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Invoicing & Fees for Veterinary Offices Video

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  • 0:01 The Cost of Care
  • 0:40 What Is an Invoice?
  • 3:03 Payments and Debt Collection
  • 5:23 Lesson Summary
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Lesson Transcript
Instructor: Artem Cheprasov
This lesson will go over some important points regarding invoices and how they should be detailed, the importance of estimates, as well as credit extensions and debt collection rules.

The Cost of Care

Like it or not, veterinary medicine is not free. You can't expect to run a multi-million dollar hospital, all of its equipment, and staff on air alone. And since good care requires the best personnel, equipment, and supplies, you can expect that the best care will more often than not be the most expensive care as well.

Even in cases where there's a low-cost clinic available, the hospital or clinic must turn a profit to continue functioning. This is why the subject of invoicing and fee collection is so important.

What is an Invoice?

Every client that receives any kind of service in a clinic needs to be presented with an invoice, an itemized bill for any services rendered or goods sold. The invoice will outline the fees for any services performed and prices for any goods sold. It is very important that prior to collecting payment from a client that:

  • The client is given an estimate of the cost of the procedures that will be performed
  • The client signs a consent form or another form affirming they understand they are responsible for payment in full on the day the services are rendered

Both of these points are very important in order to prevent arguments or misunderstandings about the expected cost of a procedure. How would you feel if you were told that your pet needed surgery and then got stuck with a $2,000 bill out of nowhere? This is why estimates are given and forms are signed before anything is started, so there are no surprises.

Another very important point about invoices is that invoices should be detailed so that clients see the full value of the service that was rendered. Most clientele have no idea about the amount of work, medication, and skill that goes into helping their animals behind the scenes. By providing a detailed invoice, clients can see exactly why they were charged an amount and better understand the quality of service they are offered. For instance, if one invoice says something like 'surgery - $2,000', and nothing else, clients may feel like they're being cheated out of their hard-earned money.

However, if the same exact procedure is detailed in an invoice to say something like the following example, then the client will be able to more fully appreciate how and why their money was spent:

  • X-rays to locate the foreign body: $250
  • Anesthetic medication, monitoring, and supplies: $250
  • Surgical procedure, surgical supplies, equipment, and instrumentation: $1,250
  • Post-operative nursing care and pain relief: $250

With such an example, the client can truly appreciate the many things that went into what was formerly labeled as just 'surgery.' The client should not be expected to know all of the things that go into a medical procedure, thus the need to detail it out for them in an invoice.

Payments and Debt Collection

Unfortunately, veterinary medicine experiences a not so small rate of outstanding accounts, a fully or partially unpaid account, balance, or invoice. Because a large enough percentage of clients are at risk of not paying or do not pay for services rendered to them and their pets, veterinary clinics and hospitals should not extend credit to their clients, as this can really hurt a clinic in the financial sense and, by extension, the quality of care a clinic can provide to other clientele.

If a clinic cannot collect payment, they suffer financially and must cut back on quality of care eventually. This is obviously very bad for most other clients and patients who always pay on time and in full. And so, accounts receivable should never exceed 2%-3% of revenue. An accounts receivable is simply a term for money owed by customers.

If payments are made by credit card or check, a valid picture ID number should always be verified and written down by the front office personnel. This is because the number of fraud cases are increasing in the U.S. in general. By collecting verifiable photo IDs, like a driver's license number, fraudulent payers can be prosecuted more easily, and collections agencies can go after an offender more easily as well.

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