This is a topic that no therapist likes, yet it’s one that just about every therapist struggles with. It’s something that I had been struggling with for probably the past 5 years, but I’ve gotten better at it and decided that I should share what I’ve learned with all of you out there. But first, consider this startling fact: If you fail to collect just one $30 copay per day, that’s $500 at the end of the month that you were cheated out of.
Being a better bill collector is essential for private practice. I have known people in private practice who should have had successful practices: They had a full caseload and a great reputation, yet they struggled to pay the bills. Why? Because they were horrible when it came to collecting what was due to them. Collecting payment is something anyone in business needs to know how to do in order to survive. Let’s go over what I’ve learned so far:
1. Not paying you is stealing: If you render a service and the customer doesn’t pay you for it, that customer just stole that service. Think about it, if you went to a restaurant, ate a delicious meal, and then slipped out the door without paying, that would be stealing. Now imagine if you came back every week, still eating at the restaurant and still not paying. That’s a lot of nerve, right? And yet, we have clients that try to do this very same thing. Although our services are rendered with love, they still need to be paid for. And when you don’t pay for a service you received, that’s stealing.
2. Copays/Payment is due at the beginning of the session: This is important. Don’t wait until the end of the session to try to collect because it’s easier for people to just say “Oh I don’t have it. Sorry. I’ll catch you next time”. It’s also easier to forget about collecting payment at the end of the session as you’re focusing on wrapping up the session and seeing your next client. Always get it at the beginning because if it turns out that they aren’t going to pay you, you can then make a decision about whether to see the client that day. It’s a basic rule in business that the value of your services diminish after they have been rendered, that’s why you always get payment first.
3. Put up a sign! I have it spelled out in my office policies and in various places on my website that payment/copays are due at the beginning of the session, yet client’s frequently forget this anyway. If it feels awkward reminding people at the beginning of each session to pay their copay, just put up a sign that can be easily seen by your clients when they walk in that says “Payment is due at the beginning of the session, If you don’t pay your copay you cannot be seen”. This way no one can say they didn’t know. I actually saw this same sign at my doctor’s office. How come it’s okay for doctors to do this but not therapists?
4. Keep an easy record: I keep an appointment book. When the client walks into my office, I put a check-mark next to their name. When they pay me, I write down the amount they paid me next to their name. This way I can keep track of who has paid me and how much. The second they pay you, write it down in your book. Don’t do anything else until you’ve written it down. Don’t say to yourself “I don’t need to write it down right now because I will remember.” Trust me, you wont.
5. Don’t take checks: When I first started out in private practice, I figured I would receive the occasional bounced check and that that was just part of being in business. Boy was I wrong. The amount of bounced checks I received was astronomical. More often than not, I was receiving bounced checks, and just for a $20 copay. It was also surprising that these bounced checks were coming from people who had good paying jobs and seemingly more money than I had. Because of that I decided not to take anymore checks. I made an exception for a client recently who swore she was good for it and acted insulted when I told her I wasn’t going to take checks because I’ve had too many bounce. Can you guess what happened? The check bounced! No more checks. Cash or credit only.
6. Send an invoice: So what do you do if despite all of the previous measures you still are finding yourself not paid? I used to send the person an email the next day. It was so awkward. I didn’t want to be the person that came after people for money. I would put so much effort into phrasing and trying not to offend the person, and also trying to phrase things in a way that would motivate the person to actually pay me. It was stressful. Fortunately, now I just send an invoice through paypal. This is not an advertisement for paypal. I’ve had paypal since 2001 so I use them because it’s convenient to me. If you can think of a better way to send invoices, then go for it. What I do is the next day I log into my paypal account and click “invoice”. I put in the person’s email address, the amount they owe me, and then the reason for the invoice which is usually just “copay” or “cancellation fee”. No more worrying about how to phrase it! Even better, paypal will send them reminders to pay the invoice and it’s a handy way of keeping track of whose paying and who isn’t.
7. Set up recurring payments: Another service of paypal is that you can set up recurring payments for your clients. If your client sees you every week and has a $20 copay, they can set it up that paypal will automatically pay you that $20 every week, or every other week, or once per month. Whichever is easier and makes the most sense. Both you and the client can stop the recurring payments at anytime. This is a good one if you have a client who keeps “forgetting” to pay their copay. Now there’s no excuse. I would hesitate to suggest this at the first session with a new client just as it might seem like too much of a commitment for someone just coming in the door. I personally only use this one with long term clients or with clients who are bad about remembering to pay me.
8. Get a card swiper or smart phone: Therapists are not known to be technology savvy people but it does help to get with the times if you want to get paid. Going back to trying to make sure you’re always paid at the begging of the session: What do you do if a client tells you “Oh, I don’t have any cash on me”? I then ask them “Do you have a smart phone?” If they say yes, I tell them to go to my website and then click the “make a payment” button. They can then pay me through there. Another option is to have a credit card swiper. They make them now where you can just attach it to your own smart phone. Although the invoices are great, nothing beats getting paid right then and there. The “just pay me double next time you’re here” doesn’t always work because some people would rather not come back or just switch to a different therapist than have to pay you.
9. State your fee from the very beginning: I have a cancellation fee and a no-show fee. As difficult as it is to get clients to pay their copays, it’s even more difficult to collect these fees as clients often view it as “you getting paid for doing nothing”. They also often use the excuse “I didn’t know there was a cancellation fee” and so don’t think they should have to pay it because “they didn’t know about it”. My fees are listed in my office policies, on my website, and new clients have to sign two forms agreeing to pay them, but I’ve found that still isn’t enough. Something new I’ve started doing is making sure I discuss them with people right at the very first session. I also remind people in my voicemail message. Reminding people seems to be a good deterrent for last-minute cancellations.