Cost management is more important than cost cutting

Cost reduction and cost containment tactics are common to many chiropractic practices. And, when linked to the budget, are a necessity. Although there is some confusion about tube first two terms, and "cost management" is another matter entirely.

Management cost is not cost-cutting

Cost cutting and cost containment do not incorporate a strategy. Think of cost management as part of a long-term strategy and cost-cutting as a short-term tactical approach.

In general, the cost cutting occurs because the cost of trying more of your budget, then you must cut. Cost containment typically means that you do not want the costs exceed the budget, so finding a way to keep them below the budget.

Cost containment can be part of cost management, cost management but involves a long-term, strategic approach, not a short-term tactical approach to cost control.

As a fundamental concept, strategic cost management means getting the most out of your resources as part of an overall strategy.

In developing a cost management strategy, it helps to start thinking about how you can get the most value from resources used to achieve your goals.

For example, whether to offer an exceptional experience every patient visit is important, do not start with the idea that this means higher costs. Start with the idea that a great experience and it is important to ask how best to invest your resources to achieve the desired result, which probably indicates that spending more money at the end in front of the patient's experience will save money in the long run .. .. and a better PVA.

Strategic cost management looks like a great concept, but its implementation is not as difficult as you might think. In essence, it is to think long term impact of the costs inherent in the practice and make them more manageable when you can.

There are probably already using different tactics, however, when taken together, can be a real strategic approach. Examples of techniques which could make up one of the costs of management strategy could include:



* Buy in bulk - clubs warehouse, BJ, SAM'S Club and Costco, will give you the opportunity to purchase key supplies of pens, paper, printer cartridges, cleaning supplies and even toilet paper - bulk buy at better prices than most part of the office supply stores sell.

It means supplies last longer, your office supply budget is easier to maintain and, as the fees to be written down as having a single receipt makes it really easy accounting.

You can even ask your suppliers for discounts if you buy in bulk or accept terms of services that are longer than those currently available. Also, if you are a person who attends lots of conferences and trade shows, put together a shopping list before the next one you attend, on-site discounts are almost always available.

* Use your suppliers - Ask for discounts for bulk purchases or the amount is only one way to help yourself with suppliers. Remember that usually have the same problems of cash flow that comes up, so they may be willing to offer discounts for early payment or cash. You could offer a monthly order guarantee in exchange for a favorable price.

* Vai co-op when you can - Subscribe purchase volume groups. They exist for the purchase of everything from common supplies you might need equipment, electricity and gas. Often, trade groups for your industry and local chambers of commerce offer access to these groups, not to mention discounts them.

* Buy your services each year - as the insurance, telephone, merchant account, internet provider or any other type of service, shopping around can always help you better manage costs.

* Buy with barter. You can exchange your chiropractic care with other providers of products or services, for example.

* Renegotiate the lease - If you're ready to move, re-raising of a lease or just thinking they could do better, open dialogue with the landlord. If you have a lease coming due in the short term, ask your landlord to redo the lease for a long period at a lower rate of leasing. Yes, they will. And, you can do with leases of equipment. See if your bank will give you a better rate of rent and pay the current landlord, for example.

Keep in mind that many costs are not measured by a system of accounting. The cost of patient care because of poor service or quality is an example. When you impact the patient experience, and your collections decline, further cost cutting will not improve your bottom line.

This is a real cost that must be part of cost management, but is not measured explicitly from any accounting system.

Another example is the opportunity cost of people's time. When assigning projects and activities, it is worth considering what will be given if an employee makes the task or project. For example, I met a Chiropreneur who asked his team at the last minute to provide a performance report. The employee had to give service to their patients to fill out forms that Chiropreneur wanted.

Replace the telephone answering service with voicemail, they can save money, but how we impact the patient experience to call your office after hours?

You may also be able to reduce the team. to cut the lead, but what is taken to limit or cause of burn-out on the remaining staff?

When you are thinking of cost management, remember that it is approximately the value of time is being spent as it comes in direct costs and expenses.

Spending so much time trying to reduce the time to attract new patients, and you may find it easier to increase NPP (producing new patient), which is to cut the head to the bone.

And, remember, it is virtually impossible to shrink the size! ...