. 

5. General Business Costs Key Performance Indicator – 11% of income

This measures how much your income is spent on running the business. This includes advertising, marketing, office supplies, business insurance, and software subscriptions. Keeping a close eye on this KPI will stimulate you to keep your expenses in check and ensure that your dental practice is profitable.

6. Total Providers, Owners, and Profit

There are a variety of circumstances that contribute to a dental practice’s bottom line. Among them, owner’s compensation and profit are two of the most important. 

Generally, dental procedures should aim to generate 35-40% of their income from these sources. Of course, the exact ratio will vary depending on the individual practice’s overhead and other expenses. However, by maintaining a healthy owner’s compensation & profit margin, dental procedures can ensure that they are financially healthy and able to reinvest in their business. 

In addition, a beneficial owner’s compensation and profit margin can also help to attract and retain quality employees. Ultimately, by keeping a close eye on these critical indicators, dental practices can ensure that they are on track for long-term success.


The six dental KPIs we’ve outlined are a great starting point for evaluating your practice’s income. However, they should not be considered. The only factors are influencing your bottom line. It is essential to work with an accountant who can help you track all of the moving parts in your business and give you actionable advice on how to improve your financial standing.

If you’re curious about how your dental income stacks up, ask a specialist to help you calculate your key performance indicators. Once you have this phenomenon, you can work on improving any areas that need some adjustments. At Ash Dental CPA, we have a professional accountant for dentists that you can work with to oversee your financial needs. Contact us today!