Delinquent Accounts: How Late is Too Late?

Dentists call me all the time trying to figure out how far back they can pursue a delinquent account. I always cringe, because I usually have to break their hearts. And I’m probably about to break yours too!

The truth is the longer you wait, the harder it is to collect. Even if you turn the account over to collections. Regardless, in just a couple of months, your chances are greatly reduced.

The key is to exercise preventative care over your receivables, which is always less expensive and less traumatic than dealing with the problem of unpaid accounts.

Too Little, Too Late

You wouldn’t recommend the best way to floss to an edentulous patient, would you?? I doubt it, because the practical application isn’t tied to any reliable outcome. Well, the same holds true for your Account Receivables.

So, as Kenny Rogers would say,

“You’ve got to know when to hold 'em and when to fold 'em.”

News flash: the financial profitability of your dental business is just too important to rely on lady luck. And it’s too competitive out there to not act before it’s too late.

Determining Your Statute of Limitations for Delinquent Accounts

Each state has its own legislation on how much time can elapse before a debt is no longer legally allowed to be enforced. Since, I’m not a CPA or Attorney, I cannot give legal advice; however, you can determine how late is too late for pursuing delinquent accounts with a simple Google search or by contacting a local legal professional.

With that being said, a general answer is 2-10 years depending on your state and if it’s an oral or written contract. But to be frank, you have much less time than that.

Time is the enemy regarding profitability analogous to not brushing and flossing is to tooth decay.

Plus, your team doesn’t like to make these collection calls to your patients, either. In fact, there’s a million other things they’d rather do like brush up on their algebra, review insurance codes or learn underwater basket weaving 😉 All jokes aside, they rarely get an appreciable penetration on this list of past due calls despite the best of intentions.

So, my best advice: find a cost-effective and patient-friendly company to augment your efforts early in the process. Vet these providers carefully, to ensure the work won’t be done at the expense of your patient-relationships, putting you in an even worse position.

If you do this now, you don’t have to call me asking about delinquent accounts and I don’t have to break your heart. Moreover, your team can focus their talents on other important tasks to move your vision forward.

More importantly, you have patients that are avoiding recare and not scheduling hygiene, because they owe you money. Preventative care of your receivables will help them take care of their obligation and get them back on the schedule. When that happens, the prognosis is better for everyone involved!

About the Author

Andy Cleveland, “The Accounts Receivable Ninja,” has been in the revenue cycle space for almost 20 years and enjoys specializing in the dental field. He’s a member of The Academy of Dental Management Consultants (ADMC), a creator of The Dental Resource Partners and Practice Support Network dental groups, as well as a speaker and consultant. He has partnered with numerous best-in-class service providers to help dentists optimize their accounts receivable process to ensure maximum profitability. For more tips, advice, or further information about strategies to reduce your Accounts Receivable, please contact Andy Cleveland, The AR Ninja, at arninja@andycleveland.com or 864-517-2233.

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