Building a Dental Practice FAQ
Steve Kikikis, Healthcare Real Estate Broker, answers 3 of his most frequently asked questions – How long does it take to build out a dental practice, how much does it cost, and how can you save money?
Tips to Avoid Fraud and Embezzlement
We see embezzlement in the dental office all too often. The average embezzlement amount REPORTED is over $100,000 in a dental practice, and we know most is not reported or ever discovered. Please review the following tips to avoid embezzlement, as well as signs from employees to be aware of.
-Limit access to dental software to make adjustments, and format software to disallow deletions or changes after the close of each month. Assign passwords to each employee. Ensure the software company understands that you are the only person that can make changes to the software.
-Clearly set expectations and protocol for making adjustments.
-Train on reading insurance Explanation of Benefits and making accurate insurance adjustments. Verify random EOBs and accounts on occasion.
-Review daily reports for adjustments, provider production (ensure there are no “zero” charges), collections, over-the-counter collections, and audit/deletion. Ask questions and research as appropriate.
-Review and confirm the accuracy of daily reconciliation of deposit, petty cash, and cash drawer. Confirm monthly bank reconciliations.
-Input and use appropriate adjustment codes.
-Review accounts receivable aging reports each month and research any accounts as appropriate.
-Do not allow team members to purchase things for the office and be reimbursed.
-Match up all accounts payable checks with statements and confirm accuracy. Watch for vendors or names you don’t recognize or come up frequently.
-Confirm all bills and credit card statements are accurate.
-Never sign a blank check for a team member, patient, or vendor.
-Ensure checks are in numeric order and keep all voided checks.
-Look for trends, such as missing checks, incorrect deposits, missing charts, increased adjustments, and patient complaints.
-Review the details of each team member’s paycheck and year-to-date numbers.
-Perform background checks according to state law.
-Have your dental-focused CPA involved with your bookkeeping.
-Implement a comprehensive written Office Policy and Employee Manual.
Potential Employee Warning Signs
- Resistance to change or having your dental CPA or consultant view additional practice information
- Collections have slowed with no justified reason
- Daily deposit reconciliation is not being done timely or is inaccurate
- Adjustments increase with no justified reason
- Team member refuses to take a vacation, wants to take work home, has a financial crisis, and/or resents your income and lifestyle
What Happens to Accounts Receivables in a Practice Sale
Kevin Brady discusses the ways Accounts Receivables are transitioned in a dental practice sale.
Increase Collections Without Spending Money
By Megan Urban, Transition Specialist
After working with hundreds of dentists for many years, we want to share the top 5 areas of missed production/collection. With small changes to your everyday routines, you can increase collections to put towards new equipment and technology, as well as savings and retirement.
1. Patient Retention
Everyone worries about current new patient flow, but what about all the new patients you have seen? If you have 1,500 active patients, you should complete at least 2,550 codes 1110, 1120, and 4910. On average, we see at least $30,000 per year in missed collections in hygiene (patient retention) and that doesn’t include collections from potential treatment diagnosed in hygiene. Small changes to your hygiene program can help you capture more of this missed production.
2. Referrals
Most dentists report they ask for referrals, but do you really? Most dentists state they talk about it at team meetings or huddles, but who is asking and what exactly are they saying? With comfortable scripting and a plan, you can successfully ask for referrals.
3. Incomplete Treatment
How do you and your team urge your patients to complete treatment? How does your team follow up on incomplete treatment? Do you know exactly what they say when they call? We often see about $100,000 in incomplete treatment that can be scheduled by using solid scripting.
4. No-Shows and Short-Notice Cancelations
On average, we find at least $40,000 per year in missed collections due to missed appointments. It’s much higher if it’s large production cases. With proactive scripting at scheduling and confirmations, this can be reduced.
5. Accounts Receivable
At least $90,000 is the average of uncollected production. Setting solid financial arrangements from the beginning will minimize this issue, and I’m not talking about simply stating what their balance will be. Financial arrangements and collections is also customer service. Remember the old saying, “the worst fitting pair of dentures are the ones not paid for”!
Please contact me for a complimentary analysis of these items in your practice to locate areas of opportunity.
503.830.5765
Read MoreWant Your Own Practice, But Don’t Know Where to Start?
The decisions you make now will impact you and your income today and in the future. We are here to assist you to make the best decisions for you and your family.
Gather your team of trusted advisors.
- Start with your Transition Advisor and they can recommend dental-specific banks, attorneys, and CPAs to guide you every step of the way. We’ve done this many, many times, and want to share our experience.
- We understand money is a concern, but decisions you make now can equate to thousands of dollars that you may never recoup over your career, so gathering your team of trusted advisors is priceless.
Your Transition Advisor can help you:
- Understand the practice and the purchasing process.
- Assist you to do a chart audit and other due diligence to determine the cash flow and if it is the right practice for you.
- Work with your other advisors to set up the best entity for your practice, acquire solid financing, and ensure all necessary documents and contracts are in place.
- Make a plan to retain patients and team, and implement processes and procedures to help you to increase production and collection, as well as reduce stress.
We can help you with the process of buying a dental practice. Contact us today!
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