Your practice seems to be doing well and there’s no doubt that you work very hard. So, how can you explain that feeling you get – the one that often comes at the end of what appeared to be another productive month? The not-so-great feeling that comes from realizing that even still, there seems to be little left for you to take home. Cash flow is the culprit, and it could be keeping you a prisoner of your practice.
It starts as a small snowball within your financial systems and continues to grow as it circulates repeatedly with each application. Have a look at these areas to see if anything looks familiar and needs attention right away:
Do you have the right performance parameters in place for Accounts Receivables (A/Rs) in your office? There are two that I strongly suggest you check out. First, your collections each month should average out to 98% of your production. That translates to a collection of $98 for every $100 you bill. Second, the total amount owing over 90 days should be less than 15% of your overall A/R. For example, if you have $5000 owing overall, there should be no more than $750 in your over 90 days column. Delinquent accounts should be reviewed on a regular basis with the responsibility resting with one person. Collection will be difficult when they’re reviewed sporadically. Set protocols in place for all the different steps of collecting from delinquent accounts.
- Pay attention to your production versus your overhead. Ask your accountant for the figures to guarantee you’re looking at the correct balance. If the balance is off, it may not mean you have to cut expenses, but it may mean that office production needs to increase. The increase doesn’t necessarily come from your chair, it may have to come from the hygiene department or associate performance. Seek expert help with the systems in these areas if this is the case.
- Do you have consistent communication throughout the team regarding all financial discussions around treatment? As owner and dentist, you’re not the one to be discussing finances with the patient, but rather, treatment options and ‘ballpark’ estimate if pressed. But you do have to discuss options with your team that will fit with the financial setup being offered to patients. It could be the treatment coordinator or the administrator who sets up the original financial arrangement with the patient, but regardless, consistency is the key. Everyone should keep notes of all discussions. Anyone who looks at a patient record should be able to convey the same message.
- Do you have consistent communication throughout the team regarding treatment? Everyone in the office should be able to explain treatment to a patient in a reliable manner. The person asking for and processing payment must be able to clearly explain the treatment as well as the person who is delivering it. It’s completely unprofessional to have a patient question a fee and an administrator without the answer.
- Hold off the payment! What I mean is, make it the last thing to ask a patient when they come to the desk. Your patient comes first. They should be first asked about their appointment experience, then, when they would like to book their next appointment. Lastly, have payment discussion. I don’t think I need to explain (but I will), that to first ask for payment suggests that nothing is more important to the office than money. It’s always the wrong message.
- Are you giving the patients what they need to pay? A variety of payment options is very important to patients, now more than ever. Insurance assignment is excellent customer service. It won’t interrupt your cash flow if set up to receive copayment at the time of the appointment. Another way to boost your acceptance rate – offer three months of payment on major restorative (ensure credit card information is on hand). Take it a step further and align your practice with a company that provides third-party financing for dental practices!
Communication, consistency, and excellent customer service, all strengthen the efficiency of your financial systems. You work hard every day of the month for your patients and your practice, be sure you’re taking home your fair share.