It’s a fact. Every business has customers with unpaid accounts. It’s frustrating and uncomfortable to have to ask people to pay you what is owed. Even if you haven't had large amounts of bad debt during your time in private practice, unpaid invoices can easily go unnoticed or written off. However, they do add up and have a negative impact on your cash flow.

A healthy cash flow is vital for the daily operation of your practice. Expenses like salaries, operating costs, buying of stock and paying provisional taxes are part of the daily operations for any business. If your cash flow is limited and does not cover these expenses, you could end up having to close your practice. No business can run at a loss or with an unhealthy cash flow for long.

We have pondered this a lot over the years and have come up with a few strategies to help you collect on unpaid invoices and maintain a healthy cash flow.

To get an idea of your practice’s current success level with patient collections, try our quiz here. 

Invest in Practice Management Software

Practice management software is designed to assist you and your staff in managing all the administrative functions of your business. With a good practice management software your staff should easily be able to track, monitor and follow up on overdue accounts.

We’ve seen many small businesses that use either Excel or Word as their accounting program. Struggle on a month to month basis to keep track of the accounts that are overdue. Some businesses have fantastic invoicing software which ensures that they know when their invoices have gone out. However every month they have to draw a report on their accounts aging or overdue accounts.

Using Excel, Word or reports pulled from software is not the worst way to collect or follow up on overdue accounts but it is very time-consuming. If you are a small business, a one-man show or a business that doesn’t have a large administration team. You need to find ways of managing overdue accounts that are not time-consuming. And ensures that your team is able to follow up effectively and quickly on all accounts that are overdue.

With software, you are able to assign payment terms and assign messages that need to go out. As well as set rules as to what messages go to clients based on times and payment terms that you set. This saves your staff time and in the long run, saves you money. As you are able to chase up on an overdue account far sooner than if you took your once a month three day scour through excel spreadsheets process out of the equation.

To see if practice management software makes sense for your practice click here.

Empower Your Front-desk Staff

If your practice is large enough front-desk staff are critical to the success of your patient payment collections process. They deal directly with your patients everyday, and have insights that could enhance the success of your practice. Here are a few tips on how to empower your staff.

• Make them aware of changes in policies as soon as possible.
• Get their input on your payment policy. Set up an in-house brainstorming session to review your payment policy and see if anything should be added or updated with your current policy.
• Listen to their experience of collecting from patients. Talking to patients about outstanding payments can be challenging and uncomfortable. Your staff have to be comfortable with discussing all parts of your collections process. This means that they have to understand the payment policies. Ideally your staff need to be professional and effective across a variety of scenarios when it comes to collecting overdue payments.
• Get their take on the practice technology. Having practice management software is only half the equation. To truly reap the benefits of this technology for your practice management, you need to talk to your staff about how user-friendly it is. Do they know how to use all the features? Is it enhancing your collection process by enabling them to check patient benefits, send real-time claims and invoice patients at the end of the consultation? Can they identify any gaps in the functionality or usability that you need to know? 

Determine Your Payment Policy

Now is a good time to review your payment policy if you have not done so in the last two years. Update your payment policy with any changes that you want and make sure that you share those changes with your staff and your clients. You want to keep the following in mind when you are updating your payment policy.

• Your payment policy is the basis of your patient collections journey. It should clearly outline the responsibilities of the patient & the practice. Importantly, once those responsibilities have been communicated – they must be enforced, or the policy is meaningless.
• Update the policy with the payment methods you accept. Remember to include cashless or contactless payment options you may have implemented.
  Include payment terms & processes for collecting payments & reimbursement from medical aids.
• Make a point of using conversational, easy-to-understand language to explain patient responsibility. Your policy shouldn’t read like a legal document, it should be accessible for all patients to understand & comply with.

Know When to Stop Chasing Patients

There will always be the delinquent unrelenting non-paying patient despite your best efforts to recover the funds. In the end you have to consider that every phone call, email and SMS to try to bring in the payment costs your practice money. If the cost of collecting on an invoice is more than the value of the invoice don’t keep chasing the non-payer.

Set very clear rules on how many reminders a patient will receive and at what point your collection process ends. However, if your cash flow is at risk due to large numbers of patients not paying it may be beneficial to look to a debt collection firm to take over the collections.

If you would like to book an appointment with our team to chat about your private practice and see how we could assist please click here to book an appointment