Your 40/20 refers to that portion of revenue that goes to pay for Labor and Cost of Professional Services (COPS - inventory, lab, radiology, and other related services). Labor should be less than 40% of revenue and COPS should represent less than 20% of revenue, with some flexibility depending upon the make-up of your practice. In any event, though, the combined total in the healthiest practices is less than 60% of revenue.
To accomplish your 40/20 objectives, you should track revenues, labor, and COPS closely, and they should be represented as a percent of revenue to provide a consistent and rapid evaluation of how you're doing. Over the long term, it is recommended to track them in trailing 12 format which is used on the IsMyPracticeHealthy.com data dashboard, and entered monthly. It is recommended that you monitor these metrics at least weekly if not more frequently to accomplish your objectives.
Track your 40/20 closely!
