Do you have Hidden Accounts in the Accounts Receivable?

Depending on the dental software that you use there are ways to assign a designation to a patient and or the account.  It can be a symbol, number or letter.  By assigning this descriptor to an account the AR report can be generated without including the accounts with this descriptor.  As a result, unless the report is printed to include “all” designations or account types you will not be looking at the complete AR report and the true balances owed to the practice.

Some dental practice managers are aware of this and don’t provide the most accurate information to the doctor.  Or in some cases the doctor knows about hidden accounts but doesn’t want to see them on the report.

Other software programs allow you to assign “billing types” to accounts.  The Aging Report can be generated not to include specific billing types.  This means that not all accounts will be listed for you to see.

Some offices never write off accounts and when they run the AR report they don’t want to see what they consider “dead” accounts—or accounts that will never be collected.

Industry standards for bad debt write-offs are 1-2% of gross production a year.  If you are not writing anything off it is because it is hidden.  You can not realize the actual “net” production of your practice on a monthly or annual basis unless you deal with uncollected debt.

Creating proper adjustment codes with your software system will eliminate confusion on how to designate the debt.  Reviewing open accounts monthly to determine if all efforts are being made to collect the unpaid accounts and having open communication with the person in charge of this system is important.   If the accounts are deemed uncollectable they should be assigned to a collection agency or written off as “Bad debt write off” just to keep the AR accurate and current.

To know the true value of your accounts receivable takes proper management of this important system and communication with the Office Manager about the status monthly.