Carrying staff balances: When employees take it too far and what you can do about it

Jul 9, 2019 | Finance, Popular

A widespread challenge in the veterinary industry is showing clients the value of our services, but what about staff members? Surely it’s essential that our staff members understand the value of the services we provide. 

However, most veterinary hospitals give staff members an extremely generous discount on goods and services and allow carrying staff balances. If a staff member accrues a balance of unpaid goods and services on their account and does not pay it off for months or years, what does that tell us about how the staff member values our services? 

There’s a disconnect here. 

Negative Impacts of Carrying Staff Balances

We all know that things happen from time to time and having empathy for employees is important. We’re not talking about a couple days delay on payment of a big bill. We’re talking about staff members who continuously have a rolling staff balance. They might pay a little here and there but continue to add to it and overall their balance grows to beastly proportions.

Allowing staff members to carry a balance on their account over an extended period of time can have substantial impacts on the practice: 

  • Loss of or delayed revenue
  • Resentment toward staff members who carry large balances, leading to a toxic work environment 
  • Time wasted tracking down staff members, creating payment agreements, and staying on top of payments 
  • Staff member mindset shifts to not value professional services
  • Lax staff payment policy trickles over to lax client payment policy 

There may not be a hard and fast rule as to how to avoid this in your practice, but following a few guidelines and implementing protocols can definitely help curb this common problem.

How to Prevent Excessive Carrying of Staff Balances

  1. Set a good example.

    Doctors and managerial staff should never carry a balance on their account. Services rendered, bill paid. As leaders in the practice, it is essential that a standard is set and that all other staff are encouraged to follow suit. If you have doctors and managers with balances, work to clear those up first.
  2. Be transparent.

    Your entire staff does not need to know all the ins and outs of the practice’s financial data. However, if they understand your average profit margin or what percentage of your monthly revenue goes to labor and wages, then they can see the bigger picture and ultimately their place in it.
  3. Back yourself up with documentation.

    Ensure you have a current employee handbook and detailed job descriptions. The employee manual should clearly state the policy on account balances. This can, and should, differ from practice to practice.

    The manual should also state rules on unpaid balances that extend past the allocated time frame. Is interest accrued after a certain time period? If so, what percent? Is the balance deducted from a paycheck? It’s important to establish these numbers before you find yourself in a situation with an employee who suddenly has a $1,000 balance with no game plan on how to pay it off.

Here are two examples of account balance payment plans based on percentage payments:

  1. Employees must pay 50% of the total invoice at the time of the invoice.
    The remainder of the invoice needs to be paid in 25% installments every 2 weeks. In this format, the employee takes 8 weeks to pay off their balance.

  2. Employees must pay 40% of the total invoice at the time of the invoice.
    The remainder of the invoice needs to be paid in 20% installments every 4 weeks. In this format, the employee takes 12 weeks to pay off their balance.
  1. Treat staff and clients the same.

    What are your policies for clients who cannot pay their total invoice? How do you structure your payment plans? There should be a similar process for both clients and staff who have trouble paying their bills. You have provided the same care and services to them both, so the same rules should apply.

Another policy to consider is that balances cannot be carried for routine or elective procedures. The logic is that you can plan ahead for when your yellow lab Frank is due for his annual vaccines or needs a refill of his heartworm prevention. It’s a little more difficult to plan ahead for when Frank eats a corn cob and needs an emergency laparotomy. 

All pet owners should have a contingency plan IF the unthinkable occurs, but that’s a different conversation.

Carrying Staff Balances: Culture Shift

Despite focusing on some specific rules to try and eliminate or at least curb this issue in your practice, like many problems, the ultimate solution is cultural. 

Believe in the services you provide, and believe in the costs associated with them. Clearly outline the discounts staff will receive, and the rules around how their account balances are to be paid. Veterinary staff should want to pay for the services their employers provide. If your staff values the practice’s services, they will better be able to convey that value to your clients. 

Originally from Nova Scotia, Katie moved to Toronto to complete her undergraduate degree in art and art history. During that time, she took a part-time job as a kennel attendant and never looked back. Over the next decade, Katie worked tirelessly in almost every role a veterinary clinic has to offer. From client communication to inventory management, from cat wrangling to hamster anesthesia, Katie’s varied experience in the veterinary world is certainly an asset in her current role as Customer Success Manager for VetSuccess. 

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