Getting paid faster: invoicing and statements for dental labs
A dental lab gets paid faster when each invoice can be matched to a patient at a glance. Here is what to put on invoices and statements, and when.
By the Tusko team
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A lab gets paid faster when three things are true.
Each case is invoiced the day it ships, each invoice can be matched to a patient without a phone call, and the statement holds no surprises.
None of that needs a collections policy, only paperwork that the person paying can check in a minute.
This guide covers what goes on an invoice, how a statement should read, and a routine for month end.
Why a lab invoice gets paid late
A late payment often comes down to paperwork. Something on it made the bookkeeper stop.
- They cannot tell whose case it is. The invoice shows a case number, and the practice thinks in patient names.
- A charge is new to them. An extra appears that nobody at the practice remembers agreeing to.
- A remake is unclear. It looks as if they are being charged twice.
- The statement and the invoices disagree. The total cannot be rebuilt from the lines.
- It went to the wrong person. The dentist has it, and the office manager pays the bills.
Each of these turns a payment into a question. The question waits for someone to have time to ask it.
Fix the paperwork, and much of the waiting goes with it.
What every invoice should carry
An invoice has one job. It lets the practice match a charge to a case and approve it.
| On the invoice | Why |
|---|---|
| Invoice number and date | So both sides can refer to it |
| The practice and the prescribing dentist | A group practice sorts by dentist |
| The patient, as the practice wrote it on the Rx | This is how the practice will look it up |
| The teeth, in FDI notation | To tell two cases for one patient apart |
| Each item, with its fee | The product, in the words your fee schedule uses |
| Each extra, on its own line | Nothing folded into a total |
| How tax applies | The treatment for each line |
| The date shipped | To match the delivery |
| Terms, and how to pay | In one line |
| A name and number for questions | So a query takes one call |
Use the patient details the practice gave you and nothing more. An invoice travels through more hands than an Rx does.
Match the wording to your fee schedule exactly. If the schedule says “full-contour zirconia crown”, so should the invoice.
Number invoices in one sequence with no gaps. A missing number makes a bookkeeper wonder what was left out.
Invoice when the case ships
Put the invoice in the box, and send a copy the same day.
The practice checks it while the case is in front of them. A wrong tooth or a missing extra is caught on day one.
Compare that with invoicing at month end. Forty invoices arrive at once, for work that was seated weeks ago, and nobody remembers the details.
Invoicing as you ship also spreads your own work across the month. Month end becomes a statement run, and stops being a scramble.
The same invoice, sent on two different days
Two columns compare when an invoice is sent. Sent the day the case ships, the practice checks it with the case in front of it and an error is caught on day one. Sent at month end, invoices arrive all at once for work seated weeks ago, and nobody remembers the details.
The day the case ships
In the box, with a copy sent the same day
- The practice checks it while the case is in front of them
- A wrong tooth or a missing extra is caught on day one
- Month end becomes a statement run
At month end
Every invoice for the month at once
- The invoices arrive together
- The work was seated weeks ago
- Nobody remembers the details
Make the statement easy to approve
A statement is a summary. It should hold nothing the practice has not already seen.
Send it on the same day every month. List four things, in this order.
- The balance carried forward, and the payments received since.
- This month’s invoices, one line each, with the patient and the date shipped.
- Credits and remakes, each pointing to the invoice it relates to.
- The total due, and the date it is due.
Add a line for anything older than the current month. A bookkeeper should see at once what is overdue.
Send it to the person who pays. Ask each practice who that is, and check once a year.
Tax and the federal dental plan
How tax applies
Tax is a common reason for a query. Say how each line is treated.
The CRA’s memorandum on medical and assistive devices says a supply of artificial teeth, such as dentures, crowns and bridges, is zero-rated.
Orthodontic appliances are zero-rated as well.
Other things a lab invoices may be treated differently. Confirm each product and extra with your accountant.
Then make the invoice show it. A bookkeeper who sees tax on one line and none on the next will ask why.
Provincial sales tax has its own rules. Check them for each province you ship to.
Federal dental plan cases
Some cases are for patients covered by the Canadian Dental Care Plan. The practice submits the claim, and your invoice may be part of it.
The plan’s Dental Benefits Guide says it can “require a copy of the laboratory report/invoice”. It can also adjust the lab fee the practice asked for.
Two habits help the practice.
- Invoice each case on its own. A statement line is no use as evidence for one claim.
- Be able to send a copy the same day. A request may come long after the case was seated.
CDCP and lab fees covers the rest of what the plan says.
Handle remakes and credits in the open
Nothing damages trust in a statement like a remake that cannot be followed.
Give every remake its own line. Refer to the original invoice, and show the fee, even when the fee is zero.
Do the same for credits. A credit that simply lowers the total leaves the practice unable to check it.
Your written policy decides which remakes are charged. How to write a dental lab remake policy covers that.
From approval to payment
Remove every small obstacle between approval and payment.
- State your terms on every invoice and statement
- Offer the ways your practices like to pay, and say what they are
- Put the invoice number in a form that is easy to quote
- Email statements to a named person as well as posting them
- Thank practices that pay on time
A practice that has to ring for your banking details will pay next week instead.
Follow up early and calmly
Decide in advance what happens to an overdue account. Then do it the same way for everyone.
A week after the due date, phone the person who pays. Ask if anything on the statement was unclear.
That call often finds a question, and answering it releases the payment.
If an account is often late, look at your own side first. The statement may reach them late, or reach the wrong desk.
Keep it separate from the work. A technician should never hear that a practice owes money.
A month-end routine
With invoices already sent, month end is short.
- Check that every case shipped this month has an invoice.
- Check that every remake and credit refers to an original invoice.
- Post the payments received.
- Run the statements, and read three of them as if you were the practice.
- Send them on your usual day.
- List the accounts to call next week.
Step four catches errors a report will not. If a line puzzles you, it will puzzle them.
The fees behind every invoice are covered in how Canadian dental labs build a fee schedule.
A question about an invoice is quickest to answer from the case itself. Tusko keeps the Rx, the dates and the messages on one case that both sides open.
See how it works for labs.
When should a lab send its invoices?
With each case, on the day it ships. The practice can check the invoice against the work while both are in front of it. A monthly statement then lists invoices the practice has already seen.
What payment terms should a dental lab set?
Terms you can state in one line and will hold to. Put them on every invoice and statement. There is no benchmark we would quote, so look at what your own practices pay on time today and start there.
How should a remake appear on a statement?
As its own line that points to the original invoice, at no charge or with the agreed fee. A remake that vanishes into the total makes a practice doubt every other line.
Should a lab charge interest on late accounts?
That is a business decision, and it has to be in your written terms before you apply it. A phone call a week after the due date is the better first step.
Sources
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