Financed Collection
Today’s Date: 2024-10-18
Financed Collection
The “Financed Collection” KPI measures the amount of revenue collected through payment plans or external financing offered to patients. This metric is essential for understanding the financial health and cash flow of the dental office, especially in scenarios where large treatments or procedures are often paid over time rather than upfront.
Calculation of Financed Collection
To calculate the “Financed Collection” KPI, follow these steps:
- Determine Total Financed Revenue: Sum up all the revenues where patients opted for financing options over a specific period. This includes all the payments that are part of payment plans or external financing.
- Identify Discounts or Fees: Consider any discounts given to patients for using financing options or any fees incurred to provide these financing plans.
- Calculate Net Financed Collection: Subtract any fees and discounts from the total financed revenue to get the net amount collected.
In simple math, the formula for “Financed Collection” can be understood as:
- Net Financed Collection = Total Financed Revenue – (Discounts + Fees)
This straightforward equation helps the dental office quickly determine how much money is coming in from financed treatments after accounting for any associated costs or discounts.
Financed Collection
The percentage of collections received from patients who finance their dental treatments.
Understanding and Leveraging Financed Collection
The financial health and operational efficiency of a dental office hinge on several key performance indicators (KPIs), and Financed Collection is one of the most crucial among them. Financed Collection represents the portion of your revenue that comes from patients who use financing options to pay for their dental treatments. It’s a reflection of your success in making dental care accessible and affordable, thereby expanding your patient base and ensuring steady cash flow.
- Accessibility: Offering financing options can significantly increase the accessibility of your services. Dental treatments can be prohibitively expensive for many patients; finance options can make these services attainable for a broader audience.
- Patient Retention: By providing financing, you’re addressing a major barrier to treatment acceptance: cost. Patients who might otherwise delay or forego necessary treatments are more likely to proceed, enhancing retention rates.
- Revenue Assurance: Financed treatments ensure that your office receives payments from reliable finance programs, reducing the risk of bad debt and improving overall revenue assurance.
- Enhanced Cash Flow: Even though treatments are financed, your dental office typically receives payments upfront from financing companies, which can greatly improve your cash flow.
Your Financed Collection is a critical measure of your ability to offer and promote financing options, monitor payment flows, and manage revenue sources effectively.
Financed Collection
Financed Collection refers to the total amount of payments received from financed dental procedures during a specific period. This KPI helps in understanding the financial health and effectiveness of financing options offered to patients.
Improving Financed Collection in Your Dental Office
As a dental office, financed collection plays a crucial role in maintaining cash flow and ensuring that you can continue providing high-quality services to your patients. Enhancing your financed collection process requires strategic actions and an understanding of the factors that influence your collections. Below are some actionable steps to help you improve this KPI:
- Offer Attractive Financing Options: Ensure that the financing plans you offer are diverse and flexible enough to meet the varying financial needs of your patients. Consider partnering with different financing companies to provide a range of options such as interest-free periods, low monthly payments, and extended repayment terms.
- Efficient Communication: Educate your patients about the financing options available during their initial consultation. Make sure they are fully informed about the benefits and terms of each plan. Clear and transparent communication helps in building trust and encourages them to opt for financed procedures.
- Streamline the Application Process: Simplify the financing application process to make it quick and user-friendly. Utilize digital tools and online platforms where patients can easily apply for financing without cumbersome paperwork or lengthy approval times.
- Monitor and Follow-Up: Regularly track the status of financed accounts and follow up with patients on overdue payments. Implementing a structured follow-up process, including reminders and payment plans, can significantly reduce defaults and improve your collections.
- Training Your Staff: Ensure that your team is well-trained in discussing financing options and handling sensitive financial conversations with patients. They should be knowledgeable about the plans offered and skilled in addressing any concerns or questions patients might have.
- Incentivize Payment Compliance: Consider providing small incentives for patients who maintain timely payments or pay off their financing early. This can encourage responsible financial behavior and enhance your collection rate.
Financed Collection = Total Amount Collected from Financed Procedures / Total Amount Financed
How Practice by Numbers Can Help Improve These KPIs
Practice by Numbers offers comprehensive dental business intelligence solutions that can greatly enhance your ability to monitor and improve the Financed Collection KPI. Here’s how:
- Advanced Reporting: Utilize detailed and customizable reports to track financed collections over time. Identify trends and determine the effectiveness of your financing options.
- Automated Follow-Ups: Automate follow-ups on overdue financed collections with reminders and schedules to ensure timely payments from patients.
- Integrated Financial Tools: Access integrated financial tools that streamline the financing application process and track all related transactions effortlessly.
- Staff Training Modules: Enhance your team’s ability to handle financing discussions and manage patient relationships with dedicated training modules.
- Patient Communication: Implement clear and consistent communication strategies with patients about available financing options and their benefits, all within the Practice by Numbers platform.
2024 KPI Statistics for 2024-01-01 to 2024-06-30:
- KPI Name: Financed Collection
- Provider Queryable: True
- Service Code Queryable: False
- Value Type: Dollar
- Goal Direction: Greater
- Start Date: 2024-01-01
- End Date: 2024-06-30
More detailed and per month KPI statistics are available to Practice by Numbers users.