Managing the accounts receivable department can often become a thorn in a dentist’s side. Beyond the patient care, it’s the accounting details, process, and management that can have a deep, lasting impact on a practice’s day-to-day operations and overall success. It’s important for dentists to be confident in their business and have a strong understanding of their cash flow and payment processing. A strong system of checks and balances that defines a clear roadmap for all staff can lead to more successful management and accurate accounts receivable activities.
Set Up Electronic Funds Transfer
A surefire process to set up accounts receivable success is to set up electronic funds transfer accounts with the dental insurance carriers your practice does the most business with. Insurance companies will pay the practice directly and create a report of deposits. This report can then be matched and reconciled with the internal accounts receivable report from the front office staff and be reported to the bank. Electronic funds transfer accounts may change the way you have to reconcile banking, but ultimately it helps increase accountability for business reporting and operations.
Check Insurance Before Seeing the Patient
Checking insurance eligibility and details ahead of the patient’s appointment is an integral step to understanding payment types and the practice’s collections. Payments typically fall into two categories (1) over-the-counter, or same day payments and (2) plan-based payments over a period of time. Labeling payment types will allow for a quicker assessment of the practice’s collections and understanding of an up-to-date and accurate accounts receivable status.
Create and Implement a Practice-Wide Financial Policy
Taking time to create and define a concrete financial policy for your practice will instill confidence in each team member across the business and be a strong guide for financial-based conversations with patients. Offering different payment options (ex. in-house payments per visit or financing) will help meet each patient where they are financially. The financial policy outlines clear rules, but it is ultimately up to the dentist to ensure consistency of its use, so the financial health of the practice can be well.
Review Monthly Production, Collections and Outstanding Receivables Reports
To understand the financial health of the practice, create and review reports each month on the practices’ production, collections, and outstanding receivables numbers (which starts with accurately labeling each payment type). These reports will help give answers to important questions including:
- ?How much was collected on the date of service?
- ?How much was collected from Insurance?
- ?How much was paid as a result of a statement being sent out?
Having a clear understanding of each month’s payment flow can help inform better strategies for increased collections.
Outsource Billing
In years past it was common for front office staff to have a longer tenure with a practice. Today, the positions tend to be more entry-level and be inhabited by staff who learn the skills and want something more, causing higher turnover. Front office turnover can cause lapses in billing processes and activity. More practices are turning to billing consultants and experts to handle their accounts receivable and ensure a concrete process no matter the changes that may happen among the practice’s front desk. Outsourcing helps increase accountability, consistency, and give the doctor confidence that their finances are being managed by one source and won’t be influenced or dependent on staff changes.
Managing your practice’s accounts receivable process doesn’t have to cause headaches and uncertainty. Sound processes, documentation, and automation can all contribute to the financial wellness and success of a dental practice.