Unlock Financial Potential with an Effective Rate Calculator

5 min
June 12, 2023

The Calculation Making a Real Difference in Chiropractic Practice Management

When you started your chiropractic business, using an effective rate calculator may not have been what you envisioned yourself doing. Your primary focus was (and still is) to provide excellent care and transform your patients' lives. Still, you know your practice’s financial health is equally important.

But amidst the balancing act of patient care and financial management, the last thing you want is to be blindsided by hidden fees and inflated rates from your payment processing solution. Yet, many practitioners like you find themselves in this predicament, struggling to make sense of complicated pricing models and deciphering their monthly statements.  

Fortunately, however, there's a powerful key that can cut through the confusion and help you unlock the secret to smarter payment processing.

It lies in your effective rate.  

If you’re considering a new payment processor—or you’re looking for different ways to save money—keep reading to learn more about why you should calculate your effective rate.

What is an Effective Rate?

First, the effective rate is the percentage of all combined fees over the total sales in the same month.  

With this metric, you see the true percentage of what you pay for every single credit card transaction—without getting lost in the details of your statement.

It also helps you fairly compare fees between payment processors, allowing you to choose the most cost-effective solution for your practice.

Moreover, you may wonder what a good effective rate is. In general, a good effective rate for a small to medium-sized chiropractic practice would be in the range of 2.5% to 3.5% maximum. Typically, in-person transactions are on the lower end, while online stores are closer to 3.5% due to higher chances of fraud without cards present.  

Additionally, your rate can fluctuate, depending on a few factors. Your payment processor, transaction volume, and types of payment methods accepted ultimately determine what you pay.    

Why Is It Important?

You have many expenses in your practice, and your payment processing fee could add up to a significant one. Like many other chiropractors, perhaps you're on a multi-tiered service plan. While these plans appear to save you money, they’re notoriously wrought with hidden fees.  

Moreover, consider how this adds up. If the average chiropractic practice bills over $600,000 per year and collects around $450,000 per year, paying just 1% higher due to extraneous fees can add up to thousands.  

That’s why, given these costs, it’s important to pay attention to your chiropractic practice’s effective rate. After all, the thousands you save can transform your marketing strategy, your clinic’s service offerings, and your personal quality of life.  

In addition to these benefits, the powerful insights you gain from this calculation are manifold:  

  • Financial transparency: Fully understand the true cost of your payment processing, stay aware expenses, and ensure you’re not being overcharged or experiencing any hidden fees.
  • Benchmarking: Compare payment processing costs with industry benchmarks or your competitors. This helps you gauge whether you're getting a fair deal and if there’s room for improvement in your payment processing solution.
  • Identify trends: Identify trends that may indicate potential issues or opportunities for cost savings. For example, if your effective rate starts to rise, you may need to renegotiate terms with your payment processor or consider switching providers to save money.
  • Make smarter decisions: Make data-driven decisions when deciding between payment processing solutions. It helps you choose the most suitable provider for your practice, ensuring you get the best value for your money.
  • Control costs: Notice opportunities to reduce processing costs, either by negotiating better terms with your existing provider or switching to a more cost-efficient solution.

How Is It Calculated?

The effective rate calculation formula is relatively simple:

Effective Rate = (Total Fees / Total Sales) * 100

For example, if your practice had $10,000 in total sales for a month and paid $375 in processing fees, your effective rate would be:

Effective Rate = ($375 / $10,000) * 100 = 3.75%

In this case, your effective rate for that month would be 3.75%. You’d probably want to scale back and look for a new payment processor.

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Why Is My Rate So High?

A high effective rate doesn’t occur in a vacuum. On average, rates are 1.5% higher for high-risk businesses. If you have poor personal or business credit, extremely low monthly processing volume, or a bad processing history, your practice could fall into this category.  

However, it’s also very likely you’re tangled up in a web of hidden fees, deception, and complicated terms:

  • Complex pricing models: Complicated pricing models (like tiered or bundled pricing) make it difficult to understand the true cost of processing. They also include various fees and surcharges that aren't immediately apparent.
  • Hidden fees: Some processors include hidden fees in their contracts, like statement fees or annual fees. These charges can go unnoticed and inflate your overall processing costs.
  • Inflated interchange rates: Interchange rates are fees charged by credit card networks and are typically passed on to merchants by processors. However, some processors may inflate these rates or add additional fees on top of the standard interchange rates, leading to higher overall costs.
  • Obscure contract terms: Some credit card processing contracts contain terms that may increase fees over time, such as automatic rate increases or additional fees for early termination. These terms can cause your rate to rise unexpectedly, making it crucial to review and understand your contract fully.
  • Misleading rates: Some credit card processors are known to falsely mislead chiropractors into believing they’re paying a low rate of around 2.1%. In actuality, their true effective rate is a high 3.5% or more.

Overall, it’s important to keep an eye on these areas to intervene if necessary and either renegotiate pricing or look for a new credit card processor.

Lower Your Effective Rate with ChiroSpring  

When shopping around for a new payment processing solution, focusing on the effective rate can help you cut through the confusion and find the best provider for your chiropractic practice. Armed with this knowledge, you can make an informed decision and optimize your practice's financial performance.  

Still, with your many other responsibilities, sometimes that’s easier said than done. Combing through blocks of text to find hidden fees and obscure contract terms is difficult to prioritize when you have patients in need of care. But you don’t have to do it alone.

Calculating and understanding your effective rate no longer requires a manual, hours-long analysis of your statements. ChiroSpring’s Effective Rate Calculator does more than a calculation. It allows you to simplify the process and gain even more insight into what you pay each month:

  • Unveil hidden fees: Quickly detect other payment processors’ hidden fees.
  • Side-by-side comparisons: Easily compare your current payment processing solution to what you’d pay with ChiroSpring Pay, showing you exactly how much you can save.

And unlike other payment processors, ChiroSpring Pay has flat-rate pricing with no monthly or hidden fees. So, if you typically pay hundreds of dollars due to fees each month, there’s a chance you can save thousands annually.  

It’s easy to get lost in what you really love doing, which is caring for patients and finding treatments that work best for them—but your chiropractic practice’s finances are just as important. With ChiroSpring’s Effective Rate Calculator and transparent payments solution, you gain insight and tools to maintain the financial health of your practice so you can keep doing what you love.


ChiroSpring. (2022, June 17). Effective Rate Explained - CHIROSPRING PAY. YouTube. https://www.youtube.com/watch?v=xAiKgN-MJuo

Norton, C. (2022, December 5). Why Your Chiropractic Practice Needs Billing & Payment Software. ChiroSpring. https://www.chirospring.com/articles/why-your-chiropractic-practice-needs-billing-payment-software

Payne, A. M. (2019, June 13). Chiropractic Economics 22nd Annual Salary & Expense Survey Results. Chiropractic Economics. https://www.chiroeco.com/chiropractic-salary/

Woock, K. (2021, November 9). High-Risk Merchant Accounts and Credit Card Processing: What You Need to Know. NerdWallet. https://www.nerdwallet.com/article/small-business/high-risk-merchant-account

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