In many ways a process is much like a roadmap. It gives you step by step directions on how to get from point “A” to point “B”. Whenever driving long distances or to unfamiliar parts of town it would be silly to set out lacking a way to determine if you are headed in the right direction and when you will reach your destination. The roadmap (or GPS) lets you know sooner rather than later if you have steered off course and what you need to do to get back on track. Business processes do the same exact thing.
Too often “Formal Processes” are thought of as a characteristic of larger corporations and bring to mind images of red tape and slow results. For that very reason, many smaller businesses feel they don’t need formal processes. Not having formal processes for the vital operations of a business essentially means the business is relying on a strategy of hope, rather than one that gives maximum opportunity for success. Take for example the accounts receivable in a dental practice. It is one of the main pillars of running the business, without which it would be impossible to pay for staff, purchase equipment, and see patients. Although the significance of this part of the business sometimes isn’t reflected in the current processes practices have. Below are some questions to think about when developing the practice’s accounts receivable process.
- When should patients be sent to a collection agency?
- What discounts are extended to patients and when?
- When are the monthly or weekly reports going to be reviewed with the doctor?
- When is a credit balance report ran and when will refund checks be issued to patients?
- What in-house financing terms is the practice going to offer?
- When will statements be issued to patients?
- Will payments be collected at the time of service?
- Are there any exceptions to these rules?
Having a comprehensive, written, formal process for the accounts receivable has many benefits. It will minimize balances from getting too old, improve the cash flow of the practice, limit time spent with problem patients, and improves communication between the team. The only downside is the time it takes to actually write-out the process itself. But just like a road map, if you spend 5 minutes trying to determine where you want to go, it could save you hours of time in the future.
If you have any questions about how to formalize the processes in your practice please don’t hesitate to get in touch with us.