How to Improve Billing & Payments in Your Vet Practice

It’s nearly impossible for a veterinary practice to achieve sustainable success without sufficient cash flow. Your employees still need to get paid and you’ve got overhead and ongoing upkeep of your clinic to worry about. If you are performing services but find yourself having to chase after clients to be compensated, or are struggling to get your finances out of the red, chances are you could benefit from tightening up and optimizing your billing processes. Let’s take a look at a few strategies to help you improve in this area.

Set a Policy and Stick With It

If you’ve been prone to making exceptions for clients in the past, now’s the time to buckle down and lay some ground rules. First and foremost, you need to create and document a formal payment policy. Ideally, we would recommend requiring payment in full at the time services are rendered, as this is standard practice in the veterinary industry. If you do offer other options, make sure you’re clear on what those entail and that your clients are fully aware before moving forward.

Communicate Openly and Frequently

Never just assume your clients know what your payment and billing policies are. Communicate them regularly. Post a “Payment Basics” flyer right near the front desk and include a disclaimer along with any paperwork you have your clients sign. Remember – you cannot adequately enforce a policy that isn’t well-documented and clearly communicated, so leave no ambiguity.

Offer a Variety of Payment Options

If you find that requiring payment upfront is a struggle for some of your clients, you might consider offering a few other options. For instance, you might decide to work with a pet insurance company. This enables your clients to defray some of their out-of-pocket costs for veterinary care while also ensuring that you still receive timely payment for your services. Another option would be to accept pet-specific credit plans, such as CareCredit. Offering several options can relieve the burden from your clients, improve cash flow for your practice and contribute to happier, healthier pets overall.

Educate Your Staff

It may sound elementary, but many practices struggle with cash flow simply because their employees aren’t doing their jobs adequately. For instance, if your front desk agent isn’t well-versed on your time-of-service payment policy, he or she might erroneously give a client the option of being billed. This undermines your ability to collect in a timely manner. To avoid this, make sure that everyone on your team is educated, both on the policies and procedures as well as how to speak with clients about payments.

Make Receivables a Priority

If you already find yourself in a hole with regards to a backlog of payments, don’t let your collections efforts simmer on the back burner – no matter how uncomfortable a task it might be. Veterinary medicine may be primarily about building relationships, but at the end of the day, it’s still a business. Be compassionate but firm when it comes to your accounts receivable. And recognize that a client who is consistently late and/or reluctant to pay may not be someone you want to continue doing business with anyway.

Designate a Go-To Person

If finding the time to work on billing is becoming more and more challenging, be proactive in assigning the task to someone else on your team that you trust. Not only will this take the weight off of your shoulders and free you up to focus on growing your practice, but it will give everyone in the clinic a point person and subject-matter expert to whom they can turn whenever there’s an issue. This will enable your practice to run much more smoothly, which isn’t just better for you and your team, but for your clients and patients as well.

Our Advice on Improving Billing and Payments in 2024

How should practices handle situations where clients are unable to pay for necessary treatments?

In handling situations where clients cannot pay for necessary treatments, veterinary practices should first ensure clear communication of payment policies and options. Offering a variety of payment methods, such as partnering with pet insurance companies and accepting pet-specific credit plans like CareCredit, can alleviate financial stress for clients. Additionally, practices should educate all staff on these policies to maintain consistency in client interactions. This approach not only secures the practice's financial health but also supports pet owners in managing the costs of essential veterinary care.

How can practices optimize their billing systems to minimize the time and resources spent on collections?

To optimize billing systems and minimize resources spent on collections, veterinary practices should establish and strictly enforce a transparent payment policy, requiring payments at the time services are rendered. Educating all staff members about these policies ensures consistent client communication and reduces billing errors. Additionally, practices can benefit from integrating electronic payment systems and offering multiple payment options, including direct partnerships with pet insurance providers. These strategies streamline the payment process, enhance cash flow, and reduce the need for extensive collections efforts, allowing practices to focus more on patient care.

What legal considerations should practices be aware of when establishing and enforcing payment policies?

When establishing and enforcing payment policies, veterinary practices must adhere to legal standards related to transparency, fairness, and consumer rights. It is crucial to clearly document and communicate payment terms to avoid potential disputes. Practices should ensure their policies comply with state-specific consumer protection laws that regulate credit and billing practices. Additionally, any agreements with third-party credit providers, like pet insurance or credit plans, must be scrutinized for compliance with federal regulations such as the Truth in Lending Act. Seeking legal counsel to review these policies can prevent legal challenges and maintain trust with clients.

What role can technology play in streamlining the billing and payment process, such as online payment portals or mobile payment options?

Technology can significantly streamline the billing and payment process for veterinary practices. Online payment portals and mobile payment options facilitate easier, faster transactions, allowing clients to pay bills at their convenience, which can reduce late payments and administrative overhead. Such systems can also integrate directly with practice management software, automating invoicing and record-keeping, thereby minimizing errors and freeing up staff to focus on patient care. Implementing these technologies enhances client satisfaction by offering modern, flexible payment methods and improves the financial efficiency of the practice.

How can practices benchmark their billing and payment performance against industry standards?

To benchmark billing and payment performance against industry standards, veterinary practices should first gather relevant financial metrics such as average days outstanding (ADO), payment collection rates, and patient payment times. Practices can compare these metrics with published industry benchmarks available through veterinary associations and business performance studies. Additionally, attending industry conferences or participating in webinars can provide insights into the latest standards and technological advancements. Regularly reviewing these comparisons enables practices to identify areas for improvement, adopt best practices, and strategically adjust their billing procedures to enhance efficiency and profitability.

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