This article is contributed by Prosperident – Dentistry’s Embezzlement Experts.
Cash flow is the lifeblood of every practice! Time is not on your side when it comes to collections. Collect or close your doors – yes, it can be that simple. Even with excellent skills, poor systems can bankrupt you. Last month, we discussed how AR delinquencies can make you more vulnerable to fraud. This article will focus on recognizing the challenges and reducing those vulnerabilities.
Lack of Proper Training
One of the biggest hurdles in receivables management is a lack of structured training for staff involved in the process. Untrained employees may struggle to follow up on outstanding insurance claims or patient balances, missing opportunities for timely collection. Errors made by staff members who are unfamiliar with billing complexitieswill compound AR issues.
- Solution A: Train
- Solution B: Outsource
High Employee Turnover and Staffing Shortages
High turnover rates or inadequate staffing levels can further complicate AR management. Collection activities are easy to put off when teams are overworked or understaffed. This results in unaddressed claims, unpaid patient balances, and inefficient collection efforts, leading to a growing AR backlog.
- Solution A: Hire
- Solution B: Outsource
- Solution C: Allocate this task to a specific staff member
Complacency in Routine AR Management
Over time, AR management can become routine, and employees may lose their urgency in following up on outstanding payments. This complacency results in missed payments and a growing backlog of overdue balances, exacerbating cash flow problems. To keep their team engaged, it is imperative that a practice owner review receivables monthly with their team and have the knowledge of the status of their accounts.
- Solution A: Monitor -Practice Owner and staff
- Solution B: Outsource
Discomfort in Payment Conversations
Discussing money can be uncomfortable. Some employees hesitate to ask for payments, causing collection delays. This reluctance to initiate payment discussions extends the time it takes to collect outstanding balances, making AR more difficult to manage.
- Solution A: Train
- Solution B: Outsource
- Solution C: Adjust responsibilities
The Time-Intensive Nature of AR Management
Managing AR is inherently time-consuming. It requires diligent tracking, consistent follow-up with insurers and patients, and careful account reconciliation and some amount of attention from a practice owner. Practice owners should also be aware that collection of insurance receivables requires different skills than collecting patient receivables, and that it is important to examine each of these separately.
If collections fall behind, it takes even more time and effort to catch up. If accounts continue to age and the reason they are aging is not identified and managed, overdue payments can spiral out of control, making recovery efforts more challenging and costly.
Embezzlement Risks in AR Management
A significant yet often overlooked risk in inattention to receivables management is embezzlement. Employees with access to financial records and billing systems can manipulate transactions, misappropriate funds, or conceal uncollected payments. Some common schemes include:
- Writing off balances incorrectly to hide theft
- Redirecting insurance reimbursements to personal accounts
- Creating fake refunds or adjusting patient accounts to cover missing payments
- Deliberate non-posting of payments so that cash or check payments can be pocketed
Preventing AR-Related Embezzlement
- Enforce strict access controls – Limit who can adjust patient balances, process refunds, or post payments.
- Conduct regular audits – Cross-check reports and patient ledgers to identify discrepancies.
- Segregate duties – Ensure that different employees handle payment posting, adjustments, and deposits.
- Require dual approvals for adjustments and refunds – No single person should be able to modify financial records unchecked.
- Use software alerts – Many practice management systems allow for tracking suspicious activities, such as excessive write-offs.
Solutions for Effective AR Management
Outsource AR Management
One effective solution is outsourcing AR to a specialized dental billing company. By partnering with remote billing professionals, dental practices can ensure experienced experts manage outstanding AR. These professionals handle claim follow-ups and patient payments, allowing the practice to focus on patient care. Regular service intervals, such as bi-weekly or monthly reviews, help ensure AR stays under control. Many remote billers charge based on collections from past-due claims, giving them strong incentives to ensure timely payments.
Implement Regular AR Reporting
A structured process for reviewing AR reports weekly helps identify outstanding payments early. Proactive intervention ensures AR issues are addressed promptly, preventing larger financial problems. Regular reporting also fosters accountability, offering a clear financial overview to aid informed decision-making and improved AR management.
Final Insights
Effective AR management is essential to ensuring healthy cash flow and long-term practice success. By addressing challenges such as inadequate training, high turnover, and complacency and implementing solutions like outsourcing AR management and regular reporting, practices can reduce overdue AR and strengthen financial stability. Additionally, safeguarding financial systems against embezzlement risks ensures transparency and protects practice revenue. Timely, accurate billing enhances patient trust and improves practice efficiency, ultimately contributing to long-term success. This article is the second of three articles on receivables management. In our final article, we will explore understanding true AR vulnerabilities and how to manage hidden financial risks in your Accounts Receivable.
If you have questions about your Accounts Receivable and want to know your risks, contact Prosperident for a complimentary consultation.
Missed Part 1? Read it here: What's NOT in Your Wallet? Hidden AR Risks that Could Cost You Thousands
Amber Weber-Gonzales
Amber began working in the dental field as a Registered Dental Hygienist in 2005. With a background in accounting and her interest in the business side of dentistry, she moved into office management roles and ultimately into dental consulting. Before joining the Prosperident team, Amber discovered embezzlement taking place in one of her clients' offices, bringing to light her aptitude for the kind of investigative and preventative work she now performs for our clients.
Amber was recently the runner-up in the prestigious Spotlight on Speaking competition, featuring dentistry's best-emerging speakers, and has been published in Dentistry Today magazine. In June 2022, Amber was appointed the head of Prosperident's Proactive Services Group, which provides embezzlement prevention services to individual practices, groups, and DSOs.
Alyssa Kimmins
Alyssa started in dentistry in 1999, first as a Certified Dental Assistant, then as a Registered Dental Hygienist; all the while helping to manage the front office. Alyssa further developed her career teaching as an adjunct instructor for the Dental Assisting Program at Phoenix College.
With her deep dental working experience, Alyssa was able to retire from clinical practice and start her own remote dental billing company. In so doing, Alyssa discovered that one of her clients had been embezzled, which set the wheels in motion for Alyssa to join the Prosperident team. She thoroughly enjoys the investigation challenge and understanding how an embezzler will penetrate and steal from a dental practice.
Alyssa holds a BS in Dental Hygiene and a M.Ed. in Career and Technical Education from Northern Arizona University.
Kathy Kirkby
Kathy has spent almost her entire adult life working in dentistry. Starting her career as a Registered Dental Assistant, she has worked chairside knee to knee with periodontists, other specialists, and general practitioners. Kathy completed her Degree in Health Education at Dalhousie University and began sharing her training methods with the dental world. She quickly progressed to office management of group and multi-office practices and then entered the world of consulting. Some of her accomplishments were training and monitoring teams in HR, practice management, practice dynamics, accounting, productivity and ideal scheduling.
Kathy complimented her repertoire working with dental teams and added CPHR – Certified Professional Human Resource to her toolbox. Kathy continues to attend and has presented many professional association meetings including The Golden Girls of Dentistry, Dental Assistants National Conference for Excellence, and has become a vetted member of the Academy of Dental Management Consultants- ADMC. She became Prosperident’s Chief Operating Officer in 2021.
