Aging AR: How to Recover and Bring in More For Your Practice
Every dental practice understands the importance of a healthy cash flow. But let's face it: Chasing down unpaid bills is no one's favorite thing to do and can be uncomfortable. Aging accounts receivable and unpaid patient balances can quickly become a financial monster, hindering your ability to invest in equipment, grow your staff, or even keep the lights on.
So, how do you tackle this challenge without turning patients into adversaries? The key lies in a proactive approach that combines effective communication, streamlined processes, and strategic collection methods.
The Peril of Aging Accounts Receivable
Before diving into solutions, let's understand why aging accounts receivable are a threat. Here's the reality:
- Time is Money: Over time, unpaid balances become increasingly challenging to collect. Studies show the value of an account receivable drops significantly after 90 days.
- Cash Flow Crunch: Uncollected payments disrupt your cash flow, jeopardizing your ability to invest in the latest equipment, cover essential expenses, and even meet payroll.
- Strained Relationships: While chasing payments can feel uncomfortable, the alternative – absorbing the cost – hurts your practice and hurts you because if they are not paying, you are essentially working for free!
Strategies to Recover Outstanding Balances
Now that we've established the urgency, let's explore some efficient strategies to recover money from aging accounts receivable:
Prioritize Prevention
The best defense is a good offense. Here's how to prevent accounts from aging in the first place:
- Clear Communication: Explain financial policies upfront. Discuss estimated costs, insurance coverage, and patient responsibility before treatment begins. Obtain patient consent for the financial responsibility and treatment plan.
- Upfront Collections: Collect co-pays and deductibles prior to treatment or at the time of service. Offer flexible payment plans for more extensive procedures. Consider offering consultations to discuss treatment options and costs before scheduling procedures.
- Accurate Billing: Ensure your billing system is precise and efficient. Double-check for errors before sending invoices.
- Early and Consistent Follow-up: Don't wait for accounts to become delinquent. Establish a follow-up protocol:
- Gentle Reminders: Make friendly phone calls and send emails or texts shortly after a payment is due.
- Escalated Communication: For persistent delinquencies, send stronger reminders highlighting late fees and potential consequences.
- Embrace Technology: Invest in software that automates billing and generates reports on outstanding balances.
- Offer Flexible Payment Options: Make it easier for patients to pay by offering multiple options: credit cards, debit cards, financing plans, or installment payments.
- Consider a Collection Agency: For unpaid accounts after internal efforts, consider hiring a reputable collection agency specializing in healthcare receivables. However, this should be a last resort, as it can damage patient relationships.
The Power of Patient Communication
Remember, your patients are the heart of your practice. Here's how to ensure your communication is clear, professional, and patient-centric:
- Focus on Solutions: Avoid accusatory language. Look for alternatives that work for you and your patients.
- Emphasize the Value of Care: Remind patients of the importance of their dental health and the benefits of the treatment they received.
- Offer Payment Plans: Work with patients to create a manageable payment plan that fits their budget.
- Train Your Staff: Equip your team with the communication skills and empathy needed to handle delicate collection conversations.
A Multi-Faceted Approach
Combating aging accounts receivable requires a multi-faceted approach. You can significantly reduce outstanding balances by prioritizing prevention, implementing early follow-up protocols, and offering flexible payment options. Clear communication with your patients throughout the process is vital to maintaining positive relationships.
How can software solve the problem? Let us show you how FlexPay can.
Software can automate your collections and statement reminder processes to minimize interactions between your team and your patients and help limit tension. Our platform, FlexPay, works in conjunction with several other Flex features to make payments easy by offering different avenues for your patients to pay their bill, whether they are standing in your practice or miles away. Flex makes it easy for you to collect payments upfront via treatment plans, helps you follow up with reminders via statement resend, facilitates accurate billing via allocated payments, and more.
You can have a patient pay directly via a terminal in the office or from a patient-specific statement that you can securely text or email. Our goal with FlexPay is to streamline the collection process for both your practice and your patient so that money comes in faster and your patients have convenient options that make their lives easier.
- Automated Bulk Statements
- Consolidated Family Statements
- Text and/or Email Statement Delivery
- Automatically Resend Unpaid Statements
- Collect Payments via Statements, In Office Terminals, Treatment Plays or Recurring Payments
- Payments Posted Automatically to Patient Ledger, Allocated to Procedure
FlexPay is more than just a payment tool - it's a game-changer for your revenue cycle management. Boost efficiency and improve patient satisfaction!
How to make FlexPay work
To use FlexPay, you must have a compatible credit card terminal and a merchant payment processing account. Flex has integrations with two payment processing providers: CardConnect and Moolah. Both companies offer payment processing services and the latest credit card terminal devices. They also offer very competitive transaction rates.
Not a Current Flex User?
If you're not a Flexer, we do way more than just online payments and would love to connect with your team. FlexPay is just the tip of the iceberg regarding the superpowers Flex can add to Open Dental.
We offer demos on your schedule and take a no-pressure approach to Flex - we explain what Flex does, what services you get with our Flex package options, and our monthly subscription rates. From there, it's up to you to decide if Flex is a fit for your practice. Click the button below to connect with our team!