Collecting an overdue bill from a healthcare client is a delicate dance: You want your money, but you don't want to alienate a customer. According to healthcare PR agency executives, the secret to maintaining a good business relationship with a client is to first discover the reason for the client's failure to pay by expressing concern for his well-being, rather than for your money.
Typically, a client will offer one of three explanations for not paying: He's been remiss in making the payment (in which case a gentle prod from you should do the trick); he has a problem with the bill that he's been reluctant to broach (in which case you resolve the matter as quickly as possible); or he's having financial difficulties (in which case you work out a payment schedule).
"If polite attempts don't work, press harder-just how hard depends on how valuable the client is to you," said Julie Wang, CEO of Wang Associates, a healthcare PR firm in New York. "If you're eager to retain his business, tread gently, with a veiled threat to curtail future dealings. If the client is not that important, you can explicitly threaten to take legal action if the bill is not paid right away."
Prevention Is Key
One way to not get stiffed on billings is to institute a client-screening process aimed at identifying those clients who pose a risk of not being able to afford services, said Sharon Anderson, healthcare manager at Cohn Associates in Boston.
The creation of an effective client screening process entails three steps. First, execs must decide when to screen potential and existing clients for risks associated with accounting malpractice claims.
Second, staff must accumulate relevant information such as financial problems or bankruptcy with regard to their clients and assess the nature and the degree of risk associated with each client.
Third, account managers must objectively assess their own qualifications to ensure that they and their staff possess the necessary skills and training to take on the client.
With respect to potential clients, the screening process should be undertaken immediately. In today's economy, it can be extremely difficult to retain new clients, said Wang, and there is a natural and understandable reaction to welcome a new client with open arms.
With that in mind, healthcare PR execs should consider the following circumstances when evaluating a client:
The client maintains weak or nonexistent internal controls;
The client's accounting department lacks organization;
The client fails to maintain proper financial records;
The client routinely fails to file tax returns or other mandatory reporting documentation on a timely basis;
The client has incurred an excessive turnover in PR agencies; or
The client's key personnel do not possess the requisite experience and/or training to fulfil their duties and responsibilities.
The client is frequently involved in litigation. A client who has a history of being involved in litigation can be extremely dangerous for several reasons. First, a client who is continually embroiled in litigation, as either a plaintiff or a defendant, may not be an ethical business person. Second, a client who is either involved in or about to become involved in a lawsuit may implicate an agency.
Last, a client who is involved in a dispute with a government regulatory agency can lead to litigation and negative public attention being directed toward the agency. As a result, agencies would be best advised to avoid over-litigious clients.
Using Your Staff As A Conduit
Another way to ensure payment is to decide upon payment up front, said Gil Bashe, vice-president of healthcare division at Hill & Knowlton in New York. For example, account managers should discuss with clients during opening presentations, the costs involved and how and where billing should take place.
"Good client management skills means working around the client, if they want to billed quarterly or bi-monthly then you should do it," said Bashe.
Bashe also suggested that all staff members should be become well-versed in how the financial department bills and to hire financial accountants who understand the PR business, not just the numbers.
"We are in a very special business and it requires much more client service," said Bashe. "Every employee needs to understand that."
(Wang Associates, 212/675-4500, Hill & Knowlton, 212-876-1000)