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Minimising client debt

We all love to believe that all clients will pay on time for our services, but in reality it does not always happen. Outstanding payments can really affect your cashflow, and it often means more admin time organising a way to collect the money. Any practice owner, even sole practitioners, need to develop a system that helps reduce the likelihood of people not paying in the first place, and then a way to collect the debt if that occurs.


There are lots of reasons why clients may not pay on time. They can be either internal or external factors to your practice.

The external factors can be things like clients forgetting to bring their wallet, or just not getting around to paying. They may also be related to third parties who are footing the bill, for example insurance companies, who need to approve payments which may result in a delay.

Internally in your practice however, there can be things that happen that might not encourage clients to pay on time. Getting on top of these can help to communicate a message about payments to your clients in a way that helps them understand what you expect from them. Have a think now about how you communicate about money to your clients.

Ask yourself these questions:

• Do clients know that you are a private practice and they will need to pay?

• If clients are coming under any third party funding, such as Medicare funding, are they aware of how this will occur? Will they need to pay up front and claim back from the third party later? Will there be a gap payment that means they will be out of pocket, and do they know about that before paying?

• Have clients been given an idea of the cost of your service at the time of booking the appointment? How is this communicated – email, via phone, letter, or listed on your website?

• Are clients aware of your expected payment terms? If they need to pay on the day, how is this communicated prior to their appointment and during their appointment? If you send invoices, what are the payment terms? 7 days, 14 days, and how well do you chase this up?

• How quickly do you get your invoices out? The longer you take to issue invoices, the longer it takes to collect the payment.

The last question I have for you is about your practice system for collecting payment… do you have one? If not, it is wise to start documenting this – if there are flaws in your system or the above questions are left unanswered, think about how you can fix those aspects.

Read 1590 times Last modified on Tuesday, 26 April 2016 12:05

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