How to improve your Dental practice’s cash flow?

A sustained and improved cash flow is the lifeline of any successful dental practice. Only those dental practices can survive in the complex healthcare industry that are familiar with all significant ways to manage their cash flow. Otherwise, there is an increased probability that they will suffer a huge loss of profits. 

Here are some top useful strategies that are highly useful in managing the dental practice’s cash flow. 

1.Reduce your overhead costs

If you want the financial stability of your dental practice, the first thing that you should do is to lower your overhead costs. Do not spend your money on less important tasks. Only invest in those strategies that help in overcoming the unexpected cash flow issues and improve your financial growth. Lower overhead costs can prevent your practice from a shortage of revenue. 

2. Monitoring of Accounts Receivable

If you want to improve the cash flow of your dental practice, then regularly analyze your accounts receivable. Collect the outstanding payments from patients and insurance networks in a rapid manner. In addition, implement the highly significant strategies for efficient billing and accounts receivable management. In addition, regular follow-ups are necessary to minimize the risk of errors. The faster the collection of payments, the more continuous the cash flow.

3. Develop a comprehensive budget

The main thing that you should be concerned with is your financial management. You can make a clear budget that involves the explanation of all essential aspects, which include:

• Salaries
• Rent
• Supplies
• Training charges 
• Equipment buying and maintenance 
• Marketing 

If you have detailed knowledge regarding your cash inflow and outflow, then you can better manage your finances and make those decisions that help in improving the cash flow of your dental practice. 

4. Developing diverse revenue sources 

If your practice is linked with multiple revenue streams, you will get a significant amount of revenue. You can make your dental practice more efficient by offering specialized services like cosmetic dentistry procedures, Invisalign treatments, as well as sleep apnea mouthpieces. So with the help of these diverse revenue streams, you can obtain the financial stability of your dental practice. 

5. Making a strong patient financial policy 

A robust patient financial policy also plays a vital role in generating the continuous cash flow of your dental practice. Regularly analyze it and make positive alterations in it. The patient’s financial policy should clearly explain the bill payment deadlines, payment options, payment expectations, outcomes of non-payment, and other financing options. Moreover, it should also include the detailed information responsibilities of patients as well as the procedures of insurance billing. 

6. Analysis of Key Performance Indicators 

Don’t forget to regularly track your key performance indicators, which include expenses, revenue, AR turnover, and collections. 

7. Control on operating expenses

If your practice has decreased cash outflow, then there are increased chances that you will have improved cash flow for your practice. Set some parameters to operate your expenses. Prevent the spending of funds on less important tasks and save your funds to use in difficult times.

8. More efficient billing strategies 

With the help of more streamlined and efficient billing operations, dental practices can generate a significant amount of revenue. As it favors fewer outstanding collections, optimization in the payment collection process. This ultimately prevents the delay in reimbursements. 

9. Availability of emergency funds

Expenses of dental practices which unexpectedly appear also exert a negative impact on the cash flow. Therefore, practices should have emergency funds which provide assistance during the time of financial crisis and also maintain the flow of revenue.

10. Identifying the cash flow issues early 

If you do not want your practice to suffer from cash flow issues, then identify them at an early stage. The following are the major early signs that can help you identify that your practice’s revenue cycle is not optimized:

• Rise in the aging of AR reports. 
• Continuous delay in payments 
• Issue in meeting payroll obligations
• Decreased patient satisfaction 
• Reduction in revenue
• Optimization of staff scheduling

Accurate scheduling of staff is also crucial for maintaining the cash flow as it favours improved patient satisfaction, decreasing labor cost and turnover, and efficient streamlining of operations, which altogether boost the cash flow of the practice.

11. Negotiation with suppliers 

If you negotiate with suppliers regarding the payments, then you can better manage your practice’s financial aspects. You can request the suppliers to extend the period in which payments are due, discounts for early payments, as well as prevent taking out loans. All these strategies can help your practice in getting rid of extra financial stress and managing the cash flow. 

12. Outsource to professional billing companies

Outsourcing to a professional dental billing company also helps in cash flow management of dental practices. It offers multiple benefits, which include a reduction in operational cost, increased accuracy and precision, and enhanced revenue cycle management.

13. Consider a financial forecast

Your financial projections are your practice companion in improving cash flow. If you keep a regular estimate of your cash inflow and outflow then you can make useful decisions to enhance your practice’s cash flow. For example, you can make some productive investments, make early strategies to prevent the revenue shortages and manage the debts etc.

14. Follow-up on unscheduled treatment plans 

Another way to improve the cash flow of a dental practice is to make a regular and controlled follow-up to identify the patients who have the plan of treatment but have not scheduled the appointments.

15. Bookkeeping 

Accurate and on-time bookkeeping also helps in efficient revenue management. This involves keeping record of all financial transactions of the practice which helps in getting a detailed insight into the financial status of practice, identification of latest and evolving trends. Moreover, it also assists in making well-informed decisions for managing the cash flow. 

16. Increased insurance reimbursements

Experts should stay updated with the latest trends, billing and coding requirements, as well as certain alterations in insurance policies. If the dental billing process is streamlined with diminished errors in billing, coding, and documentation, then your practice will always stay ahead in getting the payments for provided services. 

17. Inventory management maintenance

Maintaining inventory management at optimal levels is also beneficial in improving the cash flow of dental practices. This involves the elevation in inventory turnover, decreasing the holding cost, and the one that is specifically linked with understocking and overstocking. In addition, regularly analyze the inventory levels to better manage and improve the cash flow.

18. Patient financing options

Make an association with financing companies to offer patient financing options. This will provide ease to patients to manage their expenses or afford treatments. In addition, your practice will also gain financial stability by getting the payments on time. 

19. Expanding office hours 

If your practice has more working office hours, then it will lead to more patient visits. The more availability of patients, the more revenue for the practice. 

20. Show your investment in training and technology. 

The efficiency and productivity of each practice are directly linked to the expertise of the  team. You can train your billing team to increase productivity. Likewise, your investment in highly advanced technology solutions will reap positive outcomes in the form of reduced administrative load, minimized errors, improved patient communication and ultimately the continuous and enhanced cash flow. 

Enhance your cash flow with MedStar Billing Services

If you are concerned about maximizing the cash flow of your dental practice, then reach out to our dental billing experts. MedStar Billing Services is a trusted dental billing company where you can find the best dental billing solutions for your dental practice. We are your strategic partner in dental billing. We have a team of dental billing experts who have a proven record in managing the billing of dental practices. They not only optimize the billing process and revenue cycle management but also identify the revenue loopholes and hidden growth areas. What you have to do is simply share your billing concerns with our experts and find the best tailored solutions for your practice.

Final Remarks 

Each dental practitioner or provider strives to maintain the cash flow of the practice. Financial stability is essential to thrive in the healthcare industry. There are a range of strategies that can significantly manage the cash flow of a dental practice, such as creating a budget, monitoring accounts receivable, decreasing the overhead cost, controlling operating expenses, analyzing the key performance indicators, maximizing insurance reimbursements, etc. By the accurate and timely implementation of these strategies, you can have managed control over your practice finances.