GAP Australasian Dentist Mar Apr 2020

Category Austràlàsiàn Dentist 115 àoluàn tà Roger Mendelson à he reality of modern life is that many patients under about 45 years of age are unable to rustle up $3,000 or $5,000 to cover major dental procedures. However, there is an increasing tendency by this group to buy what they want now and pay for it later. àhis explains the remarkable growth in businesses such as Afterpay. Cosmetic procedures are clearly something many of them desire and they have the income to afford it – just not the cash. ào tap into this market, the approach is very different from pay-on-the-day procedures. àhis article will discuss the simple principles which can be applied to enable your practice to provide credit but in a way which involves low risk of patients not paying. Find out about the patient My suggestion has always been to ask new patients to complete a àew Patient Form (“Form”). àather than you reinventing the wheel, à suggest that you download a F Form from the Prushka website which has been developed especially for dental practices (http://www.prushka.com.au/ forms/req_forms_CreditApplication.cfm). Simple credit checking Credit checking really comes down to three very simple issues: u àf the patient is new to your practice, check with the previous dental practice as to whether or not there are any issues you should be aware of in relation to the patient; u Find out where the patient works. àf he has a steady, permanent job, your chances of ultimately getting paid are good; u Find out whether or not your patient is a home owner, as opposed to a renter. àf he is a home owner, the risk element substantially drops. The correct paperwork Ask your accountant to prepare tables so that you can provide two estimates. One being pay-as-you-go and the other being pay over 12 months by regular monthly payments. àhe latter should incorporate a financing cost worked out at approximately 10% per annum but it should not be expressed as interest but rather be included in the total amount payable each month. Having the correct practice trading terms is critical. Many of the terms needed are technical in nature but are required in the event of there being a default or a dispute. An essential term is that in the event of default, the patient becomes legally liable to pay all debt collection costs. ào obtain our recommended clause for this go to: http://www.prushka.com . au/products_and_solutions/Consumer_ Clauses.cfm and download the clause for free. àhe trading terms should be prepared by an experienced lawyer because having the correct terms is critical in the event of there being a default or dispute. As an example of cost for doing this, Mendelsons àawyers offer trading terms prepared specifically for your practice by an experienced lawyer for the total cost of $1,485.00 including G . àhe paperwork should include a direct debit authority, so that you can deduct the monthly payment from the patient’s bank account or credit card. Default Cease work if the account is in arrears. àhis is more an ethical and moral issue than a legal one. From the legal perspective, it is best to cease carrying out ongoing work if the account is in arrears. However, you will need to balance this with your ethical obligations. Take action quickly àhe two standout reasons why we fail to collect a dental account referred to us are: u Credit was provided to a patient who was high-risk in the first place, probably had a bad credit record, unlikely to have a regular, reliable job and almost certainly is not a home owner. Or… u àhe practice waited too long to refer the account to us. àf the account is six months old when it is referred, which is not uncommon, the patient has already received the message that you are not serious in collecting the account. By that time, the patient has probably moved to another clinic and has very little interest in paying you. By following the simple steps outlined above, you will be incentivized to refer your overdue accounts to a debt collection agency at an early stage, because the full debt collection costs will be added to the account and if the account is collected, the default patient will have paid all debt collection costs. Summary àhere is no reason why your practice could not expand into carrying out more high- end procedures, by tapping into the under 45 consume-now/pay-later generation. By following the principles, it will be easy to administer, your cash flow will be improved and you will have minimal bad debts. u Providing credit will increase your revenue but need not lead to losses from bad debts By Roger Mendelson Roger Mendelson 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 58,000 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. Practical advice for dental practices wishing to carry out more high value procedures