Dealing with fees and payments in private practice: The dos and don’ts
The sad reality of running a private practice is that it’s not always easy to get clients to pay on time, the full amount, or at all. For a lot of private practice owners and healthcare professionals (and especially the non-confrontational ones), it can be a very stressful challenge. Non-payment doesn’t only hurt the business, but can also damage the client-practitioner relationship, impact the practitioner’s self-esteem and negatively affect the client care.
With these consequences in mind, below are some do’s and don’ts for getting your clients to pay. Try some of the strategies below and see which ones work for you and your clients.
Do: State your fees upfront.
Paying for a session in a private practice is a straightforward transaction as in any other business. You provide a service for a certain price that the client is expected to pay. To reduce any confusion, clearly state your fees before commencing the session.
Maybe: List your fees on the website.
Many private practice owners are divided on the decision to list their fees on the website. Some feel it’s necessary to provide clients with accurate information as well as to attract the clients that are willing to pay the fee. On the other hand, some feel that it may drive potential clients away who may not be able to afford the full price. Or clients who want to shop around to find a cheaper fee only to end up calling another practice (whose fees aren’t listed on their website) and paying the same fee.
The decision to list your fees on the website is up to you. The impact of it depends on your target audience, the appearance of your website, your location, the services you provide, your fees, and so many more variables. Trial and error is your friend here.
Do: Tell clients about your fees over the phone.
When clients call to enquire about your fees, tell them your fee options clearly. If you’re like many of the private practice owners we work with and find it uncomfortable to talk about money, practice! Unless you have an in-house or virtual receptionist, you can’t avoid the money conversations.
Practice on your friends and family and ask how you come across. Unnecessary and unprompted justification of your price or shyness in your voice could sound like you’re unsure about your fee decisions. Say it confidently and let the client decide.Talking about your fees is unavoidable. If you're uncomfortable talking about fees and payments, practice it!Click To Tweet
Don’t: Offer concessions or discounts unless asked.
A lot of us are guilty of offering too much too quickly. For some, it’s because they don’t absolutely believe in the fee they set, or they’re uncomfortable stating it. For others, it’s because they’re uncomfortable with the silence.
If you were calling to enquire about a service and were told that you could get a significant discount, wouldn’t you try your best to take up the offer? And if you’re ineligible, you’d feel more disappointed than if you hadn’t known about the discount in the first place. Unless there is a good reason, don’t mention your concession rates.
However, if you feel compelled to let every potential client know about your various fee options, just ask a few simple screening questions to determine their eligibility. For example, instead of saying “we have student concession rates”, ask “Are you currently a student?”
Do: List your fees in the waiting room.
Another option to clearly state your fees is to display them in the waiting room. A simple list of fees can tell clients what’s expected of them and that everyone else is paying the same amount. Most clients in your waiting room would already know their session fee. But if you’re worried about scaring away the rare walk-in clients who may be eligible for concession, a simple “Concession rates available” is enough.
Don’t: Agree with the client who says “That’s so expensive!”
You might think agreeing with the client makes you seem empathetic, and that the client will understand once you explain to them why you have to charge the amount. But would you feel the same if you were the client?
Most of the time, the only thing we hear is the service provider’s confirmation that the fee is steep, and we’re already thinking of different places to ring up.
Don’t: Go into the details of the business side.
Clients are not your business advisors. They’re also not responsible for the issues you have with running a private practice. It can be inappropriate to explain how you make use of the money to pay for services that are beneficial to the clients and how you barely make a profit. Practice a simple 1- or 2-sentence explanation of your fee for clients that enquire, and leave it at that.Avoid going into too much detail about why you charge what you charge. Set the fee and stop trying to justify it!Click To Tweet
Do: Clearly communicate your payment and cancellation policy.
Most private practices would include their cancellation policy on their client intake form. However, make sure to tell your clients in person about your the policy during your first introduction session.
Again, don’t shy away from talking about money. Let them ask questions and kindly inform them about your payment and cancellation processes.
Do: Consider offering a discount for prepayment.
If you find that you have a high cancellation or no-show rate, you might consider offering an incentive to clients to pay prior to the session. For example, clients who pay before their appointment could receive a 5% discount.
One way to incorporate this into your operations is to offer an online or over-the-phone prepayment option for first-time clients. Another method is to offer the option to your existing clients at the end of the session.
Do: Accept different payment options.
Reduce hiccups in the payment stage by offering several types of payment options. Accept card and cash, but also be mindful about the different types of credit cards.
A little note about the accepted payment methods on your website and in the waiting room could be another useful way to provide information to your clients.
Do: Invoice or process payment right away.
Take care of the invoicing and payment immediately after a session. This is good practice so that you don’t have to remember to do them later, and it also helps you to keep track of your records.
For sessions for which you can’t receive payment immediately (e.g., insurance), make sure to complete the invoicing process before you move onto the next session.
Do: State. (Don’t ask.)
Many polite and conscientious private practice owners tend to ask for payment (or scheduling the next appointment). If you’re prone to doing this, remind yourself that payments are required, and the terms don’t need to be re-established every session.
Below are some alternative statements you can make at the end of a session:
- “I’ll just take you to process payment.”
- “You can go to reception to pay.”
- “We take cash and card – whatever’s easier for you.”
- “That’ll be $180.”
- “You could pay for the next session now if you like.”
Do: Consider accepting installments.
Some clients really can’t afford to pay. Just because you’re running a business and wish all clients would pay in full, doesn’t mean you can’t make it easier for clients that really need the help. Offer installments for those that could really benefit from them. For example, for clients that you see every 4 weeks, you could accept weekly installments.
While it’s not entirely up to you, try to establish the installments before the session to avoid hurrying the conversation while your next client is waiting for you.
Do: Negotiate under certain circumstances.
Sometimes clients who are not eligible for your concession rates might still need the help. This is up to the practitioner to determine after discussing with the client. Give yourself a mental checklist of your criteria for exceptions and offer discounts within the boundaries you’ve set.
Don’t: Get lazy on account keeping.
When you make exceptions for clients whether it’s installments or concession, it’s critical to keep an accurate report. Mark off every time a client makes an installment payment and don’t be afraid to use the information. For example, if you see that the client didn’t make their 3rd installment, follow up. And make a note in the client file.
Information that you think you can remember or don’t think is important can still be very useful at a later date. Additionally, you’ll be able to keep track of “exception clients” and see their impact on the financial viability of your practice.
Don’t: Continue to accept clients that don’t pay.
No matter how hard you try, there will always be clients that don’t pay the full expected amount or at all. Of those clients, there may be a very small percentage who you feel compelled to offer pro bono sessions to, or continue to be shortchanged for. That’s up to you to decide, as long as you’re not making these exceptions for every client that doesn’t pay.
For the rest of the non-payers, you need to do the responsible business owner thing and stop accepting further bookings. Communicate to the clients why you won’t see them anymore so everyone is clear. Make a note in the client file, and tell your receptionists and other practitioners so that everyone is aware of the situation.
Even the most organised practice will have debtors and unpaid invoices. We can’t help that in business, but the goal is to put in the effort to minimise it. Try the do’s above and see what works best for your practice. And remember that the most important thing is to deliver your message (whether it’s about your fees or cancellation policy) with confidence.
Confidence around your fees don’t always come naturally but it can definitely be learnt and practiced, as we have seen many times with our clients. If you need guidance around improving your confidence and resolving payment issues in your practice, don’t hesitate to reach out to us or explore our monthly programs and coaching services.
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