Dentaltown August 2016 - (Page 52)

practice management feature Continued from p. 48 The first decade of a practice is focused on growth and paying down debt: attracting new patients, establishing long-term relationships and reinvesting profits into your systems, technology and marketing. You may think extending credit through the practice makes sense. For example, if patients want the dentistry but would like to pay over time, you're doing them a favor by extending them credit. Your production goes up and these patients appreciate what you did, become committed and loyal, and refer friends and family. And on the surface, it seems AR is a great way to manage cash flow-you know the money is coming in and can plan your expenses accordingly. Unfortunately, this is simply not the case. Money collected today that you have access to is more valuable than money sitting on the books. Why? Because you have that money now. Sure, there will be patients who pay on time every month, but even then you're losing the opportunity to invest uncollected fees and earn interest, or invest in your practice to fuel growth. Some patients will lose the motivation to pay their bill because the dentistry is done and they already enjoy the benefits of your care. These patients may end up in collections, where you lose even more of your hard-earned production and where your team spends too much time collecting past-due accounts instead of focusing on the most important thing: the patient right in front of them. When you carry AR instead of using an outside company to provide financing, you also have unreliable cash flow. I once heard a doctor describe himself as the "poorest rich dentist" because of his AR. Imagine the time and effort his team must spend on billing and collections, and the unnecessary stress added to their days. By using an outside patient financing program, you still give patients flexibility and longer terms of up to several years to pay, but you minimize the time and effort your team spends on billing and collections-time you can invest into activities that add value to your practice and enhance patient care. Plus, with a third-party financing program, patients may not be as hesitant to return for additional care or hygiene because they won't owe you money. 50 AUGUST 2016 // dentaltown.com The second and third decades of a practice are usually the most rewarding, clinically and relationally. There's a strong base of patients, perhaps spanning generations, who value the doctor and the dentistry. The team has built long-term relationships and enjoys their daily interaction with patients. Even if extending credit to patients is the exception, when patients are established and the team members are comfortable with them this exception can easily become the rule. When this happens, AR can unintentionally become out of control, increasing overhead costs and stifling cash flow. Yes, we want to help people and provide the care-but in a way that's financially responsible for the practice and patients. With a patient financing program, patients may be able to take advantage of a promotion that allows them to avoid interest charges http://www.dentaltown.com

Table of Contents for the Digital Edition of Dentaltown August 2016

On Dentaltown.com
Howard Speaks: You Don't Know COGS
Professional Courtesy: The Promise of Technology
Continuing Education Update
Industry News
Dealing with Parents Who Refuse GA Whose Children Obviously Need It
Class II Composite Technique
Best Alginate, Hands Down!
The Pillars of Attraction
Out-of-Pocket Collections: Mending the Holes
Dentists Playing Bankers: A new perspective on accounts receivable
Character Studies: Your financial tendencies likely depend on which of these nine archetypes fits you best
Quality Control: Five reasons you should purchase quality hygiene instruments
Practice Solutions: 3M
Opting Into—Or Out of—Typical Transitions
Treatment of Intraoral Infections
Service Profile: Gilleard Dental Marketing
Product Profile: Ivoclar Vivadent
Immediate Implants: Tips for improving the outcome in the aesthetic zone
New Products
You Should Know: Call Sumo
10 Strategic Insights for Patient-Producing Postcards
Monthly Poll: Pediatric Dentistry
CE: Oral Diseases Associated with Men
Dentally Incorrect

Dentaltown August 2016