Case Study #3: Pre-approving clients for a payment plan

Case study #3: Pre-approving clients for a payment plan.


According to an article by David Lummis, “How retailization is changing the veterinary business” written for Pet Product News, February 2020, … “To a substantial degree, lower-income households have been left behind by the premiumization trend that has driven up prices across every area of the pet market including health services…

… Driving expansion in pet and non-pet channels alike is e-commerce, as brick-and-mortar vet clinics are a traffic-building proposition with which e-tailers like Amazon and Chewy, putting aside the latter’s affiliation with PetSmart, cannot compete. Taken together, these trends virtually guarantee that the veterinary venues of tomorrow will look quite a bit different than those of today.”

What is the independent practice to do today with the pressures of consolidation and big box stores starting to open in-store clinics?

Offering your clients more payment options will enhance your competitive edge to help offset this competition. Payment options like payment plans, prepayment plans, pet savings accounts and wellness plans create goodwill and increases cash flow and profits. By advertising payment options you will create a distinct advantage over your competition.  If you are apprehensive in offering payment options there are tools to help you qualify your clients. The same tools that third party financing companies use your practice now has access to.

The practice in our Case Study #3 wanted to offer payment plans to there clients but did not want to send their clients to a third party finance company like CareCredit, that takes 5 to 15% of the practice revenue. By using VetBilling’s Credit Score Recommendation (CSR) tool they were able to set their own terms and conditions to qualify their clients for a payment plan, which in turn allowed them to help more pets, which also increased staff morale.

The CSR is a quick automatic soft credit inquiry, the credit inquiry does not affect or show on the client’s credit report. Based on the client’s past credit history and how timely the client paid their bills, the CSR will return a letter grade from “A” to “G” along with a recommendation on the number of months the payment plan should be and the amount of the down payment the clinic should request. This is only a recommendation, the practice can set-up their own policies based on the CSR score, which this practice in the case study did, asking for 50% as a down payment.

We recommend that the amount of the down payment should correlate to your operating cost per minute times the number of minutes you spend with the client or the time to complete the treatment plan. For example, for a 60 minute procedure (actual treatment plan plus post and pre-op time) where the treatment plan cost the client $1000.00 and your operating cost per minute is $5.00, the clinic should collect at least $300.00 for the down payment, 30%. This covers all the direct costs, COGS and payroll for DVM and staff, rent and all other expenses.

In the Case Study, the clinic discovered clients that do not have a great credit history still satisfied their payment plan obligation. This allowed them to feel confident in advertising to their clients that payment options like payment plans were available.