As a dental practice owner, you know that having accounts receivables is part of the business. But that doesn’t mean you should just wait for the money to get paid. Improving your collections is vital to sustaining growth, and if your cash flow isn’t moving the way you want it to, it’s time to make changes.
In this article, we’ll discuss a couple of tips that you can use to improve your collection rate and maintain a steady cash flow.
1. Offer in-house financing options
The first step in improving your collection rates is to provide in-house financing options to your patients. Most practices refer their patients to third-party financing like CareCredit, especially if their balance is on the higher end of the spectrum. But if you’re dealing with smaller balances like $1,000 and below, in-house financing is a better solution.
For one, you can offer your patients flexible payment terms. Whether two months, three months, or even six months, in-house financing makes it easier for your patients to pay their remaining balances. Patients can choose a payment schedule that best fits their finances, thus making them feel more confident with their payments.
E-commerce websites have been implementing in-house financing to great success, as it helps boost conversion rates and simplify payment processes. Ideally, you want to offer in-house financing to patients with a reliable track record of making payments as it doesn’t require a credit check.
By intelligently choosing which patients to offer in-house financing, you can establish goodwill with your patient base and accelerate your practice collections.
2. Provide flexible payment solutions
In this day and age where physical contact is limited, patients seek convenient ways to make payments. Card payments and direct deposit are the new norms, while written checks slowly fade into obscurity. Emarketer predicts the mobile payment industry will grow by 5.7% in 2023. If your practice still relies on checks as a primary payment method, you’re getting left behind by the industry in general.
Now is the time more than ever to offer digital payment solutions to your patients. Beyond credit cards, digital wallets and Pay-by-Text are making their way to the dental industry, and patients find these solutions highly convenient and accessible. The payment process is fast, quick, and simple, allowing you to speed up your collections and encourage your patients to make timely payments.
Google Pay, Apple Pay, AC H, and credit/debit cards are the payment options worth exploring. Make sure your patient knows your payment solutions so they can utilize them to full effect.
3. Introduce patients to in-house membership plans
Like in-house financing, in-house membership plans aim to reduce the friction between you and your patients. The goal is to cut out the middleman (insurance company) and provide your patient base with comprehensive and affordable dental care. Patients can choose to enroll in a monthly or annual membership to avail the benefits and save on preventive care procedures.
There are plenty of benefits to offering in-house membership to your patients. First, you establish practice loyalty. By offering affordable dental membership, your patients will appreciate the cost-savings and will lean more towards availing of your services.
Second, you add a new revenue stream to your dental practice. If you can convince 20-25% of your patients to subscribe to your membership, you can greatly reduce your accounts receivable balance. Lastly, in-house membership plans are a great way to attract new patients. It’s an essential practice strategy that enables you to provide quality dental care while generating more revenue for your practice.
4. Approach reminders and follow-ups differently
Collecting payments is a time-consuming task, and often practices are hesitant to follow up with their patients because they don’t want to appear annoying or intrusive. But don’t let the negative thoughts hold you back in collecting accounts receivables. The key to efficient collection is to be smart with your approach.
Instead of sending additional statements every 30-60 days, you need to develop a collection strategy that focuses on two key aspects; tone and frequency. Your tone should be discreet and straightforward. Too friendly, and patients will likely ignore your message. Too strong, and you risk creating a negative impression.
Frequency is something that most practices get wrong. Ideally, your practice should be sending reminders at least a week after the patient receives the billing statement. We find that sending texts and emails is the preferred messaging channel choice. With emails, your messages go straight through the patient’s inbox and notify them of their billing statement.
Texts are more than welcome, so long you keep the frequency close to one or two messages a week. In our opinion, phone calls are a last resort as they may appear intrusive to patients. Only make a collection call if the patient has zero responses after two weeks of sending reminders.
5. Communicate your payment policy with your clients
Patients expect you to provide quality dental care the same way you expect them to pay their bills on time. If you want your patients to meet your expectations, you have to be clear with your payment policy upfront. The first time you interact with them, make sure that they understand everything your payment policy covers, such as:
- Financing options
- Billing statement schedules
- Payment methods
- Past-due policies
- Flexibility with payments
It’s a good idea to distribute documents to your patients so they can read up on the documents anytime. You can also send a PDF copy of your payment policy for convenience. Perhaps the most important thing is that your policy strikes the perfect balance between leniency and strictness so that patients can adhere to it without any difficulties.
6. Make use of technology
Technology in the dental industry is vast, and practices that use modern software are the ones that excel in collecting payments. Electronic billing allows for seamless transactions between you and your client. Patients can log into their account, view their billing statement, and pay their balance at their convenience.
On the other hand, dental practice management software comes complete with everything you need to optimize your collections. You can schedule reminders to send to patients, notify your staff on who to follow up on, and simplify the creation of billing statements. You can also automate repetitive collection tasks to free up time and focus on other important matters.
7. Incentivize your patients to pay upfront
Upfront payments are a huge boost to your practice’s cash flow, and patients are more than willing to make payments upfront if you give them enough motivation. One way to achieve this is through incentives, which can help you deliver a strong value proposition to your clients.
You can incentivize your patients to pay upfront by adjusting the fee for advance payments. Instead of presenting it as a discount, portray the fee adjustment as your way of showing appreciation for upfront payments. That way, patients will have extra motivation to pay ahead of schedule.
Some practices think that asking for full payment upon checkout isn’t an ideal option, but it can significantly enhance your collection rates when executed correctly. Naturally, most patients won’t want to pay in full straight away, and that’s okay. You’re providing them with an option to pay in full if they desire.
8. Train your team to handle collections efficiently
Part of an efficient collections process is a well-trained team that knows how to communicate with patients and fully understands your payment policy. When collecting payments, you must clarify the exact tone you want to deliver to your patients. Otherwise, your staff may have miscommunication issues and affect the patient/practice relationship.
You can assign a staff member to oversee the collections process. Their tasks include:
- Monitoring collections of other staff.
- Implementing payment policies correctly.
- Improving financial protocols in your dental practice.
When you have a well-trained staff that understands the flow of collections, your practice will benefit from streamlined cash flow and improved patient satisfaction.
A lot goes into improving collections in your dental practice. But once you take the time to implement these tips, you’ll notice a huge difference in your cash flow and accounts receivables. Don’t let delinquent accounts hinder your practice growth. Instead, make the necessary adjustments to bump your collection rates and ensure dental practice success.
Maintaining the financial health of your dental practice is crucial to generating good profits. If you need any help with expert bookkeeping services, our team is here to help. Feel free to fill out the form below, and our team will get in touch with you shortly.