Staying On Top of Collections

February 8th, 2012 10:10am
Amber Banks

We often hear that there is a miscommunication between the front and back office when it comes to collecting from patients.  How do you avoid causing the patient any misunderstanding with what is due at the time of service?  Here are several ways you can streamline it.

  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.

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Three Options to Relieve Your Accounting Stress

February 2nd, 2012 9:24am
Adam Decker

The last thing most dentists want to do at the end of a day of seeing patients is accounting.  Wouldn’t you rather just get home and do something more constructive or enjoyable?  But of course it can’t be completely avoided.  You have to have some sort of accounting system for tax reporting, and it’s best to have the resulting reports for decision-making purposes and making management decisions.  Here are three options to help relieve some of the accounting from your plate, yet enable you to still have the information you need.

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!

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Get Focused!

January 24th, 2012 8:19am
Amber Banks

Many of us set new goals as we enter into a new year.  I always set several personal and professional goals that I want to meet by the end of the year.  I then break that list down by quarter so I feel a bigger sense of accomplishment throughout the year.  Plus, I’ve found that it makes it more meaningful to hit those goals quarterly and to keep me focused.

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!

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What Frustrates You?

January 20th, 2012 4:31pm
Adam Decker

I just returned from my quarterly coaching course — I’m not coaching, but being coached.  These are very valuable days for me — I learn a lot that I apply to myself, but also to share and help dentists apply to themselves as well as their practice.  Actually sitting down and focusing on your business for one day per quarter can re-energize you and boost your confidence — it’s amazing!

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.

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Reflecting on 2011

January 14th, 2012 11:25am
Amber Banks

Now is a great time to meet with your team and revisit 2011.  You can do this during your team huddle, but it’s good to spend some extra time with your team to discuss how 2011 turned out and discuss your 2012 practice goals.

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!

 

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Tax Changes Abound After 2012

January 5th, 2012 7:43am
Adam Decker

If you think that taxes are already too high and too complicated, take some time to enjoy the tax environment in 2012… because it’s on track to get worse.  Not to mention all of the talk about other changes to help fix the national budget and debt issues.  Here’s a quick overview of scheduled changes that will affect you and your dental practice.

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.

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