Get your claws into bad debt

Roger Mendelson, CEO of Prushka Fast Debt Recovery

Every veterinary practice has the same story; an animal is in need of care and the owner expects nothing but the best. But when it comes to payment time, they refuse to pay or contest the fee.

As a caring profession, the needs of the animal will always come first, however as a business this leaves you vulnerable to those who will take advantage of this.

The solution to remaining compassionate while still ensuring you get paid is actually fairly simple, and just involves implementing a clear process which all customers must adhere to.

1. You need a new patient form

Have the owner provide you with their details prior to accepting a new patient. This will ensure you have all the information necessary to assess the credit worthiness of the patient and the best way to do this is through a new patient form.

Knowing a patient’s previous history can be useful when deciding if organising a payment plan, requiring up-front payment or even declining to act for the patient is necessary.

Owner information, including home address, email and phone number, is also useful if an account needs to be followed up.

2. Create a strategy for emergencies

The most basic principle is that the practice will not accept a new patient without the owner completing a new patient form. However, in the veterinary field, emergency situations will inevitably arise which might mean you have to start work immediately.

You should have a clear strategy in place for these situations because while it’s important to care for the animal, it’s also important that you care for your business. Your practice must have defined processes in the event the owner does not have the time to fill in the new patient form. Making sure this process is both clear and adhered to will ensure you’re not left with unresolved situations.

3. Implement stringent trading terms

Trading terms define the payment obligations your clients have to you and should outline the deadlines for debt repayment. In particular, your trading terms must include a clause which provides that, in the event of a client defaulting on their payment, they are liable for all collection costs incurred by your practice.

The new patient form is the best place to incorporate your practice trading terms. By incorporating them into the form, when the new patient signs it, they will be agreeing to abide by your trading terms. This provides you with a strong legal foothold should they refuse to pay.

Implementing these three strategies together will help to secure your cash flow and alleviate the stress of bad debt, getting you and your practice back to what you do best.

This article originally appeared in Vic Vet magazine.

Roger Mendelson is CEO of Prushka Fast Debt Recovery Pty Ltd and principal of Mendelsons National Debt Collection Lawyers. Prushka acts on behalf of 53,000 small to medium size businesses across Australia and operates on a basis of No Recovery, No Charge. Roger is also author of The Ten Mistakes Businesses Make and How to Avoid Them and Business Survival Guide, both published by New Holland Publishers.