1. Provide each patient with your office financial policy.  The policy should outline what will be expected from the patient as their responsibility for services rendered.  Ask your patients to sign it, indicating they have read the policy.
2. Treatment should not be started on a patient until insurance has been verified.
3. When the patient is scheduling an appointment, they should know prior to treatment is performed what the estimated cost of the treatment will be, what is estimated to be covered by insurance and what their estimated out-of-pocket costs will be.  Your office manager should stress to the patient that these are all estimates.
4. The patient needs to be informed that any costs which are the patient’s responsibility are expected at the time of service.  If payment cannot be made, then offering them a third party financing option, such as CareCredit, if your office accepts it.  But again, let your patient know ahead of time that payment is expected at the time of service.
5. The walk out process is very important to ensuring that patients are paying.  We hear too often that there is not an efficient walk out process and the patient just walks right by the front desk without paying.  Not only is payment not being received, but their next appointment is also not getting booked — whether it may be their next hygiene appointment or recommended additional treatment.  The staff needs to take the time to walk each patient out to the payment desk.

Review your internal collection process and determine if there are any areas that need to be improved to avoid miscommunication between the patient and the office to improve collections.  This will also help reduce frustration and uncertainty which the patient may feel by not knowing what they need to pay.

QuickBooks can be set up for a dental office with different levels of security and access.  QuickBooks Pro, the lower-priced version which most dental practices use, has about 10 security areas driven by username.  You can have a staff person enter data for you to help decrease your involvement, yet still have full control and limit the staff’s ability to access the office finances.  For instance, you could have the staff person enter all of the bills to be paid, then you can just print and sign the checks that you want to pay at that time.  The QuickBooks Enterprise version has over 100 security access options, but the software is much more expensive.  This would be worthwhile for only the most serious delegators.

Another option is outsourcing the accounting to a firm like ours.  Different arrangements can be made, depending on what works for your practice, to take a good deal of the accounting, bookkeeping, and even bill paying off of your plate.  In some arrangements, we have an automated system where bills are delivered directly to us and we cut the checks on behalf of the practice.  In other arrangements, the doctor cuts the checks and keeps records in a check register and we do the bookkeeping after-the-fact.  For those who want more control, the dentist or an office staff can perform all of the check-cutting and bill-paying and we do the month-end reconciliations and review and issue management reports.

Dentists who just love accounting and bookkeeping but don’t like spending extra hours in the office doing it have alternatives as well.  Cloud-based servers can be used to house your company QuickBooks file.  We use a company called Right Networks to do this for us and our clients.  This solution allows you to access your QuickBooks file anywhere you have an internet connection.  And not only that — Right Networks performs a backup everyday and your data is more secure than most any dental office.  In addition, it provides convenience for your accountant as well, so no more sending QuickBooks files back and forth.  Your accountant can have their own access to your QuickBooks file on Right Networks.  The cloud solution allows the dental office to use the superior QuickBooks desktop product but retain the “anywhere access” capability of the QuickBooks online version.

Technological advancements and dental accounting experts have changed the landscape of options available to the dentist who wants more free time.  Ask yourself how you can remove some of the redundant tasks from your daily to do list by using one of the approaches above and enjoy the new found time!

Now think about your practice.  What goals have been set for 2012?  Maybe your first step is going to be to actually set a few goals — whether they be personal or professional.  There may be 3, 5, 10 goals that you set!  Break that list of 10 down to recognize your top three and then make those your focus for the 1st quarter.  Monitor the progress and hold yourself accountable.  Once you accomplish the first goal, move on to the next set for the next quarter.  And don’t forget to document your progress!

I have seen in many instances where a dentist will say their goal for the year is to clean up their accounts receivable.  Then, a year passes and the accounts receivable is still an issue.  Many times something like this may not get done because they have several other things that they are trying to accomplish as well and the list becomes too overwhelming.  So start small.  Make your focus to clean up old accounts receivable for the first quarter.  Then if you get that done and have time in that quarter, move on to the next goal on your list.

Some of your goals will obviously take longer than others to accomplish, so be sure to prioritize your list and start working on it!  Delegate what you can to your team and hold everyone involved accountable.

If your goal is to grow the practice, then what do you need to implement for that to happen?  This could vary in many areas like increased production, patient growth, new marketing plan implementation, adding new procedures/services offered by the practice, adding a new operatory and increasing collection ratio, just to name a few.  As you can see, one goal called “practice growth” can turn into an overwhelming list of to-do items!  So be sure to break it down more specifically.  Of those areas, which are the most important for you to accomplish first?  Start there.  Actually, one goal could turn into a whole year’s worth of goals to accomplish — depending on the depth of the details.

Set realistic, attainable goals and stick to that list!  Keep yourself encouraged by documenting, monitoring and tracking your progress!  Good luck!

One particular topic of reflection yesterday was an exercise in identifying what frustrates me.  Try applying this to yourself and your practice.  First, make a list of what frustrates you.  Take 10 minutes to reflect and make a list — practice frustrations, personal frustrations — maybe both.  To start, maybe just try picking 5.  What have you been doing to alleviate these frustrations?  Likely, very little.  It’s these frustrations though that cause headaches and deter your confidence and drain your energy.  How do you feel once you see this list?

Now make a list of what each frustration looks like if it were to be resolved.  They can be resolved, you know?!  Next, identify the strategy you need to implement to make each resolution a reality.  Lastly, make a plan to take a step toward each resolution within the next month (and of course, follow your plan!).

Just this process will help increase confidence and energy.  It will be short-term relief though.  However, eliminating these frustrations entirely will be much longer lasting.  What will you fill your mind with when all of these frustrations are alleviated?  Even if it is more frustrations (hopefully not, but…), at least it’s your 2nd set of 5, and guess what?  You’ve made some great process without even knowing it!

Share with us how this goes — I’m anxious to know how quickly you came up with your top 5.

Don’t forget to mention not only internal financial practice goals that were met, but also any perks and improvements that occurred internally.  Allow them time to reflect on everything that happened in 2011 so they can gear up for the current year!

Focus on related items below as they pertain to your office:

• Started company retirement plan
• Offered additional benefits to the team
• Implemented a bonus system
• Hired new team member(s)
• Offered new service(s) – implants, IV sedation, ortho, etc.
• Equipped additional operatory
• Went paperless
• Increased production
• Reduced accounts receivable
• Increased collection percentage
• Dropped/Added a PPO
• Implemented marketing plan
• Remodeled office
• Moved locations
• Changed hours/days open

Don’t forget to mention goals that were not met or items you wanted to accomplish so that you can focus on accomplishing those goals this year.

During this meeting is also a great time to thank your team as a whole.  Focus on motivating them and getting geared up for 2012!

First, for 2012, you’ve likely heard of the payroll tax cut.  This cut is for your employees and applies to you as well on your income for the first two months of the year.  It is a 2% reduction in the FICA tax until the end of February.  In all likelihood, this will be extended until the end of 2012.  This provision was in effect in 2011 as well (for the first time).  The savings capped at about $2,200 for the year for you to the extent your income exceeds $110,000.  If your income is less, the savings are less.

This is the last year where the 3.8% Medicare surtax on investment income is not in effect.  As a part of the Obamacare package, there will be an additional tax on most types of passive income when your annual income exceeds $200,000 – $250,000 (depending on your filing status).  This would apply to interest, dividends, and capital gains.  Contrary to some circulating emails, however, it will not apply to the sale of your home unless you have a very substantial gain when you sell it (over $500,000 of gain for joint filers).

In addition, the Medicare tax will itself increase by 0.9%, effective January 2013.  This increase will also apply only when your annual income exceeds $200,000 – $250,000.  For a dentist making $300,000 a year, this adds another $2,700 to the tax bill.

The capital gains rate of 15% is also currently set to go away.  It will revert to the 20% rate.  in addition, the qualified dividends rate will also go away and dividends will be taxed at your tax bracket rate, as high as 35%.

There is still a lot up in the air about other changes to come.  It is unlikely that much will be decided until after the elections.  So it will probably be the beginning of next year before substantial change is implemented.  But when it does, look for a combination of rate increases and reductions in deductions.  We can hope for simplification too, but don’t hold your breath.

I recently talked about putting your team together.  You may want to think about this team again when you decide who will be representing you during this transition.

Consult with a CPA about the tax implications of the sale and how the deal should be structured.  Hire an attorney who has experience working with dentists in selling their practices.  You will need a formal practice valuation performed so you will need to hire a professional to value the practice.  Choose someone to value the practice who has experience valuing other dental practices.  You may also want to hire a practice broker to list the practice and assist in selling.

Now that you have considered your team, you need to focus on the practice itself.  The buyer is not only going to look at historical financials, tax returns and a valuation, but they will want to know what really makes up the practice.  Many of these factors can make or break the deal, so be sure to consider the following:

•  Historical production – doctor vs. hygiene – what is your collection ratio?
• Procedure mix – how much of your overall production is driven by cosmetic dentistry, ortho, oral surgery, perio, endo, etc.?
• Insurance companies – review write-offs and adjustments, including Medicaid
• Accounts receivable/Patient financing arrangements – review old A/R and your collection policy then clean up any lingering amounts due (either collect or write them off)
• Staffing – document when and how raises are given, your staff’s performance ratings, benefits, compensation, hours per week worked, etc.
• Fee schedules – document date and amount of last increase as well as how your fees compare to your competitors
• Treatment plan analysis – is there enough dentistry left to be done?
• New patient count – don’t discourage accepting new patients when you decide to sell as it could detract the potential buyer
• Total active patients
• Doctor’s days worked over last year – stay on track with the same schedule you’ve kept the last several years as you don’t want production or collections to suffer right before you sell
• Physical look of practice – ensure the practice is at its best prior to selling and give it any “facelift” it may need
• Doctor schedule vs. hygiene schedule – how booked/busy is your schedule?

There is much more to consider prior to selling, but this list will start you thinking to get you moving in the right direction.

It’s very easy to say that the team you have “works” because you don’t want to take the time to interview new advisors or employees, gather documents required for any new people, interview them, train them, etc.  And maybe the team you have is “comfortable” and they know you.  But make sure they not only know you, but also know your industry.

Whether you are looking to add a new operatory, buy a piece of equipment, find new space for your practice, start a retirement plan, or even add a team member, it’s key that the people on your team understand your industry.

When working with your professional advisors, the more they know about your industry, the better they can advise you.  For example, space needed for a dental practice is very specific.  If your commercial real estate broker knows dentistry, they are not going to recommend a space that would be better suited for a restaurant.  If you are a general dentist, they are going to spend time to see who are the referring specialty dentists as well as other surrounding healthcare professionals.  They are going to ensure that the space you select is going to fit the number and size of operatories you need, as well as factoring in a patient consult room, break room, etc.

When looking to add to your team, make sure the person you are looking for has the skill set you need.  The front desk is one of the most difficult positions to fill and maintain.  I have heard too many times that the practice’s front desk was pleasant and represented the practice well, but didn’t know anything about insurance or have a dental background.  This can be very difficult because it can slow down the process of receiving insurance payments and keeping your collections afloat.  We have also seen where the accounts receivable may start to sit steady in the 90+ days area due to insurance not being submitted timely and correctly.  Again, the key is having someone in a position who knows your industry.

We have also heard the opposite happen – the front desk person knew everything about insurance and dentistry but lacked people skills and the practice was losing patients because of it.  It’s definitely tough to feel that you need a new team member and are having a hard time filling the position, but you absolutely must not settle for someone who is not the right fit all around.  Take your time in the hiring process.  We have seen the best success with hiring when employers determine several months prior to absolutely needing that next hire and begin the search process at that time.  That way they are able to take the time they need to really interview everyone, see if that person is going to be the right fit and do proper training.  If you find that right person, it may sound risky to hire prematurely, even if the practice is not ready for it, but you dont’ want to let a good person go if they meet all of your criteria.  Don’t just hire a warm body to ease a short-term problem.

Take your time and hire the right people for your team and don’t forget to also engage yourself in your team!  Don’t be afraid to re-evaluate the relationship as they will be a big part of the success of your practice!

I just finished Creating Magic: 10 Common Sense Leadership Strategies from a Life at Disney, by Lee Cockerell.  I try to read both fun, entertaining books for pleasure, while also mixing in some business books. While this book, as you can probably tell from the title, is geared toward the business side, it was also entertaining in some respects.  The author used a lot of great Disney examples to make his points.  And let’s face it – Disney is just plain fun!  I learned some neat things though.  For instance, did you know there are tunnels that run underground throughout Disney World?  These tunnels are used by suppliers, vendors, and employees to travel throughout the parks and remain unseen by guests.  Who wants to see a truck full of frozen food unloaded when they’re at the most magical place in the world?

One of the 10 strategies in the book is a great reminder for me, so I’d like to share it.  The author’s strategy and point is that there is a difference between being professional and being a professional.  He uses some good examples and explains this point much better than I.  As a dentist, you are by default a professional.  But being professional takes effort, as Cockerell would say, not just a license to practice dentistry.  The author shares some tips to help you be professional.  These include a few of my favorite reminders:  a) be a role model — you are always on stage, b) in problem-solving, focus on collaboration rather than conflict, and c) be excited about coming to work every day and share this with your employees.

Being professional takes effort — with your dental team, your patients, and your colleagues.  But being a leader takes effort.  And great leaders put effort into being self-aware of areas where they are weak and where they are strong.  Once you know that, you can work on both.

So are you professional?  Or are you just a professional?

What do you think?  What does your team think?  Is your team a team of professionals?  Or are they just each individually a professional?  Remind yourself of these every now and then and work them into your routine.  Be professional!

Read Amber’s full bio here.