Category Archives: Current Accounts

Keeping Current Accounts Can Help Your Practice Thrive

It is not uncommon today to see dental practices struggling to pay the bills. Default rates for practice loans are as high as five percent. Looking at two decades worth of history regarding dental practices, a dentist named Michael Warm came up with a number of reasons why practices fail. Here are a few that perhaps you’ll be familiar with in your own practice.

Two of the most common reasons for failure are also the most obvious – a lack of cash flow and working capital. You probably thought you had plenty of working capital when you got your loan to start your business. The logic is that the loan gets your practice set up with all the equipment you need and your growing list of clientele provides you with all the cash flow you’ll need to grow your business from there. Unfortunately, too many dental practices get into a situation where they’re spending more than they bring in, and there are a few reasons for this, one being the number of patients who don’t keep current accounts.Profit 1

Often, the best use of start-up capital is not only to outfit the office, but also to market the services the practice can offer clients. Aggressive marketing is a priority, or at least it should be.

Using capital funds for marketing is definitely a wise use of the money. What is unwise and can lead to trouble later is using capital funds as an emergency account. However, if they are ever dipped into for any reason other than business growth, it’s important to replenish them as soon as possible.

When you present your patients with a recommended plan for better dental health, they weigh the cost against what they can afford and whether they think they can do without the recommended treatment. While most businesses will say they have an 80 percent acceptance rate, according to Dr. Warm, that’s misleading. They might see eight out of 10 patients agree to the recommendation, but the two who don’t are the ones presented with the most costly procedures. A low acceptance rate, by quantity, is another reason practices fail. Taking an accurate measure of your acceptance rate is the right step to take in finding room for improvement. Most dentists find that expressing the true value of the expensive procedure is the weak link for them.

It takes an investment on your part to bring in new clients. Dentists who fail to see this will surely witness a decline in business. We’re back to talking about marketing again. You spent money on marketing when you started your business. Unfortunately, it’s an expense that shouldn’t go away. Keep in mind that for every dollar you spend on marketing, three should come back to you.

Regardless of how much you work on improving your bottom line, you’ll have patients who refuse to keep current accounts. When partnering with a third party debt collection company to manage your accounts, you’re better positioned to collect every dollar that’s owed to you. This is where Omega-RMS, llc., excels. Call us today and find out how our solutions can help you improve your cash flow by collection on payments that your practice depends on.

Are You Keeping Your Current Accounts in Check?

Economy 4As a small business owner, you know that cash is king. You also know that the amount of time it takes for you to collect on services rendered often gets in the way of your ability to keep cash flowing. Perhaps you’re struggling to grow your business for this very reason.

Many small business owners have focused on taking measurements of their cash flow situation to give them a better projection of where they might find difficulty. Some businesses only do this on a yearly basis while organizations that are truly struggling will take weekly measurements. It’s businesses like these that really need to consider an alternative to their current methods.

When looking at current accounts, you do your best to encourage your clients to pay as soon as they possibly can. To achieve this, you stay prompt on your billing, often getting invoices out within days of a transaction. Perhaps you’ve even demanded a certain percentage of the bill to be paid up front to keep your cash flow situation in a better place? But most of your clients will avoid paying for as long as possible so they can improve their cash situation.

Companies that demand full payment at the time of service have no problems with cash flow. However, they’re probably losing out on a very wide array of clients who can’t pay everything up front and rely on some type of credit or financing before they’ll do business. Keeping up on your current accounts and improving your receivables are vital processes for companies that extend credit.

What are some of the methods companies use to get their clients to pay faster? Start with offering discounts to clients that pay early. This develops an incentive for them to part ways with their cash on a timelier basis. Improving receivables also includes making sure your clients are credit worthy. In some cases, partnering with a third-party financing company can take the work out of the effort while flexible financing is offered to your clients. Keeping an eye on slow-paying customers also pays off in the end. If you know who has a history of slow payment, you can be more aggressive with them and keep payments current and your cash flowing.

Many companies have developed plans for surviving cash shortfalls. In this unfortunate situation, companies will plan for the day when they don’t have enough cash to make payroll if they pay all their utility bills or vice versa. Long before they find themselves in this situation they should have considered selling their receivables to a third party for quick cash.

Omega-RMS has solutions that get organizations strapped for cash out of the hole and on the way to growth. With the accounts receivables management solutions at Omega, clients sell off their receivables and gain a better cash position, instantly. It’s not only a method for increasing cash flow, it also takes away the burden of cashing down debt.