Comparing a month to the same month last year shows you real change, because it takes seasonal swings out of the picture. Look at revenue, members, your biggest costs and profit side by side, then ask what explains each difference.
Why last year beats last month
Month to month, a DPC practice moves for reasons that have nothing to do with how it's doing. January brings new sign-ups. Summer can be slow. Annual renewals and employer contracts can land in one month. Comparing October to last October removes most of that noise.
Year to date is the second view. It adds every month so far this year and compares the total to the same months last year. One odd month matters less there.
What to compare
- Membership revenue, and the member count behind it.
- Revenue per member. Here's what it tells you.
- Payroll, rent and software, usually your largest costs.
- Net profit, and what you paid yourself.
- Cash at the end of the month.
A made-up example
Say October revenue was $42,000 this year against $36,000 last October. That's up $6,000, or about 17%. Payroll went from $14,000 to $19,000 after you hired a medical assistant. Revenue grew $6,000 and payroll grew $5,000, so most of the growth went to the new hire. That's not bad news. It's the question to ask: did the hire free up time that turns into more members next year?
Look for explanations, not only numbers
Every big change should have a reason you can name. A price increase, a new provider, a new lease, a big one-time purchase. If you can't explain a difference, ask your bookkeeper. Sometimes the answer is a miscategorized transaction, and it's better to find that now.
Watch for one-time items in either year, like an equipment purchase, a big repair or a legal bill. Set them aside when you compare, so they don't hide the trend.
It only works with consistent books
A comparison is only as good as the categories behind it. If software was in office expense last year and its own account this year, the comparison looks wrong for both lines. Keep the same chart of accounts year to year, and when you change it, ask your bookkeeper to move last year's numbers to match.
What I'd do this week
- Ask your bookkeeper for a P&L comparing last month to the same month last year, plus year to date.
- Circle any line that moved more than 10%.
- Write the reason next to each one, or a question if you don't know it.
- Send the questions to your bookkeeper.
Common questions
What if the practice is less than a year old?
Compare each month to your budget instead, and to the months right before it. Start year-over-year once you have 12 months of clean books.
Should I compare percentages or dollars?
Both. A 50% jump on a $200 line matters less than a 5% jump on payroll. Look at dollars first, then the percentage.
How often should I look?
Monthly, when your books close. It takes about ten minutes once you know the lines you're checking.
Want comparisons you can trust?
We reconcile every account every month and send your P&L and Balance Sheet by the 15th, so decisions like this start from real numbers. If that's what you need, apply to work with us.