As a small-business owner, you really have to understand what influences revenue losses and gains. While this can seem overwhelming and is something many dentists struggle with, it doesn't have to be a source of stress and frustration. Here are five tips to help get you started.
1. Perform a 10-point financial assessment
The first thing you need to do is determine exactly where your practice is today. I suggest asking yourself these 10 questions to get a better handle on your practice's financials:
Sally McKenzie, CEO of McKenzie Management.
- Are you making as much money as you believe you should/could be?
- Are you saving enough money for retirement?
- Are you waiting to start saving for retirement until practice income increases?
- Do you ever skip making payments to your retirement fund?
- Do you have enough revenue to cover CE for yourself and your team?
- Are you hesitant to make investments in equipment because you're worried about the cost?
- Are you waiting to improve the appearance of your practice because you're worried about spending the money?
- Do you effectively market your practice?
- Can you afford to give raises?
- Do you feel like there's no way you could possibly work any harder?
Once you sit down and answer these questions, you'll have a much better idea of your practice's financial health. If you find money worries are keeping you from achieving personal and professional goals, it might be time to think about making some changes.
2. Make sure patients understand the value of dentistry
“Thinking about the financial side of your practice isn't easy ... but it's essential if you want to create a thriving practice.”
Collecting money from patients after their appointment and then just sending them on their way is easy. But it's much more effective if your team members educate them about the value of the services you just provided. Train team members to tell patients exactly what the doctor did so they know it was more than just a simple filling. This helps them understand the cost of the service and makes them more likely to accept treatment in the future.
Knowing what to say when collecting payment also is important. Don't just say the cost is $350 today. Be direct, clear, and precise. Here's an example:
"The charge for today's treatment is $350. Would you like to pay with cash, check, or charge? As a special service to our patients, we're happy to submit your insurance claim. The payment will come directly to you."
3. Develop a financial policy
This is the best way to ensure you get paid on time. The policy should make payment procedures clear so there's no doubt when payment is expected.
When creating your policy, make sure it isn't too strict. If you decide you're not going to accept insurance or only offer a few payment options, for example, it's going to be difficult for patients to accept treatment. They simply won't be able to afford it, and that will do nothing but hurt practice productivity and your bottom line. Consider offering third-party payment options to make it easier for patients to pay for treatment.
Another tip? As part of your policy, ask patients with insurance to pay all of their portion when services are rendered, unless the amount is more than $200.
4. Communicate your policy
Creating a financial policy will do you no good if patients don't know about it. I recommend you hand it out to all new patients as part of their new patient packet. Put it on your website, and remind current patients of the policy before they begin treatment. That way there are no surprises when it's time to collect payment.
5. Offer incentives
Patients will be more likely to pay upfront if they get some kind of deal. Consider offering a 5% adjustment in fees for patients who pay for expensive procedures in full.
I know thinking about the financial side of your practice isn't easy, and it isn't why you got into dentistry. But it's essential if you want to create a thriving practice. If you need more guidance, feel free to contact me. I'm happy to help.
Sally McKenzie is CEO of McKenzie Management, which offers educational and management products available at www.mckenziemgmt.com. Contact her directly at 877-777-6151 or at firstname.lastname@example.org.
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