You need to establish good habits to ensure the overall health of your practice. As a dentist, caring for your patients is your top priority, however you may sometimes face some difficult decisions that could impact your cash flow. What do you do when your patients need immediate care, but their insurance doesn’t cover the full cost of their dental work? How can you make sure you don’t fall behind on payments to external suppliers if your patients can’t afford to settle their accounts in a timely manner?
Having a healthy cash flow is critical to the health of your practice. It ensures you can pay your hygienists, office staff and suppliers on time, as well as cover other costs that may arise, such as marketing, overhead expenses, repairs, etc.
Here are five ways to help improve your practice cash flow
Pre-book preventative care and follow-up appointments
One of the best ways to help ensure you have a consistent cash flow is to maintain a steady schedule of patient visits. “This is where having a good, dependable office manager can make a noticeable difference,” says Bart Bagrowicz, Director & Group Lead, Healthcare & Professional Banking, Western Canada at Scotiabank. They can pre-book preventative and follow-up appointments when patients come in for their routine check-ups. Plus, they can schedule reminders for upcoming appointments. Not only is this important for identifying patients’ oral health issues early, but it also is an opportunity to ensure no revenue opportunities are missed.
“Maintaining a well-organized patient calendar may seem like a simple thing, but it can have a significant impact on your bottom line,” says Bagrowicz.
Make the payment process easy for your patients
Be sure to provide your patients with a variety of different payment options, such as debit and credit cards. That can help avoid the possibility of not getting paid right away or having to follow up with patients who do not have cash or cheques on hand when they come in for treatment. You can learn more about setting up debit and credit card processing through Scotiabank’s partner, Chase Merchant Services. To collect any outstanding billings, invoices or deficits after submitting to the insurer, use cash management options or digital payment solutions versus accepting cheques in the mail.
For patients with an employer health plan or private insurance, make the transaction as seamless as possible by checking into whether their insurance provider offers a direct payment plan rather than requiring them to pay up-front and then file a claim. Also, help your patients understand what their insurance plans cover and explain the cost of any complex procedures in advance to avoid any surprises or unpaid balances. For larger procedures, submit estimates to the insurer in advance. These strategies create a positive experience for your patient and ensures your payments are collected promptly.
Use technology to your advantage
One of the best ways to manage your cash flow is with customer relationship management (CRM) technology. It can help you track and analyze client data, plan for the future and predict any potential shortfalls. A CRM system can also facilitate automated digital appointment and payment reminders, as well as share e-newsletters, which can help build and maintain strong patient relationships while educating them about best practices for good oral health and more.
It's also a good idea to allow your patients to book appointments through your website, if you have that capability. Not only will it save time for your administrative staff, but it may even help draw in more business by facilitating booking of appointments outside of your regular clinic hours.
Consolidate payments on a business credit card
By amalgamating all your payments on one business credit card, you can keep your business expenses separate from your personal expenses and make them easy to record and track when you file your taxes. This can also help maximize your cash flow by providing you with a limited grace period between the time you make a purchase and the time you make the payment. Remember to pay the outstanding balance by the due date to avoid incurring any interest charges.
You may also be able to take advantage of a credit card that offers rewards or cash back. Compare card features to choose the one that best meets your needs. You can learn more about the business credit cards offered through the Scotiabank Dentist Banking Program.
Maximize the return on your cash
Always monitor your bank accounts so that extra cash is not sitting idle in a no-interest account. Instead, Bagrowicz recommends you use that surplus to pay down any outstanding debt or take advantage of a business account that pays interest based on the balance.
Depending on when you anticipate you may need the funds, you can also opt to invest in a Guaranteed Investment Certificate (GIC). For example, a cashable GIC pays more interest than a standard business account while still providing you with access to your funds. For more information on GIC and other investment options, speak to your advisor or Healthcare Specialist.
For more information and customized advice and solutions to help you grow your practice and optimize your cash flow, contact us today.