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Client debt – still with us in 2017
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One of the biggest reasons for the practice's failure to obtain payment is not having enough details to track down the debtor effectively.

Good debt management can begin with all clients who register with the practice 

Underlying the issue of client debt in veterinary practice is the practice mindset. We have to have compassion, but where do we draw the line when it comes to payment for the work we carry out?

Veterinary surgeons have a clinical role in compliance and a role in compassion, but there is also the role of the client and their responsibility to take into account. We all know – probably by heart – the sorts of excuses clients make for not paying their bills.

There are lots of reasons why bills are not paid, but one of the biggest reasons for the practice's failure to obtain payment is not having enough details to track down the debtor effectively.

Practice debt is a result of a number of issues:

  •     that we offer credit in the first place (If we offer credit then we have to tolerate debt)
  •     that we are often poor at the registration process and client identification
  •     that we do not act quickly enough to collect the debt
Practices need to know what their debtor days are – if you do not know what they are, there is no way of reducing them. What is tolerated by the practice will encourage the client debtor.

There are four main types of debt:
  •     outstanding debt from insured animals – this is acceptable and temporary debt that will be collected
  •     outstanding debt from non-insured animals – this is not acceptable
  •     legitimate <30-day accounts
  •     unpaid >30-day accounts
Debt costs money, unpaid bills are money that you are unable to use and in some cases, this is money that you are paying interest on if you have a bank overdraft.

Good debt management can begin with all clients who register with the practice understanding that the default is no credit. If the practice wishes to give credit to some of its clients then it needs to have a sound credit control policy which should contain requirements such as:
  •     obtain the full identity of the client
  •     check they are creditworthy (if using an outside company for this the practice will need to have credit control registration)
  •     list conditions and terms of business
  •     solve queries swiftly
  •     prompt account collection
  •     provision of final credit collection

Any credit agreed should be confirmed and agreed by both parties and signed by the client before treatment.

Debt is an issue for all team members not just administration and debt control. The practice needs a clear debt management policy of which all staff are aware, which clearly explains when debt should be chased, who is responsible for doing this, how they do it and for how long. 

There should also be a consultation protocol for veterinary surgeons to make sure that they keep clients informed about treatment costs and accumulated debt.

The nature of our business means that some debt is almost inevitable but if we can reduce unnecessary debt due to our own shortcomings other outstanding monies may be easier to absorb.

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