Statements with ease

Use a software program to avoid the costs and headaches associated with sending statements.

By Susan Kulakowski 

As a former business staff member, I can remember dreading the first of the month—especially when it happened to fall on an already hectic Monday.  Amid the daily demands of presenting and collecting fees, estimating employee benefits, collecting accurate co-pays and having financial treatment plan discussions, came the added pressure to prepare, print and mail monthly statements.
It generally took several days to generate, print, review and carefully sift through the statements. To keep our patients happy, we had to make sure those statements were accurate and that we didn’t send bills to patients with treatment in progress.
But the process didn’t end there. Next came a day filled with stuffing, stamping, bundling, banding and finally depositing the massive bulk of outgoing statements in the mail “outbox.” It felt like a major accomplishment and a definite respite by the time the statements actually went out, which usually happened around the fifth of the month.
How often and how many statements does your practice send today?  Years ago, it was not unusual to send more than 100, even as many as 200, statements in some practices.  It was also not unheard of to have an accounts receivable exceeding two, three, even four times the average monthly production.  
In today’s healthy and profitable dental practice, accounts receivable should:
•    Not exceed half to three quarters of the practice’s average monthly production.
•    Keep account balance payments up-to-date as much as possible. Account balances 90 days and older should not exceed 4 percent
•    Send out no more than 50 to 80 statements per month, per doctor.  
•    Try out a third party service. If you already use the highly recommended third party financing programs, such as CareCredit, there should be 50 statements or less.  
Dentists have become much smarter business people, expecting payment at the time of service, implementing and enforcing the practice financial guidelines, and obtaining secure financial arrangements. They’ve also realized the importance of training, with many providing it for their team and the practice financial coordinator responsible for accounts receivable. Proper training gives these team members the verbal skills, fee rebuttals and tools necessary to confidently collect the money that’s due.  
While dentists have become more business savvy, software programs have become more sophisticated. These days, most software programs give practices the ability to print only verified accounts—excluding those not selected and eliminating the costly, time-consuming sifting process.
Many software programs are conducive to the system I consider optimum—generating statements to patients in a quarter of the alphabet on a weekly basis. Not only does this distribute the required statement time expenditure more evenly, it also allows for an even monthly cash flow.
Depending on the type of practice you’re in, this is what I recommend:
•    For solo practices billing monthly, generate statements on the 15th of the month with the due date on the fifth of the following month. That way, your statement is included in the bills that your patients pay with their first-of-the-month income.    
•    A two-doctor practice should mail the A to M patient statements the 10th of the month, followed by the N to Z patients the 20th of the month for an even cash flow.  
Regardless of what type of practice you have, daily statements should be sent for those accounts that have remaining balances after posted insurance payments.
Many software systems also offer electronic billing services, which may be more cost effective for your practice. The time traditionally used to sort through and prepare the statements will be better spent elsewhere in the practice, and you’ll no longer have to pay for paper, envelopes, printing, postage and mailing.  
So forget about the sifting process and the extra costs associated with mailing statements each month. Thanks to the advancement of management software capabilities and programs, statement headaches have been dramatically reduced.

Susan Kulakowski is a management consultant and owner of Developmental Dental Strategies, a south Florida management firm representing Linda Miles and Associates. She has more than 27 years of experience in many areas of dentistry. Susan is a member of the Academy of Dental Management Consultants and the Institute of Management Consultants. Contact her at 866-862-7878 or sueziqk@msn.com. Visit her online at www.ddsmanagement.com and www.dentalmanagementu.com.