How To Improve Dental Practice Revenue By Managing Cash Flow

Melissa LuVisi
September 24, 2020 | 3 min read

While it’s important for a dental practice to acquire and retain patients, don’t overlook one important factor that’ll determine the success, and even survival, of your dental practice -- cash flow.

In fact, cash flow is the lifeblood of the business because it pays for things you need to run your dental practice, such as employee salaries, rent, equipment, and marketing services. 

Why Is Cash Flow Important for Your Dental Practice?

Positive cash flow is a good indicator that your business is running smoothly as you’re generating the dental practice revenue you need to cover expenses and making a profit. When you have a high positive cash flow, you can make new investments (e.g., hire employees, open a new location) to scale up your business.

Without positive cash flow, you may not be able to purchase new equipment or technologies to stay competitive. You could face challenges in attracting or retaining qualified professionals to treat your patients. 

If you cut down the resource you invest in running your practice and marketing your business, you may not be able to acquire and retain enough patients -- further impacting your cash flow and creating a vicious cycle.

Understanding Productions vs. Collections

To master your cash flow, you need to understand the concept of productions vs. collections. Simply put, “productions” is the amount you charge while “collections” is the amount that goes into your bank account and determines your profit margins.

There are two types of productions: gross and net. Net productions, or adjusted productions, is gross productions minus adjustments and write-offs -- it’s the amount available for collection. 

If you focus solely on productions, you could be spending a large sum on attracting and serving clients. But without a system to ensure a high collection rate, you may not get paid for all the services you have performed. 

In fact, a low collections percentage could mean that you’re losing money for every client that walks through the door!

How To Improve Your Cash Flow By Increasing Dental Collections

While there are different strategies to improve your cash flow, none is more powerful than increasing your dental collections because it represents money in your pocket!

1. Ask for Payment When Patients are in Your Office

Whether it’s a co-pay, deposit, or balance, offer patients the option to make a payment while they’re in your office. Have your patients fill out online forms before their visits so you can check their insurance coverage ahead of time. You can also use a practice management software that allows you to collect same day payments with mobile payment solutions.

2. Issue Invoices Promptly and Follow Up Regularly

If you can’t get patients to pay in full at the time of service, issue invoices immediately after the visit as e-statements to avoid delays associated with cumbersome paperwork. Make sure to follow up by using a dental practice management software that allows you to automatically send out reminders via email and text at regular intervals.

3. Encourage Early Payment

Incentivize patients to pay their bills early. For example, if your standard contract has a thirty-day term, offer a small discount for payments made within 10 days. Also, make it easy for patients to pay you by accepting online payment -- it’s much easier if they don’t have to hunt for the checkbook, an envelope, and a stamp!

4. Structure Your Payment Plan 

If you offer payment plans to patients, request an upfront deposit and/or schedule payment intervals throughout the treatment process so you’re generating cash flow along the way. You can also automate recurring invoicing through your cloud dental software to send e-statements via email and text to make sure you get paid on time.

5. File Electronic Claims and Track Status

Use a dental practice management software with a billing module that integrates all your e-claims so you can get paid quickly without having to manage multiple vendors and payer portals. Also, track 30/60/90 days pending claims within the dental practice management software to know exactly where the claims are and follow up when needed.


It’s important for dental practices to focus on both productions and collections so you’re not only getting patients but also getting paid. Create a system and use a robust dental management software platform to help you manage your dental practice revenue cost-effectively. tab32 can help you do all of the things mentioned above, request a demo today.

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