Clarent University: How to make actionable reports

Paul Jarvis, CEO and Co-Founder
May 16, 2023
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In our first course in Clarent University we learned how to use data to increase NOI. That course was built around a flow chart or decision tree which guided you through a chart of accounts to identify whether revenue or expenses were the right place to focus to improve NOI.

Today we're going to take it a step further! Our goal today is to take the flow chart and turn it into a KPI report which you can use at your company or automate via Clarent's technology.

Step 1: Identify the KPIs

Let's revisit the flow chart and identify the KPIs that are included. For this analysis, we're looking at NOI, Revenue, Occupancy, Rates, Move-Ins, Move-Outs, Expenses, Labor Spend, Agency Spend, Overtime, and Employee Payroll. That's a lot of KPIs! We will also want to compare vs. budget (where appropriate) to determine if a KPI is "good" or "bad" (i.e. is this NOI better or worse than you had expected)?

Here's the decision tree / flow chart to improve NOI 
Step 2: Find the data

Now that we have identified the KPIs we want to measure, we need to go get the data to populate each of these KPIs. These can be organized into categories:

* Financials: NOI, Revenue, Expenses

* Sales: Move-Ins, Move-Outs

* Payroll: Labor Spend, Agency Spend, Overtime, Employee Payroll

* Occupancy / Rent Roll: Occupancy, Rates, Move-Ins, Move-Outs

We also need to be certain that we are pulling the data for our KPIs from the source of truth for that system. For example, you could log Move-Ins and Move-Outs on the rent roll OR in the CRM (or both)? Which is the most accurate system for this KPI? Answering this question will ensure that the report is trusted by the team.

We can make the report even better by also pulling in budgets (to compare vs. actuals) and also creating new KPIs that control for occupancy or community size. For example, if we look at total labor hours across all communities the communities with more staff will always have more labor usage. However, if we calculate the KPI as "Labor Hours per Resident Day" then we are able to see labor usage relative to occupancy, which provides a much more accurate picture of labor. You can read more about how to calculate Resident Days and use this as part of your KPIs in this Metrics That Matter post.

Step 3: Create the Report

Now that we have the KPIs (and know where to get the data from) let's organize it into a report we can use to track NOI (and opportunities to improve NOI) across all communities.

We suggest grouping the KPIs into categories that follow the same logical path as the flow chart. That means we'll start out looking at NOI (in terms of revenue and expenses), and then branch out to new sections for Rates & Discounts, Occupancy, Expenses, and Labor. In each section we will arrange the relevant KPIs (including comparing actuals vs. budgets as a new line item where appropriate).

You may also want to stank rank communities by these KPIs so that you can identify where to focus. This is particularly helpful for larger portfolios where it can be challenging to review data across communities to find outliers. For this report, we suggest stack ranking by KPIs that will help you see problem areas. These include: NOI, % Average Unit Occupancy, Move-Outs, COE Budget Variance, and % Agency Hours to Total Labor Hours.

Now let's take the KPIs from the flow chart and arrange them into a report
Step 4: Automate the Report

Creating a culture of data takes repetition: it's not enough to look at data once and expect the numbers to get better. Automating reports ensures that everyone looks at the data regularly which leads to incremental improvement and change.

To automate the report above, you need to pull data from the source systems regularly, calculate the KPIs, compare KPIs vs. budgets, create stack ranks, and distribute the report. This is a lot of work, and it can be even harder when you're pulling from multiple systems that don't talk to each other! Some of these systems also limit you to exporting data for each community one by one, so you'd need to pull the same data over and over to get all the raw data for each community.

Fortunately, Clarent provides a solution! Our software connects your key systems (payroll, financials / general ledger, rent roll, CRM, and eHR) into a single source of truth with 150+ senior living specific KPIs (including all those listed above). Using Clarent you could create and automate this report in 5 minutes - reach out to our team to learn more!