Optical Budget

Now, let's look at the optical budget tab, in our optical analysis spreadsheet. The purpose of the optical budget tab is to review the prior-year expenditures and to compare and analyze current year spending, while tracking frame and optical lens spending, in accordance with the current year's optical budget. This means we’ll also need to create a spending budget for our frames for this year. Let's get started.

First, I'd like you to review your cost of goods for the prior year, for both frames and optical lenses. For this information, you may need help from your doctor, accountant, or practice administrator. Starting in row 5, I want you to enter the total amount of money spent last year in the month of January on frames. I want you to do the same for the remainder of the year, for last year, so that we have data to compare. 

In row 6, I'd like you to put for each month of last year how much the practice spent in total for all labs combined on ophthalmic lenses. Again, you may need assistance in gathering this data from your doctor, accountant, or practice administrator. Once we have that information completed, we can put our total frame budget for the last year on what we spent, which should be equivalent to the information you’ve input that calculated a total in cell N5. Here we see its $29,400. As we put in the information for last year's frame budget, you will notice the rest of the spreadsheet starts to calculate for us, but we’ll get to that in a minute. 

Next, I want you to discuss with your doctor or practice administrator what the practice growth goal for this year is. Based on this information, you will automatically have calculated for you a new frame budget for the current year to use for spending. Based on the percentage of your frame budget that you're allocating for each individual month or based on the prior month's collections or by analyzing the prior year's month-to-month receipts, I want you to enter the percentage for each individual month that you expect to spend out of your total frame budget in row 12 under the proposed percentage of the budget. 

Finally, in row 15 next to lab fees, I simply want you to take all of your lab invoices for the current month once you receive them and put the total in each of the cells for the corresponding month. This row will color code to green or red, depending on if it is above or below the prior year spending, added with the current practice growth goal as indicated here. You will notice that you cannot actually input anything in row 13 where it says actual, for the actual amount that you're spending on frames. That’s what's going to take us to our individual monthly spending tabs which we will move to now.