It happens in every business – you deliver and a customer doesn’t pay. Whatever the reason, delinquent payments disrupt the cash flow of your business. For smaller laboratories, regular income is especially important due to the limited amount of cash flow to pay overhead and materials.
Here are some simple rules to make sure you get paid:
1. Implement tracking software
Start using software to monitor all income and expenses. Input all account information into the system. That way, your staff can contact dentists to remind them that a bill is due. Some dental lab software programs like Evident Lab offer automated follow-ups.
2. Create policies (and stick to them!)
Policies are essential to help you and your employees determine when to take action. Setting firm deadlines and sticking to them ensures all of your clients receive the same treatment. If you get push back from dentists or requests for extensions, rather than negotiate, refer them to your policy document. Also, charging interest on late payments usually prompts action.
3. Get a credit check
When a dentist places his/her first order, you could save you thousands of dollars and a ton of time by running a credit check.
4. Follow up
Following up directly with dentists before a payment is due is one of the most effective ways to ensure payment. Again, software can help. Evident Lab provides an aged balance report to let you see who owes money, templates for debtor letters, and monthly statements to ensure that accounts are transparent.
Dentists are running businesses as well and may be struggling with cash flow problems of their own. See how you can work with them to get your payment issues resolved to your satisfaction.
Managing cash flow is one of the most important skills in running a business. Remember, payment is not personal. A policy-driven and pragmatic approach will keep the money coming in and stay ahead of the curve.