3.7.14 Issue #626 info@mckenziemgmt.com 1-877-777-6151 Forward This Newsletter
 

Managing The Dollars
By Sally McKenzie, CEO

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Which money metaphor best describes the financial state of your practice these days? Put your money where your mouth is – cash up front practice, eh. Another day, another dollar – clearly a collection problem here. Cash cow – well, aren’t you the lucky one. While some of you may be laughing all the way to the bank, others are on the verge of losing their shirts. And oftentimes, the difference between the two comes down to how you manage the dollars as much as the dentistry.

In last week’s article we discussed two key factors that are critical to creating steady cash flow in the practice:
#1 - Establishing a Sound Financial Policy
#2 - Clear Collection Protocols

But having those in place is only part of the equation. When it comes to implementing your practice’s financial policies, you need one more key element:
#3 - Tap the Right Person for the Position

Certain people are simply not cut out for the position. Effective collections requires someone who is assertive, polite, tactful, confident, and goal oriented. The person asking for payment must understand it is her/his job to collect from patients and be accountable for the results. But they can’t do it without your support. If your friends and family are regular exceptions to the payment policies, you are undermining your practice’s ability to maintain an effective financial policy.

Now that you have the policies, procedures and people in place, you need to determine if you’re poised for the poor house or livin’ large. In other words, what’s the status of your accounts receivables? It can be ugly. It’s a task that many dentists just don’t want to face. After all, it can be pretty disconcerting to realize you have $150,000 or more in uncollected fees eating away at your bottom line, dollars that could be used for doctor and staff training, new equipment and technology, retirement, perhaps even a salary increase or bonus. Ignorance is expensive. So get the numbers. Face the facts. And tackle the job. Here’s how:

1. Generate an aged accounts receivable report monthly that lists every account with an outstanding balance and date of last payment.

2. The AR report also should “age” the receivables showing the “current” column, which is revenues produced in the last 29 days that have not been collected, as well as a breakdown of accounts that are 30, 60, and 90 days past due.

3. Total all monies over 90 days delinquent. The percentage should not be over 10% of your total accounts receivable.

4. Examine the charges in the "current" column of the report. These are uncollected monies produced in the past 29 days. Because the practice should have a minimum of 45% over-the-counter collections for the month, there should be no more than 55% in the current column awaiting insurance reimbursement.

5. Always run the report with credit balances because credit balances need to be added back to the total accounts receivable.

If the total exceeds your monthly production, it's a red flag indicating problems in one or more of the following areas:

Insurance System. The financial coordinator should know the amount anticipated from the insurance company. However, the patient should be expected to pay the bill and receive reimbursement from the insurance company.

Billing. Don’t wait to send bills once a month. Include a self-addressed envelope and state the date that payment is due. Consider electronic billing and a vehicle for patients to pay online. Bills that are 30 days past due should include a personalized delinquent message. For example, “Dear Mrs. Jackson, we did not receive your payment on Sept. 15 as requested. If you are experiencing financial difficulty, please contact our office. Otherwise, we ask that you take care of this account balance by March 1. Sincerely Julie Moore, Business Manager.

Financial Policy. Establish/update it. Communicate it. Live by it.

Accountability. Make one employee accountable for collecting money, generating accounts receivable reports, and following up on delinquent accounts.

Remember, patients that balk at the notion that you deserve prompt payment are also more likely to be the last minute cancellations and no-shows that wreak havoc on both your schedule and your bottom line. The vast majority of your patients are more than willing to meet your prompt payment expectations, as long as you communicate your policy clearly and in advance. And that, you can bank on.

For more information on this topic, visit my blog: The Lighter Side

Interested in speaking to me about your practice concerns? Email sallymck@mckenziemgmt.com
Interested in having Sally McKenzie Seminars speak to your dental society or study club? Click here.
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Carol Tekavec, RDH
Hygiene Consultant
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Stealing!
By Carol Tekavec RDH

Like many other business owners, dentists may find themselves victims of embezzlement. Some sources indicate that as many as 6,000 dentists a year have money stolen from them by employees. Everyone has heard of a dentist who has suffered from employee theft, and many have had the unfortunate experience themselves. It is a demoralizing and saddening event. Preventing theft is a better course of action than dealing with it after the fact. However, the methods used are often inventive, well thought out, and ever evolving. Dentists don’t want to believe that a trusted employee might be stealing from them, so they will often ignore the warning signs:

• An employee who comes in early and stays late, offers to work on accounts, bills and other office “paperwork” when the office is closed, and takes few vacation days may be working on something other than office concerns. This employee is typically someone who is considered “essential” and may have been with the practice a long time.

• An employee who resists anyone helping with his/her work load or is secretive about administrative or security software codes raises red flags. The employee may also object to any type of outside audit, citing “no need to spend money on something I can handle myself.”

• An employee who maintains control over deposits and check-writing by asserting that the dentist is “too busy to do it” may be manipulating the finances. This can be exacerbated when the dentist does not understand fully how finances are being handled on a day-to-day basis and “trusts” the employee to take care of things.

Some of the methods used for embezzlement:

• Changing or eliminating payment entries and/or setting up false office accounts are common mechanisms for theft. After deleting a charge on a patient account, an employee may endorse that patient’s check to her/himself, or simply open a fake practice account and deposit payments into this account rather than the true office account.

• While cash payments are not as common as they once were, they still offer an opportunity for theft. A separate receipt book can be kept so patients get a fraudulent receipt, any charge on the patient’s account is deleted, and the employee keeps the cash.

• Payroll checks can be forged. Additional paychecks made out to an employee can be created and may not be caught by the dentist’s bank. If the bank does catch discrepancies, a front office employee may intercept bank notifications preventing the dentist from learning about the problem.

• Employees who have access to an office credit card may use the card for cash advances to themselves or to pay off personal bills. Even if the dentist signs all credit card payments, he/she may think the payment is going to pay off the entire bill, rather than only an installment due on a much larger balance.

• Falsifying hours worked per payroll period is another embezzlement method. This can work even if the dentist employs an outside payroll service. One office employed two individuals who worked together to falsify their hours over a ten-year period! The payroll service authorized the checks, and because the dentist trusted the front-office employee to handle check signing, (even with payroll checks!) he did not discover this for years. The employees were careful to make the hours falsely worked not too extravagant in order to prevent suspicion.

• An employee discovered she could hijack insurance checks by signing over the payment to herself and using an ATM to deposit them in her personal account. Again, the bank sent letters to the dental practice, but the employee opened all mail and discarded the notices.

What should you do if you suspect stealing?

• Dentists are advised to compile proof before confronting an employee. This may require the assistance of an outside accountant, an office software representative, or the practice’s bank. Credit cards that the employee has access to should be cancelled with new cards issued to the dentist alone. It is also a good idea to run a credit report to see if fraudulent accounts have been opened in the dentist’s or office’s name.

• If proof is discovered, as painful as it may be, all evidence should be turned over to the police and prosecution of the employee should ensue. Prosecution ensures that the crime becomes public record.

• Employee restitution may be encouraged by the fact that embezzled funds may be taxable. Inform the employee that a 1099 will be issued to them if they do not pay back the stolen money.

Preventing theft is preferable to dealing with the aftermath. A dentist should keep a close eye on all financial processes of the practice. Employees should not be allowed access to security codes for billing or accounting. Random financial audits should also be performed. A single employee should not be in charge of “everything” and all employees should be required to take time off.

The dentist should be responsible for signing all checks with supporting documentation required, especially credit card bills. Time-cards and hours should be carefully evaluated to make sure they correspond to actual hours worked. Require your bank to send all statements and other letters or notifications to your home address, and be aware of amounts the practice is issuing in patient refunds, account adjustments, or write-offs.

Dealing with office theft is terrible. Not only is it a betrayal of trust, it also makes us embarrassed that we did not see the signs before being robbed. Despite this, dentists can take comfort in knowing they are not alone. Very few business owners have escaped employee theft of some type. The vast number of dental office employees are honest! We let our employees know that we value their honesty when we take responsibility to prosecute the dishonest ones.

Carol Tekavec RDH is the Director of Hygiene for McKenzie Management. Carol can improve your hygiene department in just one day of training “in your office.” Interested in knowing more about how to improve your hygiene department?  Email hygiene@mckenziemgmt.com.

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Nancy Haller, Ph.D.
Leadership Coach
McKenzie Management
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Master Your Hot Buttons and Master Your Practice
By Nancy Haller, Ph.D.

During a recent coaching call a frustrated doctor said to me, “It’s not my job to police employees!!” And you can guess my reply.

The reality of a one-man-band dentist just doesn’t exist. Were you an accountant, an attorney, or a psychologist you would be able to work alone with no employees to manage. But in dentistry it just isn’t as easy. If you have people on your payroll, it is your job…hopefully to “lead” rather than to “police”. The key is to recognize what pushes your ‘hot button’ and to stay one step ahead to avoid losing your cool.

Hot buttons are things that annoy, irritate, and/or anger you. If another person is pushing those hot buttons, there is a greater chance that conflict will occur. The ability to manage conflict effectively represents a strategic business advantage. Conflict costs you time and money, and it impedes quality patient care. The ability to handle difficult situations constructively and competently is critical to practice success.

The first step to handling conflict is to understand your hot buttons. Here is a list of the kinds of people and situations that commonly upset us and potentially cause conflict to occur…in short, your hot buttons.

Unreliable - those who are unreliable, miss deadlines and cannot be counted on
Overly-Analytical - those who are perfectionists, over-analyze things and focus too much on minor issues
Unappreciative - those who fail to give credit to others or seldom praise good performance
Aloof - those who isolate themselves, do not seek input from others or are hard to approach
Micro-Managing - those who constantly monitor and check up on the work of others
Self-Centered - those who are self-centered or believe they are always correct
Abrasive - those who are arrogant, sarcastic and abrasive
Untrustworthy - those who exploit others, take undeserved credit or cannot be trusted
Hostile - those who lose their tempers, become angry, or yell at others

 People or situations that irritate you potentially provoke conflict and produce destructive responses. The hotter the hot button, the more likely you are to respond with strong negative emotions. The point is, as the leader of your practice, you have a choice. Even when it feels like you want to ‘strangle’ (metaphorically speaking) him or her, you have a choice. You can choose constructive responses to conflict that decrease tension and increase group functioning, or you can choose destructive responses that increase tension and decrease group functioning.

Choosing the constructive response sometimes seems impossible, especially when we feel angry. But if we are aware and understand our responses and take responsibility for our hot buttons, we move through conflict more effectively. 

McKenzie Management is now offering an assessment instrument dealing with conflict behaviors in the workplace. The Conflict Dynamics Profile® (CDP) provides a powerful way to improve self-awareness of what triggers conflict in individuals as well as how they respond to conflict. Psychometrically sound, the electronically administered questionnaire is backed by solid evidence of reliability and validity. Furthermore it provides practical solutions and recommended behaviors that promote effective workplace conflict resolution.

The CDP® is easy to use and can be completed online in 20-25 minutes. It is appropriate for practice leaders and for employees alike. It includes an eight-page report that incorporates data on 15 conflict behaviors and nine workplace “hot buttons.” A 40-page development guide delivers helpful suggestions for improving the responses to conflict. The report is reviewed with a coach by telephone making it a seamless process.

Workplace tension is unavoidable. Even with a positive attitude, conflict is complex and challenging. You will always face situations where members of your team have ideas that are incompatible. It’s inevitable. The good news is that there are well-researched strategies to help you.

I am very excited to share this new service with you. The first step in any journey is to know where you are right now, and the Conflict Dynamics Profile® provides you with that knowledge. Leaders and teams who become conflict competent are much better positioned for successful outcomes and satisfying workplace relationships. Prepare to move forward with confidence. Give me a call or send me an email. I’m here to help you and your team to master your hot buttons.

The Conflict Dynamics Profile® is a registered trademark owned by Eckerd College.

Dr. Haller provides training for leadership effectiveness, interpersonal communication, conflict management, and team building. If you would like to learn more contact her at nhaller@mckenziemgmt.com or call (877) 777-6151

Interested in having Dr. Haller speak to your dental society or study club? Click here

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