Managing Debt

With multiple delivery options for appointments and services now available, this means collecting payment immediately for appointments and services is harder.

Utilising messaging systems including bulletins in your website, signage in waiting rooms and client newsletters can enable users of your services to be well informed of their options when making payment. It is important to always be clear about what the cost will be and what the options are, be up front – if there are extra charges for extra services you need to provide, then let them know.

Below are some internal credit control processes that can be used to assist in managing debt effectively.

• Issuing invoices listing the services provided and the fee charged immediately after the consultation.
• Offering a discount for immediate payment (i.e., consultation fee of $50 if paid now or $55 if paid later).
• Overdue accounts to be cleared before further appointments (this is dependent upon the health status/need).
• Texting, messaging through your client portal, emailing or mailing the invoice the same day if not paid immediately. Don’t leave it until the end of the month.
• Promote a variety of payment methods or instalment plans.
• Providing on-line payment options – including your bank account details on invoices.
• Communicate your credit terms with notices in prominent places in the practice and detail any standard terms for payment on invoices. For example, “Payment is required within seven days of consultation”.
• Weekly review overdue debts. If not paid seven days after the consultation, make a quick phone call, text, or message through your portal to the person.
• If payment not received 15 days after the consultation, repeat the above with a statement sent highlighting the overdue amount and your payment terms.
• Report on aged debtors at the end of each month as part of your management report procedures.

Although we advise that one person in the practice should manage the overall responsibility for following up debt, it is important to upskill staff on how to ask for payment without creating offence, – your front desk staff manage the receipt of money, ensure they are aware of how important it is for people to pay and to follow up when they next present, if they have outstanding debt.

Furthermore, documenting your credit control procedures for staff will allow them to understand your processes. Be sure all staff are well trained and competent in using your PMS/accounting/invoicing software.

Below we have an example of a standard process for recovering debt in a practice:

1. Date client seen - Invoice given with terms of credit printed on the invoice.
2. End of the month - Statement sent.
3. 14 days from the end of the month - Phone call to client to request payment.
4. 30 days overdue - Letter to client advising of debt collection process offering them the opportunity to make the full payment within 7 days.
5. 7 days after letter - Put in the hands of a debt collector.

Finally use the below checklist to see how well your practice is currently managing client debt.

Your aim is to answer “yes” to all the questions below. For any questions that you answer no, consider using the strategies above.

Managing debt checklist

Do you have a credit policy in place for following up on patient debt?

Do you provide an opportunity for clients to make payment immediately after their consultation?

Do you provide a discount to clients who pay before they leave the practice?

Do you issue an invoice to all clients using the PMS before they leave the practice?

Does the invoice include your bank account details for electronic payments?

Do you keep an accurate record of those clients who have not yet paid?

Do you chase up all clients who have not paid with a phone call on a weekly basis?

Do you send reminders to clients who have not paid after 15 days requesting payment?