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    Dr. likes the work but is requesting we match fees of a southern lab 600 miles away...

    Discussion in 'Removable' started by nickate, Jun 19, 2017.

    1. vurban210
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      vurban210 Active Member Full Member

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      This is very generalized and applies to "the average business". While the percents might fluctuate the fact is that your accounts receivable loses value as it ages. Carrying AR costs money for any business.

      Value of receivables as they age:

      30 days ~98%

      60 days ~89%

      90 days ~80%

      120 days ~69%

      This is from a Harvard study and there are other studies out there with some being more/less favorable. But they are all in the same ballpark. It also depends on the business but that is why I said "average business".

      Edit to add: There is realistically zero benefit to charging balances at the end of the month. Payment per case is the only way to go with credit cards. Allowing someone to ride you out for a month then charging their credit card just end up costing you more money.
       
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    2. JMN
      Curious

      JMN Christian Member Donator Full Member

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      I prefer to run cards monthly for the simplicity and time saving. Say it takes me 2-3 minutes to run a card, print receipts, attach/file them. If I do it per case, that's a lot of time vs once per office...
      I use a web based virtual terminal and have no landline in the lab for a normal terminal, nor an Android or Apple mobile.

      A one man lab may do 5-10 cases a day, maxed out. 20 workdays on average months. That's 100 to 200 cases
      Card running per case, that's 3.5-5 hours up to 7-10 hours.
      Vs. 20 offices and 40 min to one hour.
      The money may be worth more, but I can also do a lot of stuff in the least optimistic 3 hours saved.

      Or I could just be the lease efficient card processor possible that was ever alive.

      Is the value reduction attributed to:
      the effort used in collecting as they generally take more time/effort the longer they are unpaid?
      assuming a % of interest you are paying to suppliers that the income would have prevented?
      inflationary pressure?
      perceived value reduction after delivery? (buyers remorse)

      I'd like to see the study, please, if you have more details available.
       
    3. slotboom.f

      slotboom.f New Member Full Member

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      Standard discount policy:
      We give the same percentage on lab work as the dentist to his patient.
      Why?
      Because we have a mutual interest and that is : the patient


      Verzonden vanaf mijn iPhone met Tapatalk
       
    4. slotboom.f

      slotboom.f New Member Full Member

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      His own fees that is:)


      Verzonden vanaf mijn iPhone met Tapatalk
       
    5. doug
      Inspired

      doug Well-Known Member Full Member

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      We use Card Connect(Marathon) and run cards once a month. I have all new accounts on CC, it makes it so easy and whatever the cost, it has a lot of value to not have to chase people for payment. I just severed ties with an account that didn't want to convert to cc and was perpetually late in paying. I sleep better and get my money in less that 48 hours.
       
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    6. vurban210
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      vurban210 Active Member Full Member

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      It's always "best case scenario". When I say that running cards at the end of the month is not worth it that is comparing to Net 30 terms. But if your customer is not paying in those terms - say they are paying in 45 or 60 days then certainly running cards at the end of the month is more beneficial.

      As far as the loss of value, I'm sure it is all those things you stated plus a percent that factors the debt never getting paid. I can't find the full study, but the chart I saw was from a 2009 edition of the Harvard Business Review. There are other studies out there as well. Percents can be higher or lower, but the fact remains that AR loses value over time and how much certainly depends on the business. That is why there are companies that do AR factoring.
       
    7. JMN
      Curious

      JMN Christian Member Donator Full Member

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      That will help. Thank you.
       
    8. Affinity
      Question

      Affinity Well-Known Member Full Member

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      I don't have any Drs that pay late, however the ones that have in the past, have cost me so much that it would've been worth it, in hindsight...
       
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    9. JohnWilson

      JohnWilson Moderator Staff Member Full Member

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      I've outline my collection policy before but I will share again

      I split have my account base to have cycles that run 1-30 the other half 15th through 15th. The day the month closes I automatically run the card. This has been the biggest and best change in my career. Cash flow is wonderful, my AR is "nearly" perfectly clean.

      Of course its sad that I was forced to implement this based on some really poor business decisions and trust, but today I could not be happier with my path. Yes it adds up in fees and if you concentrate on that you will find a way to allow clients to pay when they feel like it.

      Of course there are a ton of other business decisions that need to run concurrently to control costs and have your fees adjusted as things change and so often I see labs afraid of raising their prices and this is an even bigger mistake.
       
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    10. denturist-student

      denturist-student Active Member Full Member

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      Well there is an opportunity here. Make a scaled price list and offer a certain percentage discount for the amount of work the doctor orders from your lab....
       
    11. JMN
      Curious

      JMN Christian Member Donator Full Member

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      Yuk. Most dentists wouldn't give a break if a pt needed 28 fillings. I may be missing the business sense module in my head for this, but that only really makes good deals when mass producing I thought.
       
    12. user name
      Question

      user name Well-Known Member Donator Full Member

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      Why?

      Poor idea.
       
    13. Affinity
      Question

      Affinity Well-Known Member Full Member

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      why? The world needs more denture mills?Hmmmm2
       
    14. denturist-student

      denturist-student Active Member Full Member

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      It gives the doc incentive to keep coming to your lab rather than going here and there....You can also use that to complete with outsiders...that rationale being that an account is there and includes some administrative costs which are not there with multiple orders.....ergo it may be wize to share that savings with your clients.....Do you folks also send out Goodies at Christmastime and other times of the year?
       
    15. JMN
      Curious

      JMN Christian Member Donator Full Member

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      I do. Made a bunch of cobblers last year, the recipie in the cooking subforum to be exact.

      Interesting idea there on it being an extra retention method, but what happens to most of us is they leave for a lower price anyway. You can always lower your price, just like selling a house, start high.
       
    16. Randy Hill PhD

      Randy Hill PhD Member Full Member

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      Hi Doris,

      Good to "see" you. Who are you with now for CC's? I'm with Card Connect and they suck! Take too much out in fees.
      HOpe things are going well.
      I've moved out of Va. into NC.
      Are you pressing Lisi?
      I need to find the pressing parameters from someone on here.
       
    17. TomZ
      Amused

      TomZ Well-Known Member Full Member

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      nope
       
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    18. JMN
      Curious

      JMN Christian Member Donator Full Member

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      Vurban, I figued you'd be interested, I found some more
      The HBR study wants $9.00 to read it, maybe later.:
      https://hbr.org/product/accounts-receivable-valuation/IES532-PDF-ENG

      These are all from a medical office perspective too, yippie.

      http://www.dynamicchiropractic.com/mpacms/dc/article.php?id=46028

      http://pmaa.org/weeklyreview/attach...ost of Managing Your Accounts Receivables.pdf

      https://opedge.com/Articles/ViewArticle/2010-07_02
       
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    19. Doris A
      Angelic

      Doris A Well-Known Member Donator Full Member

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      I sent you a pm.
       
    20. Car 54
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      Car 54 Well-Known Member Donator Full Member

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