Many dentists are experiencing a significant increase in practice debts, largely due to the fact that more people than ever are unemployed or simply cannot afford to purchase dental insurance. If you are a dentist who is struggling with high amounts of practice-related debt, the tips below could help you get it under control and to the point where it is more manageable in the long term.
1. Assess Your Cash Flow
This can be done by logging the figures for net production and collection over the past year, the percentage of patient accounts that have been outstanding for 90 days or more and any amounts that are being repaid monthly for loans, leases and/or business credit cards (if applicable). Other expenses to consider include dental supplies, lab fees, salaries, benefits, taxes and any other expenses that you pay for each month. This will enable you to see whether you have enough money coming in to cover your costs each month or not.
2. Hire a Professional to Evaluate your Finances
After assessing your cash flow, it’s a good idea to have a professional evaluate your financial situation and determine what the best method(s) will be to reduce the amount of debt your practice has. In some cases, a financial expert may recommend loan consolidation or even finding premises that you can purchase at a better rate than you are currently paying for a rental agreement or lease so that you can reduce expenses. Once you are able to successfully reduce your expenses, you will be able to channel more money towards repaying any existing practice debt.
3. Ensure that Bills are Mailed ASAP
If you only send out bills 30 or even 60 days after dental work has been done, you stand a far higher chance of not being paid than if you had billed the patient immediately. Implement a policy whereby invoices are sent to patients or their respective health care providers within a day or two at the most, as this will help improve payment rates substantially.
4. Be Proactive About Debt Collection
After you’ve found ways to reduce your monthly debt repayments, it’s time to implement a system whereby outstanding accounts are followed up on timeously. Although it may cost you an additional salary each month to hire a dedicated person to do this, in most cases, you will be able to recover far more than that amount in outstanding debtor accounts within a week or two at the most. Additionally, it will help take a lot of stress off other employees, who will then be able to better serve your patients.
5. Implement the Use of SimplePay
Most patients only get approximately half of their dental treatments covered by insurance, which means that many of them will either request that they can repay it over a specified amount of time or worse, default on the balance completely. However, if you introduce them to SimplePay, they will be guaranteed to receive the treatment they need, while you as the dentist will be able to rest assured that you will be paid in full for the work you have done.
Keeping your practice debt under control will not only enable you to manage your finances in the best way possible; it will help relieve a significant amount of stress for you as well.Continue Reading ›