As a dentist, you work with the general population more than many other professions do. In doing so, you come across circumstances that warrant you not charge for services. There are a lot of good reasons to do so – extended family members or other professionals you want to help out or someone who is having a difficult financially.
Every practice does this to some extent. However, is your dental practice monitoring the amount of professional work that is being given away? Do you have policies in place to decide who gets the courtesy of free or partially free services? If not, developing a courtesy account policy will help you to monitor this process and ensure everything is being tracked and documented.
The following are a few things to consider when developing a courtesy policy:
Who is in charge of approving professional services?
If you don’t sit at your computer and review the write-offs on a monthly basis, you could be opening yourself up to theft. Ideally, only the owner should approve professional write-offs. This lets you monitor the amount of courtesy services, but, more importantly, it is essential as an internal control to prevent your office assistant from stealing cash from your dental practice.
What are the standards for giving services away?
This is something you will have to answer for yourself. Remember that once you open this door for one person, it can be a hard one to close on others. For example: Do you provide services for one staff member’s family at a discount, but not others? Where is the family line drawn? Developing standards for giving service away for free or at a lower rate will keep the process consistent and fair.
If there are multiple dentists in the group, does everyone use the same standards?
It is best that you write down those standards and make the staff aware of them too. This will prevent others from feeling like the process isn’t fair or consistent. If the process is documented, there will be no confusion on what is and isn’t acceptable.
Do all parties involved understand that you are providing courtesy service?
Make sure the person receiving the professional courtesy understands what you are doing, including the amount of the services they are receiving. I recently talked to a dentist that was providing services to a family’s young child at almost zero cost. Why? Because it was a child and the dentist really wanted to help. However, the family missed appointments and were late several times. If you are clear about what you are doing, the people involved are less likely to take advantage of your generosity.
Whether you decide to write-off or give away services as a professional discount is up to you. If you do, be consistent. Make sure your office knows the policy and that the people you are doing the work for are aware of the value. Need help deciding what is right for your dental practice, contact Rea & Associates. Our team of adept and talented Dental CPAs can help you determine what policy is right for you.