Owners tend to treat payment plans and discounts as two versions of the same concession. They are not, and the difference decides whether offering one is sensible.
A discount reduces what you are paid, permanently, on every case it touches. A payment plan reduces nothing — it changes when the money arrives. You are lending convenience, not giving up margin, and the two have entirely different costs.
| Costs you | Recovered by | |
|---|---|---|
| 10% discount | A tenth of the price, permanently | Nothing — it is gone |
| Instalments over 6 months | The use of the money, and some default risk | Time, and the cases it converts |
What it actually costs
Three things, and only one of them is obvious.
- Cash timing. Money arriving over six months is not money you have now, and your rent does not instalment. This is the cost that bites a clinic already tight on cash — offering plans while you are short is how a busy practice runs out of money.
- Default. Some proportion will stop paying. That proportion is small and it is never zero, and if you have never measured it you are guessing.
- Administration. Somebody notices a missed instalment, contacts the patient, and has an awkward conversation. That is a real recurring cost and it lands on the person least equipped to enjoy it.
The third is the one that quietly kills in-house plans. A clinic offers them, nobody owns the chasing, arrears accumulate for eight months, and the eventual conclusion is that "payment plans do not work" — when what did not work was having nobody responsible for them.
What it buys
One thing, and it is worth being precise: it converts people who wanted the treatment and could not fund it this month. That is the whole population.
It does not convert someone unconvinced by the treatment. It does not convert someone who thinks the price is wrong. Offering a plan to either produces a plan, not a patient — and often produces the defaults.
Which means plans belong where the price is genuinely large relative to what your patients earn, and where the clinical case is already accepted. On a routine appointment they are administration with no upside.
The rule that keeps it safe
For treatment delivered in stages — orthodontics, implants, a course of anything — align the payments with the work rather than with the calendar.
A plan where the patient has paid 30% and received 70% of the treatment is an unsecured loan you did not intend to make. A plan where payment stays slightly ahead of delivery is a payment schedule. The same instalments, ordered differently, and one of them cannot go badly wrong.
Example
The same treatment, two schedules
- Course of treatment: 6 visits
- Calendar plan: equal monthly payments over 6 months
- By visit 4 the patient has had 67% and paid 50%
- Staged plan: deposit, then a payment at each visit
- By visit 4 they have had 67% and paid 67%
- If they stop, one of these leaves a hole and the other does not
This does not apply to a single procedure delivered on day one — there the work is done and the plan really is credit. That is exactly the case where third-party finance is worth considering, because the risk moves off your books.
In-house or third party?
| In-house | Third-party finance | |
|---|---|---|
| You are paid | Over the term | Up front, less a fee |
| Default risk | Yours | Theirs |
| Admin | Yours | Mostly theirs |
| Patient is refused | Rarely — you decide | Sometimes, and awkwardly |
| Regulation | Varies; consumer credit rules may apply | Theirs to hold |
The last row is the one to check before doing anything. Offering credit to consumers is a regulated activity in many countries, and whether a staged payment schedule counts depends on how it is structured and where you are. This is a question for your accountant or a local adviser rather than for an article — including this one.
If you offer them, offer them properly
- Decide which treatments qualify, by price rather than case by case at the desk.
- Take a deposit. It is the single largest predictor of whether a plan completes.
- Align payments with delivery for staged work.
- Put the terms in writing, in the patient's language, before the first payment.
- Give the arrears list a named owner and a fixed day.
- Measure completion rate and average arrears age after six months.
The last step is what turns this from a policy into a decision you can revisit. Most clinics that abandon payment plans never measured them; they remember two bad cases and generalise. Two figures — what share completed, and how old the outstanding money is — settle it in either direction.
The ageing view is the useful one, and it applies beyond plans: what is owed, by age rather than as a total is one of the few numbers that prompts an action at each stage.
Common questions
- Is a payment plan the same as a discount?
- No, and the difference is the whole decision. A discount permanently reduces what you are paid on every case it touches. A plan changes only when the money arrives — you are lending convenience, and what it costs you is cash timing, some default risk and the administration of chasing.
- How much deposit should a clinic take?
- Enough that walking away costs the patient something, which in practice means enough to cover what you spend before the work is done — consumables, lab, the slot itself. There is no universal percentage worth quoting; work it from your own direct costs on that treatment.
- What stops a payment plan becoming a loan?
- Aligning payments with delivery on staged treatment, so what has been paid stays slightly ahead of what has been received. A patient who has had 70% of a course and paid 30% is holding credit you did not decide to extend. For single procedures delivered on one day, that alignment is impossible and third-party finance is worth considering instead.
- Do payment plans need to comply with credit regulations?
- Possibly, and it depends on how the plan is structured and which country you are in. Offering credit to consumers is regulated in many places, and a staged schedule may or may not fall inside it. Check with a local adviser before you launch, not after.
- How do I know whether they are working?
- Two figures at six months: the share of plans that completed, and the age of what is still outstanding. Clinics that abandon payment plans have usually never measured either — they remember two bad cases. Those two numbers answer it honestly in whichever direction the answer falls.
Read next
The arrears list, with a name on it.
Instalment plans in Clinic+ sit on the patient record with what is paid and what is left, so a missed payment is visible rather than discovered — and the ageing view shows what is owed by how old it is instead of as one number nobody can act on.
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