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This podcast covers from START to FINISH How to Acquire a Dental Practice. Michael Dinsio, founder of Next Level Consultants has literally seen hundreds of deals as a banker in the industry & he has personally consulted hundreds of dentists as a Buyers Representative. Michael talks with GUEST SPEAKERS about Due Diligence, Legal, Demographics, and more... He invites experts to the show to help you avoid those headaches and heartbreaks. So start at the TOP w/ Episode 01 and work your way through the transition process. We break it down step by step in a true #UNSCRIPTED and genuine way.
00:02
Oh yeah, here we go practice acquisition. There are pitfalls throughout the entire process.
00:21
If you want to buy a practice, this is how folks. Acquisition Unscripted, the truth when buying and selling a dental practice. And now your host, Michael Dinsio. All right, all right, guys. Welcome back to another episode of Acquisition Unscripted. As you all know, my name is Michael Dinsio.
00:49
one of the founders of Next Level Consultants and today's a special episode because I get to chat with fellow team members at Next Level Consultants, my partner and also one of our amazing coaches. And so today we're gonna discuss all things accounts receivables because, oh my God, I swear to God, like it's one of the hottest topics as we go through the acquisition process and there's a ton of questions around this topic and.
01:17
It just seems to be one of those things that constantly comes up. So we thought let's put an episode up to discuss, uh, accounts receivables, all things accounts receivables. But first let me do a quick introduction. Um, some of you already know, I'll start with Paula Quinn, my partner at next level. Um, she's been with me since the beginning and, she is all things clinical production systems operations.
01:45
owned multiple practices. She's gone through this herself. And so her insight today is going to be valuable. Say hi, Paula. Hi. And then Stephanie, Stephanie Sandoval. She's, she's our front office lead and front office coach. She also heads up at the billing department for next level. And so accounts receivables, obviously, the goal is to have them as small as possible. And that's her goal when she's
02:14
managing our clients AR. And so Stefani, thanks for being on the program. Of course excited. Hi Stefani. Yeah, hi Stefani. So ladies, let's just get right into it. had we had some fun technical difficulties before this episode. So let's get the jitters out. But big, big picture. Let's start just with
02:41
should you even buy the accounts receivables? And as a practice consultants that are with our clients post transaction, there's a lot of stuff that happens right after the close. And I get the question, should we even buy the ARs? And attorneys actually fight with me on this. Sometimes they don't even want us to buy the accounts receivables. And so Paula, I'm going to start with you. Like you bought a practice, you, um,
03:10
had that whole experience. What do you think? Do you think our clients should buy the accounts receivables? What are your thoughts on that? I do think that they should buy them unless it's just completely, completely alarming. I think that it makes the transition so much easier for literally everybody. It's a lot of headache on both sides. I'm doing a lot of work for the seller if you don't buy them and
03:38
Your front office is doing a lot of work for the seller, but we can get into that later. But yes, I absolutely do believe you should buy them. When you bought your practice, Paula, like, um, I don't think you ended up buying the ARS, but that was a negotiation point. If I remember, do you, do you remember the headaches that you had when, when you bought and the seller still wanted their checks on a monthly basis? Like, like why, what are going, sorry to take you.
04:07
down that ugly memory lane, like, did, why was that so like difficult for you? Well, it was, you know, I had to work with them so much longer. I couldn't get them out of my practice, you know, checks coming in that we had to track, keep for them. I mean, it was just, it was just a full-time job for us tracking it for them, or you're letting them completely into your system and then they have control. So,
04:36
Either way, it's just, it's not a fun experience. It's like, I would, you know, and then you're probably going to get into that, but, know, I think you have a formula that you use. think that you should, um, you know, make it so that obviously if you feel that some of it's uncollectible, try to negotiate that out of it. But I think that, um, when you have your team and you working for collecting your money, um, it goes a lot better. Um, so I think just buying them is easier for everybody.
05:06
what a bad way to, you know, introduce your front office to you. Having to be split between maybe even some loyalty with a a seller and then you and you're you know, you're trying to you're trying to manage all of that. So I always like take it back to like, you know, even if the ARs are a little messy. I think about like, why are they messy in the first place? Right?
05:35
And I'm thinking, okay, so the, so the, the, the, the, the biller is, might not be on her game. Maybe she doesn't really get, um, the billing very well. Right. And, um, and so then we, we don't buy the ARs. Let's say that we don't buy the ARs. And then this same biller who isn't really good at doing what they're doing now is responsible for helping you figure out who's money's who.
06:04
So they're already not good. And then you have someone that's already not good. You're asking them to be more organized to figure out if you, the buyer's money, or if it's the seller's money, let's close on certain transactions. you bring up a good point too. mean, what a great way for them to learn maybe what, what they did do wrong, right? As you're, as you're trying to like figure that all that out, you know, trying to collect on those, you know, your
06:30
the ARs for the new buyer or for the buyer. So I don't know. Yeah. Yeah. Yeah. When, when you're, when you take over a client's situation, so let's say I was a buyer rep and I hand them off to you on this. So you're, you've always been a big fan of the client buying the accounts receivables. Yes. I mean, is there, is there anything that you would add to that, that, you know, buying the ARs makes it a lot
06:59
more easy or simple. I think it makes it a lot easier. You know, all you have to do to have a strong over the counter collection process and everybody eats, right? So we're collecting money, balances are getting paid. And in addition, the new work that the providers producing is also getting reimbursed and collected. it just makes it just money, money, money. I
07:26
I think about like that that first day. I remember Paula we had a client and we closed and They they went to closing and Paula you probably remember this when when you were when you bought and The day of closing they sign their life away, right? And it's a big exciting moment But on that bill of not the bill of sale, but the closing sheet it shows where all the money went right and
07:55
He literally had like, I want to say $2,000 in his bank account. He just bought this million dollar practice. Yeah. And he walked out and he looked as white as I look right now, if you're watching on YouTube and I got all these lights and I'm pale because we're in the middle of winter. But he he's like, what did I just effing do? And he was just like that panic moment. And I'm like, dude, I know
08:25
I get it. It makes, it makes sense why you're freaking out, but I promise tomorrow you're going to get a check. And then the next day you'll get a check. And, he just didn't believe me. He probably surprised. I didn't get an ugly story from, from, from him that next night. He got in a fight with his wife or something, but, literally he didn't work on that. Like Wednesday for some reason. And that Wednesday he got like a $7,000 check. So that that's literally
08:52
the process of ARs is the first day that you close, that money's yours. And you don't have to deal with that seller anymore. You don't have to wait 30 days to get your first check because you're just doing production today and you're not gonna get that. You're not gonna start getting your money for 30 days. That's right. That's right. And I'm working capital too. Like when you get funded,
09:19
uh, if you, if you didn't buy accounts receivables and we keep, we keep going down this route, I'll hit that and maybe we can deep dive. We'll probably cover all the bases by the time we get to that last topic. But if you, if you're getting working capital and you don't buy actually, let's just go there. What if you don't buy the AR? So, so what happens is, is you end up getting working capital versus buying the accounts receivables. So here you are, you bought the
09:45
practice, you did not buy the AR. So the AR is every dollar that comes into the practice is the sellers that you didn't do production. Right. So you, you go in the next day and you do a filling. Uh, Stefani could talk more about this, but how long it takes to get that claim. But essentially that check that comes in the next day, that's the sellers and you have to, you have to manage that. Stefani real quick, when you've helped clients go through that.
10:13
process? Like what's that look like for the front office? Like what are some tips or tricks about how to manage that? Yeah, so a lot of offices don't do line item accounting, right? It's one-on-one. You know, we disperse the money on who produced the services. So if you're collecting balances plus over-the-counter payments, you know, you're going to have to be watching those like a hawk because offices simply just put in the payment in their practice management. So here you're collecting money and it's being
10:43
to the seller, right? So you're not even getting reimbursed for your co-payment. You're actually starting a trend of AR, because you're going to to bill the patient that did, you know, what you've done. it's called FIFO. It's first in, first out. The oldest balance is always get paid first. So any money coming into the practice would be allocated to a balance if so it was there. So now you're paying your staff to collect money.
11:11
and it's actually all going to the seller. being aware of balances and co-payments, you know, because otherwise patients are gonna say, I thought I cleared this up, where did this balance come from? And now you look like the bad guy because you are actually billing your patients for balances. Maybe the seller didn't. Yeah. So, yeah. And that is a negotiating point that you could potentially get. Thank you for bringing that up, Stefani, because
11:41
you can actually negotiate that if a patient comes in and you take a co-payment over the counter, you can actually write that into the contract. So that would be a huge tip to potentially build that in so that you get your money. And at the same time, you're asking the patient, hey, by the way, you have a balance due. Today's is X, but your balance due is $300.
12:09
And you can actually build that and that's probably a huge, that's a huge tip, but we do negotiate a percentage. Paula, is that how you did it? think on your practice, remind me, did you have to, did you get the hold back a percentage or no? You mean I didn't buy ARs nor did I sell my ARs. So I was like the opposite of everybody else, but yes, I didn't hold back a percentage, but I charged them a percentage to collect.
12:38
over the counter. Is that what you're asking? Yeah, that's exactly right. And then and then when like, let's say that I owed the seller $100, I would just take that percentage off the money that I would pay them. Yeah, so just so you know, the percentage is not worth the headache that you go through. It just helps a little but it's it's definitely not the tracking of the spreadsheet, the front office not knowing what we're to allocate the money. I mean, it's
13:07
It's pretty basic complaints, right, Paula? You know, you now are dealing with a disgruntled patient who's that you had nothing to do with you. You're like, okay, you know, I'm just the messenger, right? And the auditing, right, because they're gonna say, well, why, why do I have that balance? And you're gonna be like, I don't know. And now you're gonna have to pay your front office to audit the ledger to figure out why do you have a balance?
13:35
it's a horrible way to start as a new owner collecting old money. Yeah, like that. If, you know, I think when you own it, if you take it on, you've everybody feels more comfortable looking at that ledger, right? Because we're collecting it for our our office now for for myself for future things. I think it's more motivating to figure out
14:01
Why do you owe us money? And then you also I think as a new owner get to choose you can be the nice guy and write it off depending on how much it is or you know, there are just certain things that you can do. I think when you own it. Yeah, I love that. And, you know, big picture, like it's always uncomfortable. Kind of like that reminds me of like rework, redo's and stuff like
14:28
There's always these, there's always these situations post-close that like you get to look like the hero or you're the villain and reworks another one of those situations where you can just go ahead and fix it and be the Superman or superwoman. Uh, same with, same with this. If, if, if, if there are outstanding balances, maybe you can use it towards treatment or something, but you know, it's, just interesting when you're the owner versus, um, versus not, but yeah, I mean, I, I can't.
14:58
Look, I can't say this enough that we are, we are totally all pro by, by the accounts receivables just for the mere headache of managing it post-close. And to your lady's point, just to manage that whole process, the industry standard is like charging the, the seller four to 5 % of whatever you click. So collect. So
15:26
If, for example, if there was a hundred thousand in ARs and you collected all of it for the seller and then you wrote that check to the seller, you're only going to skim five percent by industry standard to collect. But the the amount of processing and auditing and all claims tracing and just all the things that what the ladies were saying is it's not even worth it. Is that is that what I'm hearing? It's not even close. Yeah. I mean, I remember when I was doing it, I was tracking
15:55
merchant services going through, you know, the credit card on top of it. Then the virtual credit cards will come in and I'd have to submit, you know, ask for a check. I mean, it was just a full-time job up there, managing somebody else's money. Yeah. And paying my team to do it. Yeah. And, and okay. So that, so let's, let's, let's switch gears here. So when, when I'm looking at a practice to figure out what's healthy and what's not,
16:25
I'm gonna need your lady's help. essentially, like if you're looking at the accounts receivables, now that we've kind of discussed if you should buy or not buy, I'm thinking about, are there scenarios where you just actually shouldn't buy because it's dangerous and it's risky, right? So if it's a shit show, let's define what the accounts receivables looks like and what's healthy. So Stefani, in your opinion, like,
16:52
If you're looking at counts receivables and you're thinking about buying them, what's healthy look like? So I think healthy looks like about an average of month production, right? Where if we're doing estimates correctly, we're collecting over the counter, you know, it really should be minimal. So I would say a healthy AR, a patient AR, right? There's two different types of AR, right? Where the liability is. So I would say over 30 days,
17:21
no more than one month of production. I think a red flag is where you see buckets in the 90, right? They've gone 90 days without paying your chances of collecting that are going to be kind of slim to none. And I see your wheels turning, Paula. Hold that because I don't want you to lose that. Stefani, just to go on record, can you get claims paid after 90 days? What's the official answer on that?
17:52
Absolutely. mean, if we can, the only reason insurance companies will reject a submission at that point is for timely filing. And that's usually about a year, right? We got 365 days, but with the same practice management software, you just have to show proof of the timely filing and that an attempt was made and that's good enough. Send it to the insurance company saying, hey, we originally submitted this.
18:17
Didn't get processed for whatever reason. Here's the documentation you needed. So when you say, when you say timely, what, did you just say? That was a fancy timely, timely filing insurance companies cap on how long you have to submit for reimbursement on, on a claim. So some, you know, some federal plans are about nineties, but overall it's about a year. have a year to submit the claim. Does that include Delta? Delta is about a year. Oh, wow. Okay. Yeah. So if you submit, so
18:46
How quickly, real quick, like if you submitted, Stefani, is it 90 days as long as you submit before 90 days the claim, then you should be good in general or if they haven't- Yeah, well it's 365, but when you're ready to pull up your sleeves and start tackling it, you're gonna start at your 90 day bucket, right? You don't know how old those claims are that are sitting in there. So you're gonna wanna start with your oldest claims and work your way forward.
19:14
And that's where the claim tracing comes in, but that's going to be your best chance to avoid having to write off the claim entirely because the office failed to submit on time. And you as the buyer had just bought that AR. That's the last thing you want. Yeah. Paula, sorry. Do you still got that thought? Well, I have two, but I would say you just brought up a point with Stephanie and I want her to clarify this. Stephanie, would you say when you get in and you do AR cleanup,
19:42
you know, those over 60 day, those over 90 day, how much of it would you say is office error versus we just don't have the information, right? So there's non collectible because, you know, maybe we did that crown prep and never took a, a, a pre-op, right? So we're, could be screwed, right? For lack of better words, but how much of it would you say is
20:07
actually pretty collectible as long as the timely, you know, I guess I want to give doctors hope that if, know, they've got that 30 to 60 and that 60 to 90. And I think Michael usually negotiates the over 90 for them not to have to pay for it. But I, that was my second part of the question for him. But let's just say that they, had this and, let's say you have a hundred claims. What percentage of that do you think is collectible? I would say.
20:37
Be careful. Be careful here. Okay. I'm just saying, obviously you get a, you get a, you get an office where if their protocol from beginning to end, like, like I said, taking appropriate X-rays, you know, cause even clinical notes can sometimes be added to amendments to get, get the narratives that we need. I'm talking like a lot of it's just,
21:04
wrong social security number, wrong this, wrong address. I I hear it every day from her when she's billing. Am I right, Savani, or no? Yeah, I mean, it's like no claim on file, and it's as simple as just fixing the address and getting it paid. I mean, I think that's usually where we make the biggest impact when we do cleanup for our providers is in those 90-day buckets. But a lot of the time is that they're not equipped to appeal claims, right? Maybe they needed additional information.
21:30
They are just so busy. They put it to the side and then it gets lost forever. So I think as a new owner, stuff to get it because it just benefits you as well. Like sit down, help them figure out the appeal. I don't have many times I call Paul. I'm like, show me where the bone loss is. need to fight the bone loss. It's a 30 year old patient, but you know, you're not going to be approaching your dentist who you've worked for for years to say like, can you explain this to me? How I can appeal it, right? They're going to be like, that's your job.
22:00
Okay. So it really does benefit them, but I would say 60 % of the time it's yours. It's collectible. That's, that's interesting. Cause, uh, you know, as, as a buyer's rep, um, I'm always thinking like, okay, how risky is buying this AR, which kind of leads me to my, to my full circle here of, of, know, what is the value of the actual AR? And this is a tricky one, right? Because there's a few things going on.
22:30
Number one, accounts receivables is always in terms of gross production. That's tricky, tricky number one. So there's an adjustment factor that's usually not baked into the ARs. So that's number one. Number two, credits. We could talk actually about credits here if you guys have time, but there's always credits. then there's, then folks, if you guys read or are listening to podcasts, things like this,
22:58
you're going to hear about these percentages. So there's buckets, you know, 30 days, it's worth more. I'm sorry. Current to 30 is it's worth more than 30 to 60. It's worth a little less and so on. So there's this like this tier of the value. But usually most the brokers and professionals out there will agree that anything less or sorry, older than 90 is worth zero dollars. Nothing. So here's Stephanie saying a little gift is
23:28
that you could potentially get some of that money, but that's a dangerous statement a little bit because we don't know when we're looking at accounts receivables, how many are less than a year or so, so be careful. There's probably no, and we also, Michael don't know their documentation, right? If they're, if they're missing documentation, whether it be an X-ray and different things like that, it's sometimes it's just completely out of our control. So you know, when you see the over 90, you don't know.
23:58
what the office protocol is and how just how dangerous that is. So I do think it's safe that you're not paying for that because it is a lot to go after. It's, Savani is probably saying like, it's those appeals. It's that, you know, possibly that missing information that we can never get back and you just don't know. So I think it's fair to still evaluate it as zero, but I do think that there is some hope that you might, because
24:28
Even some of that 60 to 90, might not be able to collect on. And that's also a slippery slope. You might not even be able to collect on that 30 to 60. Like if things are missing, if it's that big of a shit show, you know, the whole AR itself is dangerous, but you can sort of see the history of the practice and things like that. yeah, guess the hope is that, or the, yeah, the hope is that, you know, some of that is collectible and you might get a little bonus out of it.
24:57
You know, yeah. I, you know, at the end of the day, I can't think of too many clients that where we bought the A.R.s and it was just, you know, a loss. think I think the big, big picture here, ladies, correct me if I'm wrong, is it's not about like making money. Like you got to you got to think about the practice is worth X. You know, it's valued in a way and
25:27
And we've talked about that and, um, there's methodology and all that stuff. So that's an asset that you sell, but the other asset in the practice is the AR that's money. I might as well think of it as a checking account that you're just not, that's not funded yet. Right. So that's an asset and how you value that asset is, is dependent on what we're talking about today. But the big picture is that you're not trying to beat the seller up to fig to try to win that extra
25:58
10, 20 % discount from the ARs. It's really about the smoothness of the transition. Any tips, ladies, like what are some things, you guys could probably go off on this. What are some tips and tricks about how to make sure that the day you close, that's our money, we get it. It doesn't go to the seller.
26:25
Stefani, I'm actually gonna throw that to you. Is there a way to make sure that the buyer gets that check after they just paid for it at close? Yeah, I think a few things. Definitely we wanna stop those EFT payments. One of the biggest headaches is having to talk to the seller, get your money because you bought the AR. So if an insurance is paying and they're paying the seller based on the...
26:51
you know, a direct deposit, right? You're gonna have to start tracking that. you know, whether it's when you put your LOI three weeks to get the request, you know, request that the seller put the notice in and check. saying thing though, Stefani, you want, know, we've done this before and what do you think is better is just changing the bank account and so that the EFTs can just continue to flow and go into.
27:19
the seller's account or do you think stopping those EFTs like what do you think? Just stopping them in general because what's going to happen is you're credentialing now and you're going to be re-enrolling in EFTs anyways. So I think just having those physical payments, not all of the insurance companies will allow you to switch, you know, bank information if it's not matching the initial setup, you know, that you do get some roadblocks, but majority of the time, yes, you don't. But I do just like having checks.
27:48
let it all just start flowing back into the practice until you reestablish a form of payment via direct deposit. Keep thinking about maybe tips on this, but EFT for, let's dummy this down. Team, welcome to Next Level's inner circle here. We do this quite often where we're just balancing ideas and trying to figure out the best way to do things.
28:18
EFT is talking shop here, electronic transfer of funds, EFTs and the insurance. EFT everybody. It's EFT, electric fund transfer. What did I just say? Yeah, ETF. Maybe that's a branch of the government that I just quoted. I don't know. But essentially, insurance companies wiring money to the seller's account versus getting old fashioned checks. And then Paula,
28:47
You just touched on when they don't do that check or wires, they give you a debit card and I think you taught me that one. Yeah. So what's that all about? It's a, it's a virtual credit card that has the payment on it and they want you to run it through your merchant service terminal. And it's, there's a fee attached cause obviously you're running it through your merchant service terminal.
29:16
Um, and now, you know, Stephanie's opened my eyes. I may have been doing this. Stephanie will have to let me know, but I, maybe it didn't exist at the time, but they also, you know, now there's a fee for EFTs. can say the acronym now and the virtual credit cards. So even being a new owner, sometimes just like you said, Michael, having that check number one, not to, not to add on any additional fees. Um, you know, and.
29:45
Just so you can touch it, feel it, keep track of it there for a while is actually really nice because most dentists, no offense dentist, you know, learning the business side of the practice is a whole new world. And so reconciling your bank, you know, against the checks you get in the virtual, the EFTs is a whole other world because you have to go check those. And if you're not well versed in that.
30:13
or your front office or biller is not, that is like, again, another world. So I think Stefani is right, getting that physical check for a minute, having some control and then deciding which one you do want to enroll in. And then I'll throw the ball to Stefani because now some of them are even charging for that. it may not be, it may or may not be something you ever want to do. It depends on where you are in your career and what
30:39
how much your convenience is worth, right? In my eyes. Some dentists are just like, do it, I don't want to have to mess with it. And then some are like, yeah, I'm not paying that extra blah, blah per month. Stefani, you want to? Yeah. So, you know, some insurance companies, if you hold a direct contract with, they're not, they're going to waive the fee, right? They're going to say there's no charge for us to deposit the money. Delta, will tell you, doesn't charge. But
31:05
with these other insurance companies, because lease networking is such a big thing in the insurance world now, they need to find a third party who will distribute all of these payments. And so how they try to sell it to the practices, like you'll get your money quicker. But what they don't tell you is, yeah, but we're going to take 2 and 1 half percent of whatever that claim is to deposit it. And then if you're like, no, no, no, I'm going to pass on that, then they try to get even more clever and try to give you the virtual credit card.
31:34
Which is insane because you're still paying a merchant service fee and you're manually entering it. So it's at a higher percentage. Now granted, they're going to tell you to negotiate with your merchant service provider to try to get it lower. You know, this is the best way. But you know, when you've got all of this money just going into your account at different days, different times, it's really hard to do your reconciliations. know, to Paula, it's those checks.
32:02
here's all my insurance checks. It's going to match. You're now a new business owner. This is all going to be new for you. Yeah, I, I, I, I love this ideal. I love that. Stephanie. So essentially what guys just to back up a hot minute. So getting the paper checks is a great little exercise for you, although it's old school and you might think that's going back to 1980. It's not like
32:31
Having those checks, it creates a system so that you can make sure that everything's clean and you're posting correctly and everything's working right as a new owner. That's actually pretty, pretty beneficial. thing that goes right is not going into the seller's account. Yes, that's right. That's the biggest thing. That's where we started with this. Paula, on a final note here, like we literally could talk about this topic for a long time, but we don't, we don't have the attention of
33:00
of a long time. So really quick though, when you're thinking kind of around those systems upfront and collecting, like I find that in general, you know, post close, like having tight systems at the front is really important, specifically around collections and often times our buyers don't have a good grasp on things. you
33:28
Can you think of some simple tricks if you buy or if you don't buy the ARs, really having some daily reporting to show you what's happened? And I know you had a really tight system around what's been collected. Can you just give like final tips around getting that money? Cause it's so important post-close. Okay, you're gonna hate me, but I'm gonna back it up a couple of times.
33:56
I won't go too deep because this will send Stephanie on a whole other level. But I learned this from her. And really, it all starts with that insurance verification and breakdown. If we are not getting the patient's benefits, and then we're not getting them entered correctly, it's impossible to figure out what a patient's copay is. Presenting that treatment plan other than sending in a predetermination.
34:23
is almost impossible, or it's not presented in probably the most elegant manner with a bunch of chicken scratch, you know, because we're trying to figure it out, that the preparedness and stuff isn't always there. So I suggest, you know, first having a strong verification benefit breakdown, learning to actually enter into your practice management software properly so that when you print out your treatment plan, you know, your, you know, your 12 year old daughter could print it out and it would be accurate. That's the most
34:52
important thing because wh out a copay on the fly, i difficult because we forget we have the wrong fee schedule just so much that can do tha you present to a patient their copay is 50 bucks, it is, you know, then we collecting that money. chart. If there is a prio ahead and knowing where th
35:21
and making sure we're collecting that over the counter. It avoids statements, it avoids upsetting patients. I mean, they get upset because they owe you money, but they owe you money. But you're going to be the first they get upset at if you're not accurate. And then I think, know, auditing to collect the proper amount, going ahead and collecting that, just that's the best system because then you avoid statements. I know that that's never going to happen.
35:49
But if you do have to send out a statement, it's five or $10 rather than 300 because we didn't get out of buildup or something like that on. So I think that's number one is just having that front office know exactly what to do from every patient all day long. And the only way to do that is how the systems prior to the systems and then pay attention to the systems on the day of.
36:17
Yeah, I love it so much. love it so much. System, system, systems. Yeah, well, you taught me. And then I think just with the doctor and the front office team is running those end of day reports and really auditing that we have every procedure accounted for, you know, that we posted every payment that we collected over the counter. And there's some checks and balances there that we teach offices to do that. But it's really that end of day reporting. then
36:47
But if the front end is done right, there's hardly anything to do in the middle and on the back end, besides making sure all those procedures get in for the day. Um, then physically collecting the money. that's right. I just think like for the acquisition folks, they had no control of the systems walking into that transaction. So, you're, you're so spot on with how all of that to that.
37:15
point is like the last leg that all this stuff had to had to be done correctly to get to that point. My brain goes to I the go. Yeah, go. It's looking at the adjustments, right? Yes. If there's a lot of adjustments, there's something wrong going on. That's right. And this isn't Yeah, look, this isn't accounts receivables. You know, acquisition flavor here.
37:44
But guys, like I always say that when you're looking at practices where there's smoke, there's fire. And when we're looking at transitions, it's not necessarily like a red, red flag. Like we just looked at one in Seattle and it was a hot mess. It was a hot mess. And it doesn't mean that the practice is you shouldn't buy it. It just means that the systems on the systems on the systems that follow was talking about.
38:13
earlier, which which Stephanie absolutely loves because that's her whole world. This is what she trains our clients on and she trains our front office people on. But like, if all of that's not good, then then it's hard to collect the money up up front and hence why you end up getting huge balances on ARs. And then when you're looking at the practice to purchase, you're like, Oh, my God, should I buy this or not? And so
38:42
big picture, we can help you figure out what that value is, are what possible systems are broken. But then there's also a lot of the we're not sure what exactly is broken. We got to get in and start snooping around. Could be fees. Fee schedules aren't being attached. Could be a hundred different things. And we had a credentialing podcast episode with Stefani and, you know, all of that kind of
39:10
all falls into the same category of ARs and what it all looks like. Ladies, any last minute things that you wanted to really get off your chest before we shut down the accounts receivables discussion that you all can think about?
39:27
going to throw it out there. just, you know, we talk about in team meetings, we take every challenge and we say good, right? So the good news is if you buy an office and it's got some AR problems, it's easily identified as where we got to start, right? We broken system. So it's giving you clear directions of getting your feet wet and now we're going to get to work. So I would take that as a nice directive of where to start.
39:53
That's that's great, because if you if you were in a heated battle with an acquisition on purchase price, I know I am totally contradicting myself here by saying it's not about making money. But if the A.R.s are a total shit show, shit show, we can we can actually collect more of that money. So maybe you could make a little money. So, yes, it is an opportunity. Anything else on that, Paula, like risks or concerns or values and all of the.
40:20
the acquisitions that you are a part have been a part of? Well, I would just say the risks are if there is an air issue, the you know, that just has to be that your number one thing, right? You can't like we want you to go in and work, right? We don't want you to make a lot of changes. We want you to enjoy yourself and be a practice owner and obviously trust your new found team. However, if there is an issue, it's almost like now I'm going to contradict what I just said.
40:49
it's important from day one or day seven, whatever, know, is to do identify what's been going on. How did it happen? So that you can, if there's a problem, we can fix it, right? There are times when doctors are just, oh, collect it later. mean, sometimes the seller might've been the issue, right? Just because they've had that practice for so many years, everybody's their friend, small community, whatever, but
41:19
It's really identifying it so that you can tap into those ones that might be getting close to timely filing. You can, you know, correct those problems quickly. And if it's something in the system, which likely is you can fix that so that your AR doesn't keep growing. So I think it's really important that, you know, if the buckets don't match, if it feels a little risky,
41:44
just getting in there immediately and fixing what's broke so that you can not only collect on all of that, but then obviously collect the money that you're going to be producing, making. So that would be. I love that, Paula. That's so good. think big, big picture. Too many people say don't change anything. Don't change anything. That's actually really bad advice.
42:13
We as consultants try to roll that back a little bit because your attorney will say it, the broker will say it, the seller will say it, buyer reps will say it, even hell, I'll even say it. But if it's foundational, you have to fucking fix it. Sorry for the F-bomb. have to. I wanted to be the first one. I'm like, we're 40 minutes in and nobody's let that F-bomb go. This is impressive.
42:40
But it's such a key point though that like there are things that you do have to fix that is not okay to not collect money at the time of service. It's not okay not having an accurate treatment plan. Like that's foundational. You have to fix foundation. thanks for giving that, Paula. Folks, thanks for joining. We actually dumped a lot of stuff.
43:07
maybe watch this episode a couple more times and take notes. I took away the whole 90 day bucket less than one year. I'm going to start asking for that how many patients and balances that are that are claims are outstanding that are less than a year and 90 to a year. That's awesome because there's some value there. I don't ask that. So good stuff, folks. I hope you got a lot out of it. And now you also know my team. You've you've seen him another
43:37
Podcasts and today it was just a spitballing. So again, welcome to the inner circle here. This is what we do and If there's anything that we could ever do for you, please reach out. We're gonna have contact information below in the descriptions and You know big big picture. We're here for you. So thanks again for listening and being a part of the program I will do a soft soft soft soft
44:05
heads up that's Stefani and Paula are planning a podcast. I don't know when that release is going to be coming soon. Because we then it'll be accountable. talk about accountability as consultants all the time. Definitely. You guys are planning a practice management, dental practice podcast that's going to be under the family. so
44:32
Stay tuned on Dental Unscripted. You'll see when that gets published. And so I'm super excited for that. So be waiting for Paula and Stefani to break out on this podcast world. without further ado, thank you again. Like, subscribe and do all the things, but appreciate you guys being a part of the program today. Paula, thanks for having us. Of course. All right. That's a wrap. Talk to you guys soon.
44:58
Tune in next time for another truth-filled episode of Acquisition Unscripted. We want to hear from you. Interact with your host Michael Dinsio. Follow us on Facebook, Instagram, and YouTube. Comment and subscribe.