Running a dental practice is difficult, especially when you’re just starting off. The cost of payroll, equipment, and a steady stream of proper supplies can easily overwhelm dwindling revenue that hasn’t gathered enough momentum yet. As you know, the problem doesn’t lie in your skills or services, but in the struggle of waiting on long and diluted receivables from your clients. However, a clever financial maneuver called dental factoring can immediately get you the cash that you need to help your practice thrive.
It’s simple: you sell your open patient invoices to one or several finance companies (or the “factors” in this case) at a discount, and they quickly turn those flickering receivables into revenue. With this ability you don’t have to struggle to pay yourself or your employees, an unexpected capital opportunity or equipment replacement won’t crush you, and you can consistently afford to give your clients the best possible care.
Another one of the perks of dental factoring is that you’re not going into debt at all, and with particularly great finance companies, it’s more like outsourcing a dedicated receivables department. You aren’t taking a loan, you actually sell your invoices like assets. For that reason, any financial institution you make an offer to will consider not your credit, but your clients’ credit, since your clients are paying the financial institution, not you. So, some institutions will even offer full credit checks on your clients, saving you both time and concern. This practice centralizes revenue so that you or anyone in your office won’t have to spend time tracking down payments. Instead, a steady stream of revenue keeps flowing from your “factors” as they take care of your invoices for you.
Also, take a moment to think about the complexity of all the different aging periods on your many open invoices. One patient is paying every 60 days, one every 90, one every 30, and they all came in a few days apart… that is only a fraction of the housekeeping horror that you have to master without factoring services. You’ll never lose track of any missed payments when you have a team of professionals devoting themselves to gathering your revenue.
Hopefully this provides you with some new ideas to help keep your dental practice afloat. It’s obviously a great challenge at first (even with how much revenue you expect to get), but dental factoring can help you get past your initial struggles and become a thriving, flourishing practice.