The Instant Assessment
Diagnose your practice's financial health in under an hour
The Instant Assessment is a diagnostic tool that reveals the gap between where your practice finances are today and where they should be. It converts your raw financial data into percentage-based allocations across six categories (OpEx, Payroll-Therapists, Payroll-Admin, Payroll-Leadership, Owner's Pay, Tax, and Profit), then compares them against industry-tested targets.
The assessment produces five columns: Actual dollar amounts, Current Allocation Percentages (CAPs), Target Allocation Percentages (TAPs), Profit First dollar amounts (PF$), and the Bleed (the gap). A sixth column, The Fix, simply indicates whether each category needs to increase or decrease. This creates a clear financial story about your practice.
The power of the assessment lies in its simplicity. By expressing everything as percentages of revenue, it normalizes comparison across practice sizes and makes the required changes concrete and measurable rather than abstract and overwhelming.
- Face reality: You cannot fix what you refuse to see, and the reality is almost never as bad as your imagination
- Express everything as percentages of revenue so you can compare across time periods and practice sizes
- Start where you are (CAPs), not where you want to be (TAPs), to avoid setting yourself up for failure
- The numbers tell a story about your practice if you are willing to listen
- Gather Your Financial DocumentsPull your Profit and Loss report, balance sheet, and payroll reports for the longest complete and accurate period available, ideally the last twelve months. If formal reports aren't available, use your bank and credit card statements.Pro tipUsing twelve months of data catches seasonal variations and one-time expenses that shorter periods would miss.
- Fill in the Actual ColumnEnter dollar amounts for Real Revenue, OpEx, Payroll categories, Owner's Pay, Tax savings, and Profit. Subtract rows A2-A9 from A1 to verify you get zero (confirming no double-counting).Pro tipOwner's Pay (draws/distributions) appears on the balance sheet, not the P&L. Tax savings may also be hidden in the equity section.WarningThe most common error is double-counting amounts between Owner's Pay, Tax, and Profit categories.
- Calculate Your CAPsDivide each actual dollar amount by Real Revenue to get your Current Allocation Percentage. This shows what percentage of every dollar earned goes to each category today.
- Enter Your TAPs and Calculate the GapEnter the recommended target allocations for your practice size. Calculate PF$ by multiplying Revenue by each TAP. The Bleed column shows the dollar difference between PF$ and Actuals. The Fix column indicates whether to increase or decrease.Pro tipChoose TAPs within the recommended range that are realistic given your current situation. TAPs must total exactly 100%.
A medium group practice with $103,380 in quarterly revenue discovered they were spending 59% on therapist payroll, 11% on OpEx, and 8% on admin payroll. Their Tax and Profit allocations were near zero. The assessment revealed the story: the owner was likely trying to reduce their caseload while maintaining take-home pay, but the practice couldn't yet afford a non-revenue-generating owner.
Margo signed up for accounting services including Profit First implementation but missed three consecutive assessment meetings out of fear. She imagined she might need to shut down her practice. When she finally showed up, the assessment showed she was not far from where she needed to be.
Julie Herres and her team at GreenOak Accounting developed target allocation percentages after analyzing financial data from hundreds of therapy practices. They noticed that successful practices across different sizes shared similar allocation patterns. These patterns were codified into benchmarks for solo, small group, medium group, and large group practices, creating a reliable diagnostic framework.