Why Medical Practices Should Use Invoice Factoring
Medical offices have to deal with some of the highest expenses of all small businesses. In order to provide quality care, you need to have your business properly staffed and the equipment needs to be upgraded with startling frequency. Because of all these factors, you can’t afford to wait on outstanding balances. Cash flow needs to be steady, and one of the best ways to make sure you have the capital you need is through invoice factoring. This process will allow you to save time and money, all while improving the quality of your services.
Collect Without the Collections
The more time you spend asking clients to pay their outstanding balances, the less time you spend helping clients and generating more revenue. Since your business is providing medical services, you shouldn’t spend the majority of your time acting like a collections officer. When you turn that responsibility over to a factor, you immediately release the burden of following up with customers regarding their payments. You’ll receive the money you are due through the invoice factoring company and then you can let someone else worry about settling the account.
When you know that money is owed to you, it’s easy to plan on spending it. However, as more and more time passes without that money arriving, your bookkeeping will start to look worse and worse. Your cash flow doesn’t care how much money is waiting in the form of invoices; it cares how much money you have on hand to spend on things like wages, utilities and basic overhead costs. Your bill collectors and employees aren’t likely to accept an IOU.
Working with a factor is the best way to solve this problem. If you can prove the creditworthiness of your clients, a financing company will be happy to buy outstanding invoices from you in exchange for a small fee. You’ll be able to collect what you’re owed shortly after the work is completed and you won’t have to wait for any customers that are slow to settle their invoices. Knowing when funds will actually be arriving can help you to budget and spend more effectively, and that will in turn allow you to see more customers and start creating more invoices to be factored.
Just because you do your job well doesn’t always mean you’re going to be paid promptly. If you’re tired of hoping that your payments will arrive soon, try invoice factoring and see how quickly you can do away with your cash flow issues.