As we previously learned, your Net Production is the maximum amount you can collect, and determining how much of that you’re actually collecting will give you your Net Collections percentage. This metric is immensely important to your practice, because it’s the money owed to you. Every dollar of it represents the time, effort, and costs you put in, and you’ll never get those back. Therefore it’s incumbent on you to collect 100%—or more—of your Net Production.
A lot of dentists look at their Net Collections, see it’s at 95%, and think that’s good. And while that would be true on an exam, it’s not great in Net Collections. If you’re collecting 95%, you’re leaving 5% on the table, so think about your Net Production—what’s 5% of it? If your Net Production is $1 million, you’re losing $50,000, and that’s a huge figure that should be in your pocket.
If your number is less than 100%, it indicates one of several possibilities:
- A lack of expectations around collections
- Inadequate financial policies
- Insurance claims systems issues
- The person collecting your money has the wrong mindset about the value of dentistry
If this is an issue for you, you can get started on fixing it today:
- Find out where the money is. To do so, pull an AR report and analyze it. Are patients and insurance companies paying you? Compare this information with your financial policies—are they being used?
- Your team must align around your expectations and beliefs, and the systems required to fulfil them, so set aside time to create this alignment. This communication goes a long way toward collecting 100% of your Net Collections, and as that percentage increases, it will transform your practice.
