You don't need to work harder, and you don't need to produce more. You just need to collect what you're owed! In this episode, Kirk Behrendt brings back Robyn Theisen, one of ACT’s amazing coaches, to show you how much money you're leaving on the table and how to tighten your collection gap. To learn how to start collecting 100%, listen to Episode 932 of The Best Practices Show!
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Episode Resources:
Main Takeaways:
Quotes:
“I tell teams all the time that 95% would be an A in most situations. In terms of collections, I would not consider that to be an A because it leaves so much on the table, and there is so much in there in that 5%. It makes a big difference.” (4:00—4:15) -Robyn
“It's not about the money. It's about collecting what's actually owed to the practice. We teach people how to treat us. In a practice, it's very important to train patients how to show up and how to pay. And what's cool about this is there's opportunity in there . . . A lot of times, team members aren't given the opportunity to really understand how to do this, learn more about the practice, and get good training. An admin, of all of the positions in a dental practice, has the least amount of great training in all of the industry. But if somebody learns how to do this stuff — that's why these podcasts exist. So, if you're in this place, this is a great podcast to share with your team member, Susie, and say, ‘Let's have a conversation about it.’ Don't make it a negative one. Say, ‘There's opportunity that exists here.’” (4:19—5:09) -Kirk
“The industry benchmark is typically 98-ish percent. I know for myself, and I know other coaches on the team, we really encourage our teams to collect 100%. Again, to your point, we've already made the adjustments and the write-offs to the gross production number. Now, we're down to what we've already written off to our net production, so every dollar of that should be collected. So, 100% is what I encourage my teams to strive for, and there are so many that do. So, it is possible.” (5:21—5:50) -Robyn
“I tell all my teams that you don't have a collections issue — you have a financial arrangements issue. That's really where it all starts. So, making sure that you have and that you're tracking those, and having firm and strong financial arrangements is important. In terms of accounts receivable, when you do have accounts receivable, how often is that worked? How often are calls made? How often do statements go out? One thing that I have seen that can really change that cash flow piece or really help with the collections percent is sending out your statements on a weekly basis rather than monthly. What that enables is as soon as a claim comes in and a claim is processed and there is an amount remaining, on a weekly basis, your patients are hearing from you so that your AR is not longer than it should be, or your claims aren't aged inappropriately because you're sending out the claims right away. So, that's a big thing, is sending out those weekly statements.” (6:19—7:17) -Robyn
“Having a gap in your collections percentage is just the tip of the iceberg, and it causes other problems. The second thing that it does is it's going to have a direct impact on your overhead percentage, because when you think about this, your overhead is not a percentage of your gross production; it's a percentage of what you actually collect. So, overhead percentage is a direct product of your collections.” (8:50—9:15) -Kirk
“Collect 100%. Hold yourself to that standard, and your practice, and ask the question, how do we get to 100% of our net collections? Then, the other thing too, you'll know if you ever become a client of ours, we do have a lot of clients that come into ACT Dental in the Pro Coaching program, and they have to be at 104%, 103% because they've been at 95% for so long. So, we're collecting a lot of old debt, bad debt, getting it healthy until it normalizes itself right around 100%. But really, all roads lead back to a solid financial arrangement.” (11:24—12:02) -Kirk
“Every dollar that we tighten up in the effort gap, the collections gap, and the overhead gap starts to fall down to true profitability and, again, back to the collections gap. So, if you take your collections from 95% to 100%, think about this. Your costs are already stabilized. Every dollar that you improve rolls down to true profit.” (13:01—13:25) -Robyn
“I have doctors that'll say, ‘I need to produce more. I need to produce more.’ When you start to look at the different gaps, many times, it's not about producing more. It's really, if you collected everything that you did produce, it would make the impact that you're looking for. So, it's not always about outputting more. It's tightening up some of those things to be able to collect on every dollar that you have, and that trickles down to the profitability.” (13:31—13:51) -Robyn
“Verbal skills do matter. You do need to help somebody either develop or grow those skills so they're strong in those conversations around money. They don't have to be mean, but they can be firm in those conversations. Firm and friendly.” (14:27—14:46) -Kirk
“At the beginning, I hear a lot of, ‘Oh, it's only 1% or 2%.’ When you really start to look at what 1% or 2% means over time, it's a big deal. So, really truing up your systems to strive for that 100% translates all the way down into your profitability and what you're able to put back into the practice.” (16:22—16:40) -Robyn
“You talked a lot about empowering your team and having those financial arrangements. It really does all start with that. So, making sure that you're solid on what those arrangements mean and what the follow-up means. And words matter. Verbal skills matter. All of those things make a difference in that collections part, and it really starts with the front. It's the back and the leadership that are supporting the front and their endeavors to collect the money.” (16:48—17:12) -Robyn
“Really have your systems in place, following up on accounts receivable, following up on claims that may be past due. That can be a way that quickly gets your numbers out of whack, is too many past-due claims. So, having a system that you're following up with those after 21 days, those would be some places to start to really get that collections gap in line.” (17:15—17:33) -Robyn
“When you start to work on the systems, number one, the person grows as a result of the system. They're following the system. They're probably part of helping create the system, and then they own it, and they can also cross-train other team members about it. I would love to have everybody work with me forever, and then we all retire together. But the reality is that's not how work goes. You might have Susie that's up there, and she does a great job. One day, she's not going to work for you. So, the system allows you to be able to stabilize the business and continue to create those results. Every time you create a system, you save thousands and thousands of hours in the future. The new people that come in can go, ‘How does this work?’ and you can show them the system. There's another benefit of creating systems. People now can free up more energy to give themselves to the things that matter most in your practice. So, there are multiple facets to this.” (17:35—18:23) -Kirk
“The bottom line is this: you've worked way too hard to leave this money that you've earned — you've actually earned it — on the table. You're just leaving it there and not claiming it. The goal of this podcast is to help you understand that and create systems so that you can be healthy around the protocols around money. When you shrink your collections gap, you're going to finally feel confident around these numbers. You're going to go, ‘We actually have money left.’ Trust me, it works.” (18:23—18:49) -Kirk
Snippets:
0:00 Introduction.
1:45 The collection gap, explained.
2:43 95% is not an “A” when it comes to collections.
5:11 What your collection percentage should be and why it might be off track.
8:48 The impact of gaps on your overhead percentage.
11:14 Collect 100%.
12:36 Shrink the collections gap for true profitability.
14:26 Verbal skills matter.
15:29 Know your numbers.
16:17 Understand what 1% or 2% means over time.
16:42 Final takeaways.
Robyn Theisen Bio:
Robyn Theisen brings an entire life and legacy of dental experience to the team and every team with which she works as the daughter and sister of dentists. With almost 20 years of experience in dentistry, her roles ranged from practice management to operations at Patterson Dental to coaching teams. Robyn’s passion is empowering teams to realize that they can dramatically impact the lives of the people they serve by implementing skills and systems to remove barriers to life-changing dental treatment. She has done it for decades and does it every day with dental teams.
Outside of coaching, she enjoys time with her husband, Rob, and two daughters, Emerson and Ruby. She loves traveling, music, fitness, and cheering on the Michigan State Spartans.