Clean Up Your Accounts Receivables
In the dental business office, there are many systems and protocols that we as consultants review to determine the “health” of that system. This article is to address the area of Accounts Receivables.
What is Accounts Receivable?
It is often confused as to whether the portion that the insurance owes is considered part of the Accounts Receivable…it absolutely is! In lieu of your practice asking the patient for payment, you have elected to ask for the payment from their insurance carrier. However, it should be indicated in writing that the patient is ultimately responsible for the entire amount of the fee for the services provided. Somewhere along the way, unfortunately, patients do seem to forget this part.
What about the account balances that you see on your report that has a (-) in front of it, such as -$100.00? This indicates that the account has a “credit balance.” This was discussed on my last article. If these accounts are not excluded from your Accounts Receivable Report, your report will be incorrectly reduced by the total amount of the credit balances.
The Accounts Receivable Report
What is important is that when you generate your Accounts Receivable Report, it does not include the credit balances.
Also, some software keeps all of the Outstanding Insurance Claims in Current, for some reason. Fortunately, there is also a breakdown available of the amount that is considered insurance so you can determine how much is actually current. Remember, even though it is outstanding from the insurance company, it is still considered part of your A/R.
Another possibility is that all the credit balances remain Current if you include them in your report.
A follow-up call should also be placed at 45 days past due, attempting to make firm financial arrangements for payment of the balance on the account.
Should you elect to ignore it but feel that it is a waste of postage and paper to continue to send statements, at least flag the account so it is not included in your “active” Accounts Receivable dollars at some point in the near future.
Your Financial Coordinator works hard to maintain a healthy A/R of 1x your net production. It is discouraging for her when she is working with accounts that are over a year old, the patient hasn’t been seen and no payment has been made. For her sake, write this account off so you see what your “true” A/R is.
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