DSO Finance: How to Streamline Accounts Receivable Processes

In the fast-paced world of dentistry, efficiency is key. But between patient care, scheduling, and running a business, accounts receivable (AR) can often fall by the wayside. This can lead to a slow DSO (Days Sales Outstanding), which ties up your cash flow and hinders your ability to invest in growth. 

At Duckett Ladd, we understand the unique challenges DSO finance presents for Dental Service Organizations (DSOs). That’s why we’ve put together a guide to help you streamline your AR processes and improve your DSO. 

Standardize Your Billing Procedures

The first step to streamlining your AR is to ensure consistency across all your practices. This means creating standardized billing procedures that everyone understands and follows. Here’s how:

Develop a centralized billing team: 

Consider establishing a central billing team responsible for handling all patient invoices. This team can leverage economies of scale and become experts in navigating insurance complexities, leading to fewer errors and faster reimbursements. 

Implement a standardized billing system:  

Invest in a robust billing software that integrates seamlessly with your practice management system. This will automate many tasks, reduce manual data entry errors, and ensure consistent billing practices across all locations.  

Create clear patient communication protocols:

Develop clear communication protocols for explaining billing procedures, co-pays, and deductibles to patients. This transparency can help manage expectations and avoid misunderstandings that could delay payments. 

Leverage Technology for Faster Collections

Technology is a powerful tool for improving DSO finance. Here are a few ways to leverage it:

Offer online payment options: 

Make it easy for patients to pay their bills conveniently by offering online payment options through your website or patient portal. This can significantly reduce the time it takes to collect payments. 

Automate payment reminders:

Utilize email or text message reminders to nudge patients about outstanding balances. These gentle reminders can significantly improve collection rates without being intrusive.

Invest in electronic claims submission:  

Streamline your insurance claim process by submitting claims electronically. This minimizes delays and ensures faster reimbursements from insurance companies, improving your cash flow.

Strengthen Your Collections Strategy 

Having a robust collections strategy in place is crucial for managing DSO effectively. Here are some steps to consider:

Develop a clear escalation process:  

Establish a clear escalation process for dealing with outstanding payments. This might involve sending follow-up letters, making phone calls, or referring accounts to a collections agency as a last resort. 

Train your staff on effective communication: 

Train your staff on how to communicate effectively with patients about outstanding balances.  Emphasize empathy and understanding while firmly communicating payment expectations. 

Offer flexible payment plans:  

Consider offering flexible payment plans to patients who are struggling to pay their bills upfront. This can help you collect more revenue while making it easier for patients to manage their dental care costs.

Embrace Data-Driven Decision Making 

Data is your friend when it comes to managing DSO finance. Here’s how to leverage it:

Track key DSO metrics: 

Regularly monitor key DSO metrics,  such as average invoice turnaround time, collection rates, and write-offs. These metrics will give you valuable insights into how your AR processes are performing and where improvements can be made. 

Identify trends and outliers: 

Analyze your data to identify trends and outliers. For example, you might discover that a particular insurance company consistently takes longer to process claims. This information allows you to take targeted actions to address problem areas.  

Use data to optimize your processes:  

Use the insights gleaned from your data to refine your processes and continually improve your DSO. Regularly review your data and adapt your strategies based on real-world results.

Building a Financially Healthy DSO

By implementing these strategies, you can streamline your AR processes, improve your DSO, and free up valuable cash flow to invest in your DSO’s growth. Remember, a healthy DSO finance system is a critical component of a successful DSO. Consider working with a dental coach to gain additional insights and support in streamlining your AR processes and achieving your financial goals.

At Duckett Ladd, we have extensive experience helping DSOs optimize their financial operations. Contact us today to learn more about how we can help you achieve your financial goals.


Duckett Ladd, LLP does not provide tax, legal, or accounting advice. This content has been prepared for informational purposes only and should not be relied on for, tax, legal, or accounting advice. You should consult your own tax, legal, and accounting advisors before engaging in any transaction. Also, tax law is ever-changing, and every effort should be made to seek out the most current information. Make sure to check the date of published content to ensure the most current information.


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