There is always a reason why you aren’t getting paid. And the number one reason is that no invoice has been sent.
Take, for example, the consultant surgeon I was working with recently. The issue as he saw it was that his cash flow seemed to be totally uneven and much less than he expected.
Something causes it to happen.
If you leave invoicing until later its very easy not to invoice at all. It can happen also if you leave invoicing until “tomorrow”.
Many times, I’ve been called in to examine and review the billing process of a private medical practice and discovered an issue with invoicing frequency. So why is “tomorrow” “Friday” or “when I get the chance” the worst possible words for me to hear? Normally they are a big clue as to the reason why the practice is not getting paid as much as it should.
If you want to ensure your practice is paid promptly, the first place to start is raising an invoice.
Once a week is not helpful. In one extreme example, a practice was invoicing at the end of each month. No wonder there was a problem.
The danger in invoicing only on a set day a week is if something happens that day – for example, the consultant needs a clinic booking urgently or a patient needs a letter immediately, then the invoicing gets left behind. And that is normally the cause of the problems.
If invoices are raised daily should something happen to delay that ONE day’s invoicing, it is corrected the very next day.
Let me give you a real-life example.
Wednesday, September 30th a consultant ran an outpatient clinic and saw five patients. Three follow-ups and two initial consultations. £850 worth of consultations. Yet invoices were not produced for this work until Tuesday, October 13th – one day short of two weeks later!
Is it any wonder the consultant was extremely dissatisfied with the practice cash flow?
It didn’t take long for me to identify that on twice previous occasions over the previous few months one entire clinic list had NOT been invoiced (worth £725) and three initial consultations (worth £600) had also not been invoiced. In the case of the initial consultations, insufficient insurance details had been obtained at the point of registration.
In all £1,325 worth of invoicing had been missed.
But before we go any further do NOT blame the medical secretary. She has enough to do. The phone rings. Patients arrive. She has numerous letters to type. She has to book clinics. Theatre slots need to be arranged. That is precisely what she should be doing. She is there to ensure the “front of house” runs smoothly.
The error, if you will, is then expecting her to fit invoicing in around all that or, as was suggested to me, in her “spare time” WHAT SPARE TIME? She hasn’t got any.
In the above example, the solution was obvious. Either get someone in to process all the invoices and the cash receipts or outsource it.
A private medical practice is a business.
It must be managed as a business.
Without putting too fine a point on it, failure to ensure the invoicing and accounts process is not 100% efficient is pretty much guaranteed to lead to the business having cash flow issues.