These 10 ways to improve cash flow can help you encourage incoming payments, delay outlays of cash and stay on top of everything in between–like payments, late fees, and billing cycles.
- Invoice immediately.Don’t wait untilnext week or next month. If you wait to invoice your patients, they may think they can wait, too.
- Use electronic billing.It’s fast, and younger patients are likely to respond more quickly when they can pay instantly. Your deposits can be deposited directly to your account and everyone saves on the cost of paper and stamps.
- Get it in writing. Set clear payment terms and expectations. Spell out your terms on every invoice.
- Include a specific due date.“Due upon receipt” can be ambiguous, while “payment due within 30 days of the bill date” clearly communicates your expectations.
- Institute late fees.Without them, your patients may put off payment until a time that’s convenient for them but not for you.
- Offer positive incentives for early payment.Give patients a good reason to pay sooner than they normally would. An example might be 1-2 whitening syringes for payments received within two weeks of the bill date.
- Slow down on bills.Hold off on paying bills until they’re due. If you’re presented with a worthwhile incentive for early payment, by all means, take advantage of it. Try to pay electronically, you can schedule in advance and with precision.
- Periodic payments. Take advantage of periodic payment programs that are fee-free. For instance, small businesses withworkers’ compensation coverage can pay their premiums every time their payroll is run. Payments are based on actual payroll, eliminating the need for a large down payment, and carry no installment charges.
- Monitor your cash flow status on a weekly basis.Check off what’s been paid, what’s coming due and what’s late. Send reminder notices as necessary, and don’t forget to tack on your late fee.Continually measure cash flow to your BEP.
10.Get a CPA that is dental specific. A CPA can help guide you toward your financial goals and offer corrective action should you begin to veer off course. Taxes, of course, are part of the equation and ever-changing, making the aid of a professional essential. A dental specific CPA can help ensure you’re taking best advantage of the deductions that can benefit your dental business and help improve your cash flow.
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