real life finances

Re: real life finances

Gillian Mostyn — Sat, 23 Feb 2013 07:54:06 GMT

[quote user="Anthony Todd"]If the receptionist primes the client and the vet asks for the fee the only bad debts will be the ones who never intended to pay anyway.[/quote]

Going back to the OP, aren't these the kind of people we are talking about?

Re: real life finances

Anthony Todd — Sat, 23 Feb 2013 00:53:29 GMT

[quote user="Mark Holmes"] I think you need to dissect bad debt figures [/quote]

If you do, you'll find is 'cos the vet doesn't even ask for it, and that included me....

If the receptionist primes the client and the vet asks for the fee the only bad debts will be the ones who never intended to pay anyway.

Payers will pay whether it's a deposit or the whole fee but you've got to ask, then insist.

And debtors are one book you can't judge by its cover too.....

Re: real life finances

Mark Holmes — Sat, 23 Feb 2013 00:45:10 GMT

[quote user="Hanna Bennett"]

[quote user="Mark Holmes"][quote user="Hanna Bennett"]

so we write off £2000 bad debt every six months with the best intentions and deposits taken etc etc, if it was only £1000 in a year i might be more amenable to running these debts up. nice that those of you who can do the free ops - if i do an op for free round here everyone and his mate will expect it. the chap did not want a large bill and a dead dog - did we make the right decision - i still don't know, though interestingly my (employed) vet has no doubt and he spoke to the owner so suuspect owners attitude was lacking somewhat in interest.

[/quote] Do you ever look at how much is made in a year from situations where you take a chance and it pays off? Only interested because if you don't you could decide to focus on reducing bad debt and put in place procedures that cost you more in lost work which would have ultimately been paid. It's easy to look at the debt (which is obvious) whilst losing the payoff in the everyday finances.

[/quote]

not sure i get where you are coming from - the £2000 is situations where we have already taken a chance and it hasn't paid off - if i took more chances i would write off more bad debt surely? we are not short of work so not turning down work that might not pay in favour of nothing, but rather ensuring that our paying clients get the service they pay for.

[/quote] Ok I'll explain better. Assume you over the course of the year you take a chance on £10000 of work. Assume for argument that this work you knew up front was a debt gamble. End of the year you write off £2000. To avoid bad debt you stop taking gambles by turning down such cases you are now £8000 worse off. Fixed costs don't count as they don't change. Variable costs are typically pretty small. End of year profit £8000 (less variable costs) lower as a consequence of a decision to save money in bad debt. Now you can argue about the assumption that only 20% turns into bad debt that is true but if the gambles that pay are not considered you could lose much more than you gain. There are other things to consider such as how much effort is involved in recovering the £8000 but for the sake of illustration I have put them aside for now

[/quote]

but we are not a bank so cannot charge interest - my creditors want paying at time of billing so waiting for money knackers my cashflow - see previous post re somewhat delicate finances - waiting a year for £8000 does not help - my staff have never offered to wait to be paid until a client pays their bill before being paid

[/quote] Cash flow is important and clearly prompt payment is important for cash flow every attempt to get paid promptly should be made. If refusing credit means people pay at the time great it improves cashflow. If refusing credit means people don't get the work done or leave, that doesn't help cash flow at all - the money still doesn't come in the only difference is the money will not come in next month when it otherwise might have done. Don't misunderstand I am not in support of a debt free for all, but I think you need to dissect bad debt figures and don't treat all bad debt as the same.

Re: real life finances

Evelyn Barbour-Hill — Fri, 22 Feb 2013 23:16:29 GMT

[quote user="Mark Holmes"] Ok I'll explain better. Assume you over the course of the year you take a chance on £10000 of work. Assume for argument that this work you knew up front was a debt gamble. End of the year you write off £2000. To avoid bad debt you stop taking gambles by turning down such cases you are now £8000 worse off. Fixed costs don't count as they don't change. Variable costs are typically pretty small. End of year profit £8000 (less variable costs) lower as a consequence of a decision to save money in bad debt. Now you can argue about the assumption that only 20% turns into bad debt that is true but if the gambles that pay are not considered you could lose much more than you gain.[/quote]

A gamble is a gamble. Whether this is a good idea depends on how much you like gambling.

Re: real life finances

Hanna Bennett — Fri, 22 Feb 2013 21:24:50 GMT

[quote user="Mark Holmes"][quote user="Hanna Bennett"]

[/quote]

Re: real life finances

Utlendigur — Wed, 20 Feb 2013 20:31:17 GMT

[quote user="Clive Ansell"]Both clients clearly affluent and driving large expensive cars, I wonder if they barter with the local garage every time they fuel up?[/quote]

Probably - it seems to be the ones with lots of money who are loathe to part with it - probably why they accumulate it!

This is one thing that drives me mad - the difficult, complaining, unpleasant client gets placated by having money knocked off the bill. The lovely clients who pay without a fuss end up paying full whack and subsidising them. It's just rewarding bad behaviour (something we tell clients not to do!)

Re: real life finances

Mark Holmes — Wed, 20 Feb 2013 20:17:09 GMT

[quote user="Hanna Bennett"]

[quote user="Mark Holmes"][quote user="Hanna Bennett"]

[/quote]

Re: real life finances

Hanna Bennett — Wed, 20 Feb 2013 19:35:03 GMT

[quote user="Mark Holmes"][quote user="Hanna Bennett"]

[/quote]

Re: real life finances

CatherineThomas — Wed, 20 Feb 2013 14:32:55 GMT

Yeah, I know. We have some lovely clients who are working but struggling and none of the charities will help them and then we have clients who have the funds to pay for a custom made trolly for their German Sheppard with CDRM and renal failure and have a massive house, 2 classic cars as well as a a decent new car but get the PDSA to pay for their dog's treatment and keep demanding extra tests because they've looked it up online and don't agree with our diagnosis, and hardly give us anything towards it. But then that is completely off track.

Re: real life finances

Evelyn Barbour-Hill — Wed, 20 Feb 2013 14:23:11 GMT

This is wandering into a new thread, I know...........

[quote user="CatherineThomas"] lack of the right type of benefits.[/quote]

I shall never understand why Charity assistance should be confined to those who are "on benefits" . This sort of thing leads to the welfare trap.

Re: real life finances

Clive Ansell — Wed, 20 Feb 2013 14:22:51 GMT

[quote user="CatherineThomas"]

On saturday we had a dog with an obvious pyo. Their normal practice had refused to see them so they came to us.

[/quote]

Why did they refuse to see them? what did they write in the clinical notes?

Maybe you should have sent them back if they can't pay or are likely to be bad debtors?

Re: real life finances

Clive Ansell — Wed, 20 Feb 2013 14:18:50 GMT

Reception had a tricky one this morning. 2 separate clients each with an elderly cay to be admitted for the day for sedation for blood sampling for T4. Client 1 was given a printed estimate for, I think, about £80 and signed the consent form, all fine. Client 2 signed her form and happened to mention to client 1 that the practice had "done her a deal for £55" because she had moaned about the cost and "anyway it's their fault if they need to sedate the cat". Result = angry client 1 who now wants same deal. A clear cut case of doing someone a favour backfiring. Both clients clearly affluent and driving large expensive cars, I wonder if they barter with the local garage every time they fuel up?

Re: real life finances

Rob Loxley — Wed, 20 Feb 2013 13:51:58 GMT

[quote user="Bob Russell"]Tesco' don't offer credit so why should we be expected to? [/quote]

I guess shopping is never do-or-die!

Re: real life finances

CatherineThomas — Wed, 20 Feb 2013 10:03:06 GMT

We are a PDSA petaid practice and therefore we seem to end up with a lot of clients with no money being told to come to us by other practices. But they often end up being clients who aren't eligible for PDSA help due to their postcode or lack of the right type of benefits. On saturday we had a dog with an obvious pyo. Their normal practice had refused to see them so they came to us. Unfortunately they were from the wrong area for PDSA and it's impossible to reach any of the other charities at the weekend. Fortunately although they couldn't pay anything on Saturday they did manage to find £100 to bring in on Monday to go towards the alizin and antibiotics and hopefully they'll be able to get some help from one of the charities to get her spayed. It is rather frustrating that her normal practice refused to even see the dog.

Re: real life finances

Bob Russell — Wed, 20 Feb 2013 09:26:20 GMT

Somehow we got the reputation for being 'easy-going' financially, a few years ago. This was probably because we made a great effort to get funding elsewhere if possible.

We ended up very quickly with a stream of 'I understand you offer credit' 'customers'. I am quite confident that 90% of them would have quickly become bad debts!

A printed 'unfortunately we are unable to offer credit' sign put pay to this.

Tesco' don't offer credit so why should we be expected to?

Re: real life finances

Mark Holmes — Tue, 19 Feb 2013 22:14:52 GMT

[quote user="Hanna Bennett"]

Re: real life finances

Hanna Bennett — Tue, 19 Feb 2013 19:37:41 GMT

[quote user="Mark Holmes"]I say again, not all bad debt is the same. Bad debt generated from work which displaces other work is one thing. Bad debt generated from taking a chance on something when the alternative is coffee is another and needs to be recognised differently. If you turn the work down because of potential bad debt and subsequently earn nothing the money was never coming in anyway.

[/quote]

oh and we are definitely not sat drinking coffee right now -would be nice to get the chance

Re: real life finances

Hanna Bennett — Tue, 19 Feb 2013 19:36:37 GMT

Re: real life finances

Anthony Todd — Mon, 18 Feb 2013 22:15:51 GMT

[quote user="Mark Holmes"]If you turn the work down because of potential bad debt and subsequently earn nothing the money was never coming in anyway.[/quote]

Logical, and it applies to the "pay or bump" debate, which is where this all began......

Take a punt, do the op, you might get paid and you'll save the dog which someone may love. [sorry lost my train of thought before I'd finished]

Re: real life finances

Jo Cobbett — Mon, 18 Feb 2013 16:52:17 GMT

[quote user="Cat Henstridge"]

[quote user="Arlo Guthrie"]I can't help wondering whether there isn't some way to get round this issue[/quote]

I am sure there was a charity that would pay deserving cases premiums on insurance policies, which did seem like a good idea to me. However, the one and only time I saw any mention of them was in the vet press, VT?, when they were saying they hadn't had any takers on their offer! I think vets needed to put forward clients they felt would benefit and then the charity decided whether to support them or not.

Anyone know if they are still going?

[/quote]

I think it was called MediVet (not sure if related to the corporate practice or not). They would pay the insurance premium for the first year, and renegotiate after that.

http://www.ma-trust.org/

Re: real life finances

Mark Holmes — Mon, 18 Feb 2013 06:40:11 GMT

I say again, not all bad debt is the same. Bad debt generated from work which displaces other work is one thing. Bad debt generated from taking a chance on something when the alternative is coffee is another and needs to be recognised differently. If you turn the work down because of potential bad debt and subsequently earn nothing the money was never coming in anyway.

Re: real life finances

Anthony Todd — Mon, 18 Feb 2013 02:26:34 GMT

[quote user="Evelyn Barbour-Hill"] but if there was a bad debt that I had allowed the whole amount was deducted from my bonus.[/quote]

That's what I did, with assessments though ie if something was operated on rather than euthed [sorry couldn't resist]...

Re: real life finances

Evelyn Barbour-Hill — Mon, 18 Feb 2013 01:55:17 GMT

[quote user="Braden Collins"]I think this may be a good compromise in some cases. It limits the clinics potential losses to $1000 per year, but allows the staff to make compassionate decisions when needed. It also means they have to seriously think about who they give credit to as if they chose badly, they may be unable to help others for the rest of the year.[/quote]

Geoff Parkin (who had been born and brought up in the town where he had his practice, and really knew his clientele) invented an excellent policy. I got a nice bonus as a percentage of everything I brought in, but if there was a bad debt that I had allowed the whole amount was deducted from my bonus.

Re: real life finances

Anthony Todd — Mon, 18 Feb 2013 00:47:35 GMT

[quote user="Braden Collins"]Any thoughts as to how useful a policy like this may be[/quote]

I like the sound of it in principle but in my practice the bad debts were hardly ever of the "pay or bump" variety, usually prolonged treatments where payment was never mentioned, deposits never taken and "We were told to pay at the end".

It seems though, that, from the responses here, most folk just do the emergency op. if there's no other course open and carry the probable loss of fees.

The classics were in the days of parvo when the new rotty was on a drip etc. for days, died and the client could often not even be contactable or "it's my sister's dog"...

There was an enormous reluctance to ask for deposits and the feeling seemed to be that the client is bound to pay in the end. Repeated defaulters were not uncommon, even though there was red flags everywhere.

Chasing bad debts was usually fruitless and sending accounts, to defaulters, a total waste of paper and post.

Re: real life finances

Braden Collins — Mon, 18 Feb 2013 00:28:24 GMT

I recently heard of a clinic that sets aside $1000 per year for cases where the client is going to pay off the work. the staff know that at no time can more that $1000 be owing by clients, but as the money owed is paid back it becomes available again for new cases. If for example a client has some work done and owes $500, there will only be $500 available for future cases. If they pay off $100, then $600 is available. If the client doesn't pay anything back, there is only $500 left for the rest of the year. Once the money is gone, it is gone for the year.

I think this may be a good compromise in some cases. It limits the clinics potential losses to $1000 per year, but allows the staff to make compassionate decisions when needed. It also means they have to seriously think about who they give credit to as if they chose badly, they may be unable to help others for the rest of the year.

Any thoughts as to how useful a policy like this may be?