How Medical Receivables Factoring Can Improve Your Cashflow
As a medical practitioner, you need to find ways to provide consistent service to your patients, regardless of the state of your income. Paying medical bills, even with insurance, is almost always done through accounts receivable, so almost all of your income is delayed and unpredictable, even though your services are expected to be steady and consistent. To immediately fix any problems that you’re having with accounts receivable, start using medical receivables factoring to turn those stagnant invoices into a quick and reliable cash flow that you can use to pay your overhead or to invest in new equipment.
Medical receivables factoring is essentially the practice of taking any open invoices that you have with patients and then selling them to a factoring company. The factoring company is responsible for collecting payment on the invoices, but they’ll pay you almost the entire value of the invoice immediately.
This process has great benefits for healthcare practices of any size. If you’re growing quickly, factoring is a very flexible process and can adjust as you grow. Simultaneously, factoring allows you to have enough of a predictable income that you can plan for and organize your practice’s growth. Without that reliability and predictability, you’ll have no idea when it’s safe to invest in a larger space or in better equipment.
Medical receivables factoring also works with Medicaid or Medicare, not just standard payments. This is a huge benefit since so many of your patients are going to be paying through large insurance programs, making your income more irregular than it would be in any other industry.
Of course, one of the greatest benefits of factoring is that you can turn your accounts receivable into fast cash in about a week. If you’re running low on cash but need some immediately to pay for treatment supplies and equipment, the process of getting money from a factoring company for the first time is so fast that it can save you in a hitch. No other loan process has this short of a turnaround time, so know that if you’re considering applying for more traditional loans to make up for an occasionally slow cash flow, it may take several months or longer to complete the application process and get the money that you need.
With all of this being said, the most important thing that you can do for your patients is to be ready for them. Use the factoring process so that you have a steady cash flow and can provide quality treatment at a moment’s notice.