The Fuel of Your Practice: Collections = Profits + Expenses

Episode #326 with Dr. Ann Marie Gorczyca

If your collections were a bathtub, how much of it are you letting down the drain every month? You may be surprised once you find out! And to help you minimize your expenses and maximize your profits, Kirk Behrendt brings back Dr. Ann Marie Gorczyca with tricks and advice for collecting payments and getting your accounts receivables to zero. It’s possible with just a few changes to your practice! For more, listen to Episode 328 of The Best Practices Show!

Main Takeaways:

Collections are the engine of your office. Collect what is owed to you!

Don't keep a financial coordinator who doesn't have the ability to collect.  

Minimize your expenses, but don't skimp on value or quality. Cut expenses by cutting waste!

Look through your own mail. You may find errors on invoices.

Use the “magic pink stickers” from SmartPractice.

Don't wait 30 days until your patients’ payments are past due. Call them at 21 days.

Send an invoice to overdue patients every week until it is paid.

Have the doctor sign the invoice. It works like magic!

Electronic fund transfers are the best things you can do.

Don't get carried away with giving discounts. Keep track of them each month.

A weekly meeting is the best investment you can make with your team.

Quotes:

“I realized having a weekly meeting, one hour every week, is really the best investment you can make with your team, because you can go over all the scores, all your numbers, everyone can report their KPIs. You can say, ‘What are we working on? What's our top priority?’ And you have the ability to change things on a very fast pace, like that day.” (08:31—09:01)

“Collections equals profits plus expenses. Now, you might say, ‘Dr. Gorczyca, why are you so focused on collections?’ Well, because that's your bottom line. That's the fuel of the engine of your office. You'll hear a lot of dentists talk about production, production, production, production. But that's not really your fuel. Your fuel is your cash. And if you're only thinking about production, maximizing production and not focusing on your collections, you might be wasting time doing things that you're not profitable in, or maybe you're not getting paid for.” (11:31—12:20)

“I think the first 10 years of my practice life, I was very focused on production. But then, the older you get, the more you realize to be profitable and to truly work in the most efficient, smart way that you can, I think it’s a more direct focus for you to look at your collections and understand that collections equals profit, which is your salary. And I include my team salary in there as well, because if my team is getting a raise, I'm getting a raise. We’re in it together.” (12:51—13:41)

“Your profits are determined by how high your expenses are, so it is your goal to minimize your expenses as much as possible. Now, I'm not talking about skimping on value, if there are certain materials that you need that are the highest quality materials. I'm not talking about cutting expenses by cutting quality. I'm talking about cutting expenses by cutting waste, by cutting shelf life, by cutting things sitting on the shelf that you're not using or may never use, and also price checking. If you can get the same product from a different vendor and it’s exactly the same thing, why would you pay more money for it?” (13:43—14:34)

“Think of your collections as a bathtub, and your patient payments go in the bathtub and your insurance payments go in the bathtub. But there is that drain — your write-offs and discounts, or courtesies — that's letting the money out of the drain. So, the more you let out, the less collections there are there.” (15:19—15:51)

“When I...