Headcount Scorecard

The Three-Metric Framework

Nathan's framework asks a simple question for every practice: is this location over-staffed in the front office? Rather than staring at a roster, we triangulate three independent signals. A practice that fails two or more becomes a candidate for headcount adjustment. A practice that passes all three stays as-is, even if one signal looks soft.

Each metric is deliberately independent — EBITDA margin is a financial outcome, non-clinical comp % NPR is an input-cost ratio, and capacity utilization is an operational throughput measure. One can be misleading on its own; the combination is hard to fake.

Gate 1 · EBITDA Margin

Is the practice generating enough cash to justify its overhead?

The trailing-twelve-month view smooths seasonality. The prior-year comparison guards against penalizing a practice that's ramping up — if margin is below 22% but improving year-over-year, the gate does not fire.

Source: Revenue & EBITDA By Location sheet → columns O (Rev TTM), AC (EBITDA TTM), R (Rev PYTD), AF (EBITDA PYTD).

Gate 2 · Non-Clinical Compensation % NPR

How much of the revenue is eaten by front-office payroll?

"Non-Clinical Compensation" is the Intacct line 19 total — front office, office manager, and other non-provider compensation. "NPR" is Net Practice Revenue, Intacct line 14. A practice above 7% is spending disproportionately on front-office labor relative to what the practice actually collects.

Source: INTACCT Act sheet → row 14 (NPR), row 19 (Non-Clin Comp), summed across the 13 month columns per location for TTM.

Gate 3 · Capacity Utilization

Is the existing front office already fully utilized by the active patient base?

The benchmark of 1,600 active patients per front-office FTE was set by Nathan based on observed high-performers. A capacity under 1.00 means the current FO headcount has slack — there are fewer patients per FTE than the benchmark would predict.

"FO FTE" counts RFT=1.0, RPT=0.5. Positions flagged as "Specific FO" in the Paylocity Lookup tab (col E = 1) are counted: Front Office, Front Office Assistant, Treatment Coordinator, Insurance Coordinator/Specialist, Billing Specialist, Patient Specialist, Relationship Manager, Administrative Assistant, and non-clinical Other roles (Bookkeeper, Lead Insurance, Medical Records, Service Center, TC). Office managers are not in this count — their salary enters the cost-per-FTE calculation as a 1.5× weight, not as a headcount addition.

Original formula (modified): Nathan's original was Active Patients ÷ FTE ÷ Office Days Open ÷ 1,600. Office days open is not currently available at the practice level, so the simplified formula drops it — effectively assuming uniform office days across practices.

Source: Active Patients sheet (Scott's workbook), Paylocity Report sheet, Master Lookup (2025) crosswalk.

Recommendation Mapping

Data Currency

The scorecard is a point-in-time snapshot. Financial columns are TTM through the most recent closed month. Active patient counts and Paylocity FTE are current as of the most recent pull of Scott's workbook. For trend analysis (is a practice getting better or worse?), the next release will add historical scorecard snapshots.

What This Framework Does Not Do

It doesn't consider:

• Patient mix (perio/ortho/implant load changes how many FO staff a practice needs per patient)
• Multi-location staff sharing (an FOA who covers two practices may show incorrectly on one)
• Temporary staffing (PTO coverage, new-hire overlap, maternity leave)
• Recent openings or ramping practices (use PYTD comparison to partially offset, but not fully)
• Unique workflows (Modento onboarding load, NexHealth call-center offload, etc.)

The framework is a starting point. A "Reduce 1 FOA" flag is a conversation, not a directive — it means the aggregate signals are consistent with over-staffing and should be reviewed by the Ops Director with full context.

Sibling Scorecards in the People System