Be a better biller
Kyle Palmer, CVT
Long-time dvm360 magazine and Firstline contributor Kyle Palmer, CVT, is hospital manager for VCA Salem in Salem, Oregon, as well as a practice management consultant for a number of other hospitals.
Step No. 1 for equine veterinarians? Dont bill in the first place. (But if you do, Ive got advice for that too.)
For most equine practitioners, the further they get from providing direct care to patients, the less excited they get about their day. While that sentiment is understandable, there are a few nonmedical things that need to be a priority, and collecting payment for services rendered is at the top of that list. In a perfect world, it'd be as easy as handing the client a bill, receiving payment and zipping off to the next appointment. You and I know it's not often that easy.
Choose a good policy-and stick with it
Before we get into the ways that clients try to dodge payment and how to avoid them, let's start with the obvious. A client can't hand you a check, cash or credit card if they're not present during the appointment, and with large boarding barns, training and breeding operations, the client may be in another town, another state or another country.
When scheduling the appointment, always ask if the owner will be present, and if not, who will be on hand to represent them. Find out who will be responsible for paying for the services and get a contact number if the owner is absent.
Practice hack: Don't get payments twisted
Yes, you can call or email a horse owner off-site with the amount once you've charged it for services rendered, but don't agree to provide the amount and wait for approval to run the card-you might not hear back in a timely manner and you'll be on the hook waiting for payment.
If you're dealing with an absentee owner situation, make sure before you visit to render services that you've contacted them and required a credit card in advance. And don't get your payment backwards: Yes, you can let them know the amount once it's been charged, but don't agree to provide the amount and wait for approval to run the card-you might not hear back in a timely manner and you'll be on the hook waiting for payment.
It goes without saying that avoiding a “billing” policy in the first place is a terrific goal, but that may not be possible depending on your practice, so fighting each day to avoid billing on a case-by-case basis is vital. Mike Stewart, DVM at Silver Creek Equine in Silverton, Oregon, refers to it as being “coin operated,” and that's a good philosophy to strive for.
Allowing clients to bill for services means that most of them will put you in the category of a “pay when we can” expense, meaning that they pay their mortgage, their auto loan, their credit card statement and probably almost everything else before they get around to paying you. Thirty days becomes 60 days, and eventually 90 days for some clients, and all of the sudden you're carrying a lot of debt on the books.
Generally, some practices have a policy of asking each client if they'll be paying with cash, check, credit or debit card when they schedule an appointment (or for a brick-and-mortar location, when they're checked in upon arrival). While some staff may find this question uncomfortable, it shows that you expect to be paid at the time of service and it doesn't run the risk of just singling out clients who've given you trouble in the past. Asking this question of everyone also gives you a bit of leverage at the end of the appointment as clients can't say they weren't prepared to pay on-site. As is the case with most things, communication is crucial.
Better communication is cash in the bank
Here's the groundwork for payment with every appointment: Always provide an estimate, always answer questions about fees when scheduling the appointment, and always provide an itemized invoice at the end of appointments. Clients who expect and understand the fees plays a role in collecting payment. Assistants are great for this. The tail end of many equine appointments is a conversation about your findings and next steps, but before that conversation starts, let the client know you're getting the charges ready (or your assistant is).
Practice hack: Wait for payment … right now
Mobile veterinarians who try to fit in too many appointments throughout the day can be guilty of feeling that it's easier to just send a bill and get on the road to the next stop than wait for the client to go get a checkbook or wallet. No revenue is more predictable than that which you've already generated, and the longer you allow a client to wait to pay, the less likely it is that you'll get paid.
Mobile veterinarians who try to fit in too many appointments throughout the day can be guilty of feeling that it's easier to just send a bill and get on the road to the next stop than wait for the client to go get a checkbook or wallet. Skipping payment during visits may seem better, but that's just appearances. No revenue is more predictable than that which you've already generated, and the longer you allow a client to wait to pay, the less likely it is that you'll get paid.
Explaining fees and answering questions about fees also allows for clients to send a spouse, child or any other party into the house or car to grab that checkbook/wallet while they engage in the post-exam discussion, which will get you back on the road sooner.
Pick your (payment) poison
Be ready at every appointment every time to take payment. With mobile merchant processing technology around today, there's no excuse for a practitioner not being able to swipe and take a card in the field (other than a lack of cellular service). Swipe and chip readers also prevent the hand recording, or imprinting, of a carboned credit card slip. Leaving the visit with a fully recorded credit or debit card number on file, along with an expiration date and security code, is a major liability for you as a business owner. Frankly, given the present threat of identity theft and hacking, I'm surprised clients are willing to provide you their information in that format. Moving away from merchant processing, some clients still want to pay with cash, and accordingly, you need to keep a small till available to make change.
Practice hack: Don't let pay get in the way
To facilitate payment, know the pros and cons of cash, personal check, credit card and debit card, and make sure you're letting clients pay in the way they want.
Offering clients the choice between cash, check or credit/debit card is important, but don't lose sight of the potential impact of each form of payment. Credit and debit card processing isn't free-you can assume you'll lose roughly 2 percent of revenue collected in that fashion via processing fees and the occasional chargeback. The risks of accepting checks are well known, and you'll have to budget some amount of expected loss due to non-sufficient funds (NSF) or closed accounts. You'll often recover most or all of these fees, but not without some time and trouble on your part. Finally, given the cost of merchant processing and the risk of accepting checks, it would seem that a perfect world would include a cash-only clientele. However, most banks have a cap on the amount of cash that can be deposited in a given month. Regardless of your policies, the cost of doing business has to include some of these items or you're in for a big surprise down the line.
Getting paid after the fact
Even if you do everything above perfectly, you're likely to wind up with some accounts that are past due. Be aggressive, because they become exponentially harder to collect as time goes on.
First, create a payment policy if you don't have one, and post it where everyone can see it (your reception area, your truck, your website): “We expect payment at the time of services.” Second, create an internal credit policy that establishes a schedule and strategy for responding to clients who owe you money. That second policy should remain internal, because clients who see it will think charging is acceptable.
Include details on your internal credit policy with any billing statement at the beginning of the month that's 30 days past the first statement on a specific bill. The letter should outline your “payment at the time of service” policy as well as the steps that will be taken to collect the debt, requesting that they contact you right away to resolve it.
Add a $10 late fee with the next statement at least 30 days after the first statement.
Keep it simple and friendly-these are still your clients after all, and at this stage, it may have just been an oversight. That said, I would add a $10.00 late fee at that time. If the bill hasn't been paid at the next 30-day billing interval (and the client hasn't phoned you as directed to resolve the matter), send another slightly different letter requesting that full payment be made immediately. This letter should be sharper in tone and once again should outline the steps that will taken to collect the debt. This might include suspension of services, termination as a client or advancement to your next-level collections department (which may be outsourced). The second letter should come with an additional late fee of $10 attached.
If a client still hasn't paid or phoned to make arrangements by the next 30-day interval (now a 90-day delinquent debt), it's time to move to the next step, which should be a 14-day collections notice, an additional higher fee-try $50-and transfer to an aggressive stage of “in-house” collection that includes weekly calling. At this point, all services should be suspended and the client should be referred to an outside collection agency.
Collection agencies will be the first to tell you that the late fees and fee for transfer to in-house collections may not be something they can make stick. That's perfectly fine-up until that point, use the late fees and other fees as leverage to incentivize the client to call and pay. Once you advance to the collections stage, make sure whoever is communicating with the client is aware of the debt-collecting guidelines that are applicable.
Collecting money is not a fun job, which makes avoiding owed debt in the first place so vital. When it does happen though, assign it to a great staff member who understands the law and turn them loose. Diligence and regular contact is the best way to collect old debt. Diligence and good communication is the best way to avoid it in the first place.
Kyle Palmer, CVT, is a Firstline Editorial Advisory Board member and a practice manager at Silver Creek Animal Clinic in Silverton, Ore.