The Executive Suite: Practice Metrics: Working Days vs Calendar Days

Monday, April 16, 2018

Practice Metrics: Working Days vs Calendar Days

Often major decisions are made based upon knee-jerk reactions to data generated by well-meaning employees. But if you are only looking at data on a monthly basis, not a quarterly or annually, you could be hurting your business more than you think.

Each month has a different number of working days and this is something you need to take into consideration. For example for this year, here are the number of working days:

January: 22 working days
February: 20 working days
March: 22 working days
April: 21 working days
May: 22 working days
June: 21 working days
July: 21 working days
August: 23 working days
September: 19 working days
October: 23 working days
November: 19-20 working days (some companies shut down for both Thursday and Friday for Thanksgiving)
December: 20 working days

These can obviously change if your company shuts down for more than just the major holidays, or no holidays at all.

So looking at March, August and October your monthly data will look like you are performing much better than if you made decisions based upon data generated on September, February and December. This is particularly important for projecting your inflow, paying out bonuses and payroll, and making sure you have enough to make ends meet.

Of course review your monthly data, but keep in mind that some months will look bette. Looking at your information quarterly or even comparing to this time last year is your best bet. It also much easier to plan capital equipment, raises, or even hiring more employees based upon your ability to project out based upon working days.

I think this is an area that often get overlooked, as several practices often complain about how volatile the market is from month to month. Sure based upon your practice type, you could have seasonal business. If your are an orthopedic surgeon, summer and fall are most likely your busiest times of the year since people are more active and kids are back in school and playing more sports.

Depending upon location can also be a contributing factor. Perhaps you rely on tourism or the weather plays a factor. All of these areas are things to keep in mind, and know that you will have ebb and flow within your business. Just taking a step back and finding perspective when reviewing your information can provide you a less stressful review knowing that your business is not failing or employees are not performing.