Many dental offices lose between $10,000 and $50,000 annually, year after year, due to deficiencies in Accounts Receivable management. Sadly, some of them don’t even know how much money they are leaving on the table.
With a systematic process for collecting monies that are owed, a practice can drastically reduce the revenues that remain uncollected. Sound – and profitable – collections begin with the following policies.
Nine Collection Policies for Your Dental Practice
1. Do not schedule any treatment without providing the patient an estimate. If the practice is providing a full treatment plan to the patient in writing, be sure to state that the treatment could change and hence the estimated cost could also change. Also, state that the estimated costs are valid only for 90 days, as fees are subject to change.
2. Both your clinical staff and your business staff must learn to communicate value regarding treatment. Front desk staff must be confident in asking for money.
3. Assign a single staff person to take full responsibility for Accounts Receivables (A/R). Request periodic reports from this person and review them carefully. These reports must be put out once per month or more frequently. Set standards and targets for A/R totals and A/R age and communicate them clearly to this staff person. Discuss the status on A/R at Team Meetings.
4. Base all staff bonuses on collections, and not on production. This ensures that everyone has a vested interested in collecting payments that are due to the practice.
5. Notate or designate patients with a poor payment history in your records and take particular care to enforce financial policies with these patients.
6. Do not seat any patient in a treatment chair who has not signed a Financial Policy Sheet, which explains the financial policies of the office and clearly defines the patient’s financial responsibility.
7. Support your staff in enforcing the financial policy, as some patients may try to negotiate special discounts or different terms for payment. With the exception of Senior Citizen Discounts, no other price cuts or concessions should be offered. You run a professional practice, not a retail store. Once financial policies are set in place, your front desk staff should not consult the doctor regarding granting a discount when the patient is still in the office. Some patients may ask the front desk staff to ask the doctor if he or she would give a discount. Your staff should simply say that the doctor does not get involved in financial decisions.
8. Invest in software training and be sure to sign up for technical support. Maintain a binder with notes regarding the software. Staff turnover is inevitable, and having in-house notes will make it easier to train the new person. Make sure at least two staff members know how to use the software. The doctor needs to know the capabilities of the software, but does not need to know its intricacies.
9. Set up software privileges in such a way that no staff member can delete accounts. Only the doctor/spouse should have this privilege. Provide only one or two staff members with the access and password to alter accounts and enter checks and other payments. Other staff members should have access to the schedule and be able to answer the phone and schedule a patient. They should also be able to read account balances, but not have the privilege to alter balances.
With support from your staff, you should be able to implement the above system in 30-45 days. You’ll quickly be on the road to collecting more money with less hassle, leaving you more time to treat patients and enjoy dentistry.
Article also published here.
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Peter Gopal, PhD, together with his wife, Hema Gopal, M.B.A. and D.M.D., consults with dentists who are intent on building a more profitable practice. Whether you are leaving money on the table due to broken patient appointments, improper scheduling, poor case acceptance, low hygienist productivity, excessive overhead, or unnecessary reliance on PPOs, they can pinpoint your weaknesses and prescribe remedies. Receive a free, realistic assessment of the earning potential of your dental practice by going to: http://www.visionary-management.com/assessment.php
Read more articles written by Peter Gopal
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