Protecting Your Practice

There is so much discussion and confusion about the best way to collect bills from clients. Vets can be their own worst enemies. Historically, we hate to charge a fee for what we do and when we do charge a fair rate we give it on credit. We are probably the business with the easiest credit policies.  For many of us we had clients that generally paid in a somewhat timely manner but now we are being faced with bankruptcies and slow to pay clients.
In a recent discussion at the AAEP annual convention we discussed the best ways to collect outstanding accounts. That is the backward view of AR. Better to prevent account balances from accumulating in the first place than chase after people later. We decided on a game plan going forward that all equine practices can use.

Step 1

Make a payment plan going forward that all doctors and staff are on board with. Their compliance is critical so exceptions are not made. Make your plan easy – Payment due at the time of service. Identify those excellent clients who have always paid in a timely manner and let them know that you have new credit terms but you are continuing with them in their typical manner. If they get past 30 days you will have to apply the new terms to their account.
You will be surprised at how few clients you will lose. Those that go are the ones that take up so much of your office’s time chasing after them. They are not worth it.

Step 2

Communicate in writing with your clients what the new policies are. Don’t surprise them. Many people will expect this considering the economic climate. January 1st in the perfect time to do so.

Step 3

Follow up and re-assess your new system in a systematic manner. Ensure all doctors and staff follow the new system. Every month or 2 review how you are doing. Have you lost clients? Are your current accounts lower than in previous months? Is your cash flow better? This will be the immediate effect of the new system.

These are some of the highlights from the AR discussion. Please post any other suggestions or systems.
For those overdue accounts you have now here are some excellent resources. Thank you to Wilson for these references.

  • Excellent tool to search for clients
  • Collection tools 

Join the conversation!

  1. I would add a couple more thoughts to Mike's post. First make sure you have a strong assertive person to manage your AR. This person will earn their salary by reducing your AR. The second is to make sure you train, mentor each other, and revisit the policies on a regular basis to ensure better compliance by the staff (doctors included).

    Improving your cash flow should reduce some sleepless nights for you. If you can seek more payments at the time of service this will put you in a positive cash position. If that does not happen then receiving payment within 30 days is acceptable. Money that is outstanding for longer periods of time will be worth less due to time value of money, labor costs for sending statements, etc.

  2. Thanks Jim for the additional excellent suggestions. I agree 100%.

  3. Hopefully they know what is better to do. People ar eoften too in rush when deciding things.

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