3 strategies for managing accounts receivable in equine practice
Each veterinary practice has its own philosophy and protocol regarding accounts receivable. In most cases, equine veterinarians treat receivables with kid gloves. But in a Table Topic session at the AAEP Convention in Las Vegas, Dr. James E. Guenther, MBA, CVPM, shared a few tips to get you thinking on the topic:
1. Change your attitude. “First, changing accounts receivable starts with changing your mindset,” says Dr. Guenther. “Become assertive! It’s your money you’ve loaned clients and, in some cases, total strangers. Don’t let fear of confronting a client keep you from getting money owed you.”
2. Analyze your cash conversion cycle. This is an equation in which you see whether your cash flow meets the accounts payable. For example, most practices order products, pay for the products, and finally receive the money for the products, Dr. Guenther says. “Simply put, this is a negative cash flow,” he says. “The object is to turn products more frequently to reduce the number of days of holding an IOU on your bills.”
3. Ask for payment at the time of service. This strategy is something you must learn how to do, Dr. Guenther says. Accept cash, checks, or credit cards; keep clients’ credit card numbers on file at the office, following Red Flag rules; or bill clients weekly. “It’s very important to put a detail-oriented person who’s assertive in charge of collecting payments,” he says.