A simple strategy to reduce practice overhead

Know your current costs.

An actionable picture of current costs requires a thoughtfully constructed chart of accounts that groups expenditures logically at a reasonable level of detail.  For instance, a single account labeled “Office Expenses” is not very useful.  The same is true of a large number of very detailed accounts, like “Paper Clips.”  My rule of thumb is that, according to your logic, the items posted to a single account should be similar to one another in function, and each account should represent enough activity or dollar volume to be worth your attention.

Identify an account to look into closely

Do not try to address everything at once.  Start with the high expense accounts and work your way down.

Identify and analyze alternatives

Analyzing an alternative requires compiling:

• Costs — price, discounts and switching costs;
• Benefits — convenience, reliability, productivity gains, incentives, and other relationships.

Make a decision

Once you have acquired and organized all of this information, the best decision should be apparent.  Make a decision to cut out the overhead, lay off staff, switch vendors, etc.


Now just do it!! It's amazing how paralyzing a decision about overhead can be. Pull the trigger; make it happen. 

Have questions? I’m here to help.