Happy employees? Check. Satisfied Customers? Check. Soaring revenue? Well, two out of three ain’t bad. But it can be great. Here are nine steps to optimize inventory, insurance, equipment, spending and more to keep your optical up-to-date and working for you in the New Year.
If you do not have a software system, it may be time to consider one. If you are already using a system, ensure data is being backed up and that you have the latest updated version available.
If you can’t measure it, then you can’t manage it. The easiest way to keep track of your patients, inventory and scheduling is with a top-notch software program for eyecare professionals. Effective point-of-sale software eliminates the need for paper-filled optical orders and allows staff to pull up previous patient data quickly. This can translate to less time wasted looking for files and more orders and payments flying through your credit card machines. It’s important to make sure every optical staff member is trained and experienced using the platform. The last thing you want are your opticians bumbling through the order process in front of a customer. Instead, they can be talking with the customer about second pair sales, pulling and billing insurances, and learning more about the patients and their families while entering new sales.
Check to see if your insurance is up-to-date and you are receiving all expected payments.
If you accept insurance, it’s important to ensure you are getting reimbursed on time and not losing money due to a breakdown in your billing or by an oversight by the insurance provider. Many companies provide claims and authorizations for services, yet in the end, it is up to your staff to efficiently enter and process the claims. In some cases it can be easy to pull an authorization, provide materials and not ever complete the payment request. Many insurance firms offer a window of 30 days, 90 days or other terms to process claims. If you miss this window, you are out of luck and can no longer get paid for the materials you provided. Your software system can guide you by running accounts receivable reports, showing all outstanding insurance payments you expect to receive.
Conduct a thorough frame inventory audit to determine costs of goods sold (COGS).
Knowing what you have on your boards is essential to understanding your profitability. Budgeting, accounting and COGS are all tied to the simple equation of what sold, what didn’t and what is missing. A proper audit should never be completed by one person, and it is intelligent to have a double blind checks-and-balance confirmation of all your frames.
Regardless of the final tally, you cannot change the past and have to accept the data for the true value it is. If your staff rocked the audit, reward them for helping to keep a watchful eye over your highly valuable frames. On the other hand, if your optical didn’t do so hot this time, don’t lose your cool. Use this experience as a helpful training step and a documented grading to keep for future frame audit comparisons.
Create a plan to find out which frames are your top sellers and which may need to be replaced.
Staying on top of what’s hot and in-demand is one way to ensure optical success. Finding the right time to begin carrying a particular brand may be the pass/fail reason why your optical beats the competition. The point is to not invest in everything but to pay attention and consider your inventory as the lifeblood of your business. Taking a chance on a new product could be the juggernaut move to help you make more happy trips to the bank.
While you may have some slower selling frames here and there, you may actually have some vendors to eliminate completely. Keeping these accounts open takes up time and space, and it makes up a decent-sized portion for your annual optical staff budget. Choosing to focus on fewer vendors also frees up time from rep appointments, inventory entry and product returns.
Deter returned and discontinued products.
Picture each frame as a $50 bill (or higher depending on your location) sitting in its place. A frame that doesn’t sell is just a poor investment of your money that could have been used elsewhere. Each time a vendor comes in and pulls discontinued product, you are throwing money away. Consider the time paid to the staff when picking the frames, unpacking the frames when they arrive and entering the frames into your inventory program, and don’t forget the shipping fees you paid to get the goods. Then double all that (both time and money) for the completion of the return process. Instead of keeping this cycle churning your profits away, invest the time to learn to be lean and mean. Avoid paying any finance charges or interest on your frame purchases; have your staff select products that tie to your local patient demographics and not their own personal frame styles. Make sure whomever is selecting the purchased inventory is being held accountable for their choices.
Consider purchasing discontinued frame items to dramatically improve blended margins.
Frame manufacturers are a business too. They do their best to make, create and order the frames they think you will want to buy for your practice. At the beginning of the year, many manufacturers have bulk discontinued frame inventory left over from last year to move out to make room for new models. When a frame has been flagged as discontinued, there is an opportunity to take advantage of highly discounted and quality goods, all with their full original book value for insurance billing purposes. If you do choose to go in this direction, research is key. For example, if you knew frame 1234 was sold 25 times in your optical over the past year, then you have a pretty good idea this frame is a safe bet to purchase in bulk. The question comes down to your risk comfort level. A savvy way to offset the problem of warranty exchanges is to simply purchase enough understock to warranty the frame yourself.
Evaluate equipment. Perform maintenance if necessary, or replace with updated technology.
Whether you have a standard pupilometer or a fancy digital measuring device for taking PDs and Segs, when was the last time you ensured they were calibrated? The same goes for other devices such as lensometers, lens clocks, distometers and other optical measurement equipment. A smart idea is to create an easy monthly or quarterly checklist for staff members to sign off on when completed. Simple confirmation of sensitive measurement equipment being calibrated can improve the quality of the dispensed work and reduce costly equipment error remakes.
If you have a finishing lab, ensure that equipment is maintained and calibrated.
If you have an in-house lab, closely inspect your equipment and set-up. All moving parts require maintenance, and keeping a close eye on your lab investment can help you save thousands in repairs and future replacement needs. Just like your optical measuring devices, edgers, blockers and other ancillary lab goods all need to be routinely calibrated. Make sure your lab staffers know how to perform each task, and add a documented sign-off here too. This is also an opportune time to obtain the latest and greatest in lab equipment from your favorite vendors. Many of them unveil new products with advancements at the beginning of the year and are kind enough to provide you with plenty of information on the annual tax savings section 179 rules for capital equipment purchases.
Check with local flex spending programs; many of them allow for extending for 30 to 120 days into the New Year.
These are two of the most powerful words in optical. The mere mention of them can create goosebumps and excitement at the dispensing table. Please make all of your staff members aware of flex spending, and have them mention it in some type of a “œuse it or lose it” in-store signage to remind those patients who may have simply forgotten they have been sheltering away hard-earned dollars that will evaporate if not used. Many firms now offer 30 to 120-day extensions from the year-end date for enrollees to submit their flex purchases. Having these extra purchases is one way to ensure your optical is starting the New Year off with a bang!
Frank Gimbel is an advanced certified optician and owner of Gimbel Opticians, in Plymouth Meeting, PA.