Don't let fees fly out the door

You've seen the sign: "Payment due at the time services are rendered." You may even have one posted on your front desk. But how often do clients act surprised at the bill? Do they hem and haw when you ask them to pay?

Lorraine Monheiser List, CPA

"Hey, not my problem," you may be thinking. "Practice finances are strictly the owner's or manager's responsibility—I don't control that."

If you've ever had this reaction, it's time to think again. Your paycheck depends on the practice's bank balance. And you exert enormous influence over clients' attitudes about payment, because you often present the bill.

It doesn't matter how many appointments your front desk schedules or how many patients your doctors see if your hospital doesn't get paid for the work. You can't collect a paycheck and your practice can't purchase supplies using a client's promise to pay. It takes real money. So it's your responsibility to offer high-quality care, teach clients the value of your services, explain your practice's payment policies, and help make sure clients pay up. Here's how.

1. Examine your feelings about fees.

What's your attitude about what your practice charges? Do you cringe when you feel a fee conversation coming on? Even if you don't say a word, your body language might send the message that you're uncomfortable with the fees. Your practice owners may not share information about the practice's finances, but I can assure you you're probably not overcharging. Figure 1 shows an estimate of the costs your practice has to cover with every dollar clients pay.

Figure 1

Essentially, your practice spends about 92 cents of every dollar on these items alone—and this isn't even a complete list of a hospital's normal costs. These figures also don't account for purchases such as X-ray processors, lab equipment, wet tables, or ultrasound. What could you reasonably remove from this list of expenses? When you look at these costs, your fees probably make more sense.

The lesson here: Present the bill with confidence, so clients receive a clear message that the fees your practice charges are reasonable.

2. Know your payment policy.

Do you have a written policy, and do your clients know what it is? Simply printing it on the invoice isn't enough. Make sure all clients understand your payment policy before you perform any services. In fact, it's a good idea to explain the practice's policy when clients schedule an appointment to avoid misunderstandings later.

3. Represent your policy fairly.

The payment policy isn't designed to discourage clients from making an appointment or from bringing in their pet. In fact, the opposite is true. Your practice is working to offer clients the maximum number of ways that they can pay: cash, check, money order, credit cards, third-party payment plans, and, if all else fails, postdated checks. Again, the goal isn't to discourage clients; it's to find a way for them to pay. Does your hospital's policy suggest alternatives, and do you work with clients to find a way to make it work?

4. Offer estimates.

Do clients receive estimates for surgeries, dental cleanings, and nonroutine services? Nobody likes surprises, and if you don't give clients some idea of the charges, you're withholding information they need to budget appropriately.

Of course, these fee estimates need to be realistic. And remember, clients tend to hear and remember only the low end of a range of fees you quote. If unexpected complications occur, tell clients as soon as you can before you discharge the pet so they won't be shocked by a bill that's higher than the estimate you offered.

5. Don't discount fees or "forget" to enter charges.

Most practices offer employee discounts, and some hospitals work with shelters or welfare groups and offer discounts to those groups. But it's not your job to X-ray clients' wallets and decide whether they can afford to pay. Some clients have learned (or been taught!) that by pleading senior citizen status or some level of poverty, they can get a discount.

Veterinary hospitals can always give their services away, but soon they find they can't cover their normal operating expenses, replace broken equipment, or give raises to deserving team members. And all of these issues affect the practice's ability to provide high-quality medicine.

Clients know you provide an important service. After all, they schedule appointments at your practice every day. Help them understand that your practice, like any other business, deserves to be paid when you provide services.

6. Set the stage.

If you're involved in scheduling and admitting patients at the front desk, you'll set the stage for clients to pay their bills when they call to schedule the appointment. Check to see whether clients have an outstanding balance while they're on the phone. Then remind them of the amount they owe and ask whether they plan to pay their balance when they visit. Similarly, at check-in you should ask how they plan to pay for today's services. If they can't pay, you'll find out sooner and you can discuss options with the practice manager or owner before you offer the services.

7. Man the front desk.

If your job includes giving clients discharge instructions or checking them out, you may be the last person to see pet owners before they walk out the door. Don't let them leave without paying, no matter how chaotic it is at the front desk or whether that's normally your job. And don't leave the front desk unattended if a client will be checking out soon.

News flash: Running a practice is expensive

8. Call clients with outstanding balances to arrange a payment plan.

OK, so someone managed to sneak past you without paying. If you believe they owe the hospital money, what's wrong with asking for it? Keep notes about what the client says and follow up if the client doesn't follow through. Remember, the longer you wait, the less likely the client is to pay.

Client services generate positive cash flow only if the fees cover the actual costs and only if clients pay when you offer the services, not 30, 60, or 90 days later (or, even worse, not at all). And getting paid promptly for the services you offer isn't too much to ask, really. Think of it this way: No restaurant would let you pay next month for the meal you enjoyed today. When clients choose your hospital to provide high-quality care for their pets and pay their bills at checkout, the practice can afford to offer fair compensation, benefits, and up-to-date equipment. And you can offer better service that meets clients' high expectations. Everyone wins.

Lorraine Monheiser List, CPA, a certified valuation analyst, owns Summit Veterinary Advisors LLC in Littleton, Colo., a firm that seeks to make veterinarians more successful, both personally and professionally. Please send your questions or comments to firstline@advanstar.com