1. Collections, Accounts Payable, Ordering, and Inventory

2. Collection Management Each office/Dr. has own policy. Collect every penny? Send letter? When? Turn over to collection agency? Write off at tax time? (business loss) Pt. should feel you are working with them. Upset/angry patients don’t like to pay.

3. Account Status Current: No Acct. balance or payment last 30 days. Past Due: Acct. balance, No payment last 30-60 days. Delinquent: Acct. balance, No payment 60-90 days. Collections: Acct. tuned over to outside agency to collect balance.

4. Collection Management Fair Debt Collection Practice Act Rules for collection of money/past due accts. Cannot call at inconvenient hours No 3:00 am calls Cannot call at work (unless authorized) Cannot lie I’ll take your car if you don’t pay. Cannot Threaten I’m going to send people to beat you up if you don’t pay.

5. Collection Management No payment? Call pt. (most effective way to contact) Set date to receive payment. Don’t receive $$$… Call pt. back Make new payment arrangements. If unable to contact…. send a letter.

6. Collection Management Collection letters: Can’t reach by phone…..  Certified mail…. Requires signature of addressee Confirms receipt May include SASE (self-addressed stamped envelope) Encourages payment of balance…. NOW!! If returned…”no forwarding address” Turn over to collections…

7. Collection agency! Highly delinquent accounts 90+ days past due Must follow: Fair Debt Collection Practice Act Paid….? (Motivation) % of amount collected. (Most Common) 50% (example) ½ is better than nothing

8. Collection agency! Some charge a flat fee: (not as common) Examples: $20 to collect up to $100.00 $50 to collect from $101.00 to $200.00 $150 to collect from $201.00 to $300.00 Fees would continue to go up… According to amount being collected. All info reported to the Credit Bureaus

9. Special Collection Situation? Bankruptcy….. Once declared… Can no longer Call / email Send letters Contact in person Death… Can’t take $$ with you.. Address letters to the ‘estate of’ Creditors get $$$ before family

10. Recording Payment Once $$$ collected: Agency fees are subtracted Balance sent to Dr./office. Record payment on: ledger card computer software Stamp checks w/ endorsement stamp  Record on deposit slip with cash Deposits should be done daily.

11. Accounts Payable $$$ the practice owes to others. Accounts receivable = GROSS INCOME All expenses required to run the dental = OVERHEAD practice. Gross Income - Overhead = Net Income Net Income = True profit. (amount kept after paying the bills)

12. Expenses Fixed expenses Creditors Mortgage Payroll (salaries) Gross pay = before taxes Net pay = after taxes Same wage ea. Month Not based on hours worked. Some utilities Garbage Cable Towel/gown service. Variable expenses Lab fees Supplies Payroll (hourly) Based on # of hrs worked. Some utilities Electric Water/sewer Phone Equipment repair

13. Supplies Expendable Aka disposable Cotton rolls Saliva ejectors Pt. bibs Gloves Barriers Masks Anything thrown away. Non-expendable Aka durable goods Cure light Autoclave Ultrasonic Amalgamator X-ray equipment Dental unit/chair Stuff you keep and reuse

14. Supplies Ordering: things to consider. Shelf-life: How long you can store a product and it’s still “good”. Rate of use: How fast you use a product in a specific period of time. Lead time: Time between placing and receiving the order. Reorder point: ensures enough of the product until order arrives. (margin of safety) Price…….$$$

15. Supplies Price Item price Cost of a single item Unit price Cost of grouped items Bulk price Cost of grouped units Price Break Reduced price for buying in “bulk”

16. Supplies Inventory Supply Systems Monitor supplies on hand vs. needed Ensures you have supplies when needed. Usually one person (lead assistant) Can be very challenging Finding low prices Staying in a budget Taking responsibility for errors

17. Supplies Tag system (inexpensive) All products have a tag When product w/ tag is used, Tag is placed in a: “to order” file, Order is placed Order is received Tag is placed back on new product. Bar Code system Similar to grocery store. All products have a bar code. May be on a “tag” or, in a book. Bar code is scanned Order is placed Order is received.

18. Supplies Receiving Supplies Packing slip Lists what was packed in the box. No prices (Invoice) Check for: Damage Brands Size Types Credit slip Issued if items are returned. Back order slip Issued if a supplier is out of a product or item. Shipped ASAP

19. Paying accounts Always double check Invoice/statement Could be error Could be a double charge. Writing the check Blue or black ink (gel Ink) Harder to “wash” checks Amount in figure and words. Recorded in the register. Do not pre or post date.

20. Reconciling Aka: balancing the check book against the statement from the bank. Update check book Calculate outstanding checks and debits Add deposits made, but not shown to the ending balance. Subtract the amount of the outstanding checks. This amount should match the balance in the check book. If not, need to track down the error and re-balance.

21. N.S.F Non-sufficient funds No money in the account to cover a check written. Bank may charge a fee Office may charge a fee Amount is added back into account at the office. Usually caused by not reconciling.

22. Petty Cash Money kept in office: Less than $100 Minor unexpected expenses Make change for cash paying customers Place a receipt or voucher when taking money out.

23. Conclusion Paying bills is very important. Accuracy counts Attention to detail is important. When in doubt…. Ask questions Any questions……..?