Debtor Management #6: Debtor Management Protocol
DEBTOR MANAGEMENT #6
A STEP-BY-STEP PROVEN DEBT RECOVERY PROGRAMMEp.1
1. THE PSYCHOLOGY OF ALTRUISM IN VETS
2. WHY YOU CAN ONLY LOSE IF YOU OFFER CREDIT
3. THE TRUE COST OF DEBTORS TO YOUR PRACTICE
4. FIVE WORKABLE CREDIT OPTIONS
5. HOW TO STOP ACCRUING DEBTS
6. DEBTOR MANAGEMENT PROTOCOLp.2
DEBTOR MANAGEMENT PROTOCOL
The primary position is that NO ACCOUNTS are offered for any small animal clients (use VetPay, Zip Money, etc.) and only accounts for large animal clients where multiple property visits are made each month and the account is paid on time.
1 Establish clear terms of credit (whether 7, 14, 21 or 30 days).
**NB the longer the cycle the harder it becomes on your business cashflow.
2 If offering credit terms or work on the account, have a basic legal account form to be signed by the client at the commencement of your first engagement with them. This will outline that you are undertaking Veterinary work and services and supply of necessary medications and products and that they agree to pay based on your specific credit terms.
3 Make sure your credit terms are on the invoices for those clients on account (and also list any penalties for late payment) and have them sign the document.p.3
4 All billing and account to be finalized and sent by 2nd working day of each month
5 All accounts to be sent by both email and post if possible.
6 All clients are sent INITIAL REMINDER via email and SMS on the 10th of the month to advise that payment is due at 14 days. SMS reminders are basic and courteous in tone. Even more helpful if you have a link to call the clinic to make payment.
7 At 21 days a text message is sent to clients with outstanding balances reminding them they are now overdue.
8 At 30 days all clients with outstanding 30-day balances receive a phone call PLUS Follow Up Email #1p.4
10. At 45 days clients with an outstanding balance are sent FINAL REMINDER via email and SMS. The message advises that the account fee has been added to the account and that if the account not paid within 14 days we will initiate debt recovery.
11. At 60 days clients receive FINAL PHONE CALL to take payment at the time of call otherwise we will be referring them to our debt collection agency for the recovery of the outstanding amount.
12. Accounts that are not paid at this time are referred for collection or for legal action. Note that often there are amounts outstanding that are simply not commercial to pursue. From my experience, pursuing a couple of these sends a clear message that you are NOT the Vet to go and see and not pay. Expect what you accept.
13. Any payment plans that are entered into can only be approved by Practice Owner (and it should be a NO!)
14 Where payment plans are agreed to, then they should be confirmed with the client in writing with strict terms that in the event that terms are breached, that the outstanding amount becomes immediately due and payable. This document must be signed by the client.p.5