How To Review Your Dental Practice Write-Offs
In an ideal world, all of your patients and insurance partners would pay their bills on time and in full. But we don’t live in an ideal world, which means that it’s important for you to understand your dental practice’s write-offs. And in this quick guide from Tooth & Coin, we’ll take a look at the basics about dental practice write-offs, what they mean, and how you can review them and better understand the health of your business.
What Are Dental Practice Write-Offs?
A dental practice write-off happens when a customer doesn’t pay their bill or doesn’t pay the full amount of their bill. If you’re not successful at recovering the full amount owed, you will move the debt from your accounts receivable to an unpaid receivables account.
Write-offs are not ideal, of course, but they are common. Whether it’s because you can’t get a customer to pay, or a dental insurance company refuses to pay the full amount billed, there are situations where dental practice write-offs are unavoidable.
How Can I Calculate My Write-Offs?
If you’re not already tracking dental practice write-offs, the simplest way to calculate your write-off percentage is by taking a look at your practice’s total gross charges for a certain period of time, such as a month or even a full year.
Then, you can look at the actual amount of money that was paid to your practice during this period. By looking at this information, you can calculate your write-off percentage. For example, if your practice bills $1 million in a year, but your practice is only paid $900,000, you have a 10% write-off percentage.
Simple Tips For Reducing Dental Practice Write-Offs
A write-off percentage of around 10% to 12% is pretty normal for dental practices. But if your practice has a significantly higher write-off percentage, you may want to take steps to try and reduce write-offs, such as:
- Offer discounts when patients pay in advance – When patients pay right after treatment, you can offer a 5% or 10% discount. This may help encourage them to pay their bill in full right away, reducing the risk of a write-off.
- Send payment reminders to patients – Sending regular payment reminders can help patients pay on time and prevent write-offs, especially if you allow online payments for dental bills.
- Renegotiate contracts with insurance carriers – If you’re not being properly compensated for your costs by your insurance partners, you may want to consider hiring a lawyer and working to renegotiate your insurance contracts to more accurately reflect your costs.
- Work with a dental accountant – Calculating write-offs can be confusing, especially if you work with dental insurance companies, allow patients to pay without insurance, and offer other benefits like in-house dental savings plans. Working with an accountant from a company like Tooth & Coin helps you track your write-offs more effectively, allowing you to manage your practice more efficiently.
Get Valuable Insights Into Your Practice’s Performance – Work With Tooth & Coin!
Along with write-offs, Tooth & Coin can help you calculate and monitor a wide variety of metrics that help you track the health and performance of your dental practice. We offer full-service dental accounting and profit advisory services to practices all throughout the United States.
With our help, it’s easy to understand how your business is doing, and gain valuable insights that can help you improve profitability, boost revenue, and continue to thrive in your practice. Give us a call at (877) 265-2121 or schedule an online consultation with Jonathan VanHorn today to learn more about what we do.