GAP Australasian-Dentist-May June 2019

126 AustrAlAsiAn Dentist FInanCe F ollowing the tips below will cost you nothing to implement, will take up minimal time and are guaranteed to substantially improve your billing and collections system and thus improve your cash flow and reduce your losses from bad debts. TIP 1 – Appoint a credit officer this is a clunky term for a simple but important job within your practice. someone needs to be appointed to be responsible for implementation and proper operation of your billings and collections system. this person must want to do the job, must provide adequate reports and must be empowered to make decisions. the credit officer need not necessarily be the person who is doing the work but must be the person who takes responsibility for it. in most practices, the credit officer will be the part-time accountant. TIP 2 – Use New Patient Forms All the information you need to know about the patient, which will be invaluable in terms of accessing credit risk and ultimately in terms of successfully recovering monies due, will be contained in the form. rather than me explaining to you what the form should include, i suggest that you download a free Credit Application Form for dentists by going to http:// www.prushka.com.au/forms/req_forms_ CreditApplication.cfm. An important question on the Form is the name of the previous dentist. if you have concerns about the patient, better to find out now rather than later. if the patient left the previous dentist because he owed money, only take him on as a patient if he pays for each step up front. For a family situation, the Form details who is covered by all new patients. For example, it may specifically cover his step-children. it is important to have this Seven simple but highly effective tips for operating a best practice billing and debt collection system By Roger Mendelson included in the Form because if the family split up, he may then turn around and disclaim liability for paying dental bills for the step children. the standard free new patient Form incorporates basic credit terms. One of the most important ones is a provision that if the account goes into default, the patient will be liable for all debt collection costs incurred by your practice. TIP 3 – Pay on completion this is becoming standard practice in most clinics. the main exceptions to this tend to be for repeat visits and these often involve accounts with a higher quantum. TIP4 – Invoice and Statements Get the invoice out, preferably by email, no more than the day following the service. test the invoice format to ensure that it provides concise, clear instructions on how to make payment. include a note on the invoice that “in the event of this account being in default, all debt collection costs incurred will be added to the account, in accordance with our trading terms”. there is no reason for sending more than one follow-up statement. the statement should clearly state that it is the first and final statement. TIP 5 – Get on the phone this is a critical step. On the day the account is due for payment, a phone call needs to be made and the question asked: “is there any reason why this account is not paid?” if there is a dispute with the account or with the service provided, deal with it at that stage. Don’t let this be used by the patient later as a means of avoiding payment. TIP 6 – Don’t wait more than 30 days if your account is unpaid after 30 days and a statement has been sent and a phone call made, heed the warning. this account is a The writer is CEO of Prushka Fast Debt Recovery Pty Ltd and is principal of Mendelsons National Debt Collection Lawyers Pty Ltd. Prushka acts for in excess of 57,000 small to medium size businesses across Australia and operates on the basis of NO RECOVERY – NO CHARGE. www. prushka.com.au Free call 1800 641 617. The writer is also the author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival, both published by New Holland Publishers. Roger Mendelson potential bad debt and action needs to be taken. the most common reason for dental accounts not being paid are that the practice waits far too long and the patient then forms the view that it is not serious in collecting the debt, so it goes to the bottom of the pile. in addition, the longer the period, the greater the chance that the patient will move and will be difficult to find or will lose his job and thus not be able to afford payment of the account. TIP 7 – Always outsource there is only so much your practice can do in-house to collect accounts. Beyond a certain point, more resources, skills and leverage are required. Don’t keep hanging on to the account in the hope that “something will happen”. it rarely does. the debt collection agency should have an established record in collecting dental accounts and should also operate on the nO reCOVerY – nO CHArGe basis. When submitting the account, confirm that you have included default provisions in your trading terms which form part of the new Patient Form, so that the agency will collect an amount which covers the original debt plus collection costs. in summary, there is no cost at all in setting up the process outlined above and results are guaranteed. u