Practice Profits in 1, 2, 3
Money matters, money talks, money makes the world go ‘round, time is money. Sound familiar? Yes, those tired yet true clichés attempt to quantify the value we place on money and the impact it has on our lives. Although money won’t buy happiness, knowing you can afford the mortgage, pay the lease, meet payroll and take a long overdue vacation will certainly have you breathing a little easier and sleeping a little sounder.
Understandably, in any dental practice there are likely to be occasional periods in which revenues dip. But if each month’s balance sheet has you feeling like the epitome of that fool and his money, mastering a couple of key financial principles will have you in the money sooner rather than later.
First, take a minute to conduct a simple 10-point financial assessment.
1. Are you making as much as you believe you should/could be?
Answering the questions above should give you a general idea of how your financial situation is affecting fulfillment of your personal and professional goals. Now take a close look at three key areas that have a direct and powerful impact on your revenue gains and losses: financial policy, collections, and accounts receivables.
#1: A Policy in Writing = Money in Hand
The goal is to collect most if not all of what patients owe at the time services are rendered. However, if you plan to allow patients to carry balances, establish specific parameters and don’t stray. Determine how long you are willing to wait for payment. A policy that extends credit to patients indefinitely is too lenient and is a liability for your practice. A policy that is too strict, such as one that does not accept insurance and/or does not provide a few payment options, is a deterrent to patients.
Post the policy on your website. Provide it in writing to all new patients in the patient packet. Remind existing patients in writing prior to the start of restorative or elective services and when educating patients about new services offered by the practice.
#2: Collect Today, Pay Bills Tomorrow
Be clear, direct, and polite. “The charge for today’s restorative treatment is $368. Will you be paying with cash, check, or charge? As a special service to our patients, we are happy to submit your insurance claim and the payment will come directly to you.”
Insured patients should be expected to pay all of their payment responsibility when services are rendered, unless their portion is over $200. For more costly procedures, be prepared to provide convenient payment options that are beneficial to both the patient and the practice. Consider offering a slight adjustment in the fees, such as 5%, for high-dollar procedures paid in full that will not be submitted to insurance as well as CareCredit payment plans.
Next week, #3 in your 3-step plan to practice profit.
For more information on this topic, visit my blog: The Lighter Side
Interested in speaking to me about your practice concerns? Email firstname.lastname@example.org
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