Archive for July, 2011

Three Reasons Why Allied Health Staffing Agencies Should Factor Their Invoices

Thursday, July 28th, 2011

Although invoice factoring is a great alternative funding option for any type of business, it’s an especially good allied health agency financing choice for agencies that staff temporary professionals in hospitals, clinics and nursing homes. In fact, selling invoices to a factor allows allied health staffing agencies to get paid quicker without going into additional debt. Furthermore, agency owners who factor their invoices will have enough liquid capital on hand to make weekly payroll and keep up with payroll tax obligations. Still not convinced? Check out the Three Reasons Why Allied Health Staffing Agencies Should Factor Their Invoices:

Reason #1: Stop Waiting to be Paid.
Instead of waiting 30, 60 or even 90 days to receive payment staffing in allied health professionals at a medical facility, temporary staffing agency owners can sell their invoices to a factor and receive cash within 24 hours of issuing an invoice. All a factoring firm needs to advance cash is a copy of the invoice and proof that the employees worked the shifts listed on the invoice. This is easily accomplished by supplying copies of signed time sheets.

Reason #2: Leverage the Credit of Your Customers.
Allied health staffing  funding is a great option for companies who are either just getting started, have less-than-perfect credit or are going through a growth spurt. Rather than make a credit decision based off of the staffing agency’s credit or the business owner’s personal credit, allied health agency funding firms determine their credit limits after reviewing the payment trends of the agency’s customers. This is usually done by using a third-party credit bureau, and it’s done in a non-intrusive way, giving companies the ability to secure allied health agency financing based off of their customers’ credit rather than their own.

Click here to find out the last reason Why Allied Health Staffing Agencies Should Factor Their Invoices.

Factoring for Medical Billing Companies – FAQs

Tuesday, July 26th, 2011

A lot of questions can come up when a business owner starts researching medical billing funding solutions—the idea of selling their invoices to a factor or medical billing funding agency.  This article addresses some of the more frequently asked questions:

What differentiates a factoring firm who funds medical billing companies from a bank?

First and foremost, since medical billing factoring is not a loan, there is no debt on your medical billing company’s balance sheet. Moreover, factoring firms have the ability to make a quick decision regarding your medical billing funding options, while banks may take weeks—even months—to approve a loan.

Furthermore, factors determine lines of credit based on the creditworthiness of your customers, while banks focus on your company’s financial history and cash flow. In other words, a medical billing funding agency looks to your company’s future while banks place emphasis on your company’s past.

How long does it take to be approved for medical billing funding solutions?
In general, a medical billing funding agency will begin its due diligence process after receipt of a signed contract. This process can last anywhere between 1-5 business days, and money is moved at its conclusion. Thereafter, a medical billing service can receive funds in as little as 24 hours within verification.  See our medical billing factoring process and learn our medical billing funding options can benefit your medical billing business.

Click here to read more Frequently Asked Questions and Answers related to factoring for medical billing companies.

What to Tell Your Customers When You Are Working with a Nurse Staffing Factor

Friday, July 22nd, 2011

Hiring an invoice funding company can be an unnerving process for nurse staffing agency owners because they may be worried about how their customers will view the new financing relationship. It’s a natural concern to have; however, working with a nurse staffing account receivables factoring company doesn’t have to be scary. This article gives three unique responses that agency owners can give to their customers to help explain a new account receivables factoring arrangement.

Nurse Staffing Account Receivables Factoring Response #1:
Invoice factoring is just an alternative form of financing.

As a result of these difficult economic times, traditional lenders (i.e. banks) are not extending new credit lines, and/or they are increasing interest rates. This makes it extremely difficult for a temporary nurse staffing agency to obtain traditional financing. At the same time, the demand for temporary nurses has sky-rocketed.

Savvy staffing agency owners are turning to alternative sources of financing to ensure that their businesses have a positive cash flow. In short, working with a nurse staffing account receivables factoring firm proves that the agency is fiscally sound and prepared to weather the down economy. Moreover, the factoring arrangement will allow my agency to continue to grow without hindering our ability to provide quality nurses to your facility.

Nurse Staffing Account Receivables Factoring Response #2:
Our current nurse staffing relationship will go unchanged.

Even though a factoring company will be managing my staffing agency’s receivables, the business relationship that I have with your medical facility will not change.  We will continue to provide you with excellent nurses and invoice as usual. Should you need one of our supplemental nurses to fill a staffing gap, feel free to contact our agency directly, and we will find a nurse to fill the position.

The only thing that will change on your end is the remittance address, as payments should now be sent directly to the factoring company.

Click here to find out what the third nurse staffing factoring response is.


Healthcare Staffing Factoring – How Does it work?

Tuesday, July 19th, 2011

There is a common misconception that healthcare staffing factoring is a complicated type of financing. In actuality, the factoring process is actually quite simple. All it takes is five easy steps…

Step One: Sell Healthcare Staffing Agency Invoices to a Factor

Technically, the first step in the healthcare staffing factoring equation happens when the agency’s customer (presumably a medical facility) has a shift open and requests the agency to fill that position. Once an agency employee works the shift, the agency is able to invoice the facility for the hours worked. At any time after the agency has invoiced the medical facility, it also has the ability to sell the invoice to a healthcare staffing factor.

The actual sale of the invoice is usually accomplished electronically, in that the agency emails or faxes a copy of the invoice along with corresponding signed timed sheets to the healthcare staffing factoring agency. The invoices and timesheets must be accompanied by an Assignment of Accounts Receivables form, which lists out all the invoices the agency wishes to sell to the factor and includes a signature from an authorized employee of the agency.

Step Two: New Debtor Credit Check

Once the healthcare staffing factoring firm receives the schedule of invoices and timesheets, an account manager reviews it for new customers. If there happens to be new customers (a.k.a. debtors), the account manager will conduct a brief credit review in order to establish a line of credit for that debtor. Typically, the credit review process can be completed within 24 hours of receipt. Once a new debtor has been approved for funding, the account manager will notify the debtor’s accounts payables department that when they receive invoices from the agency, the payment should be remitted directly to the factor.

If there are no new debtors included with the schedule, then the account manager simply moves on to step three of the healthcare staffing factoring process, which involves verifying the submitted invoices.

Want to find out the last three steps? Click here: How Does Healthcare Staffing Factoring Work?

What Sets PRN Funding Apart from Other Healthcare Factoring Firms?

Friday, July 15th, 2011

How does PRN Funding’s healthcare factoring services differ from other factoring firms’ services?

In a nutshell, PRN Funding is known as the healthcare factoring experts. Temporary nurse staffing agencies, medical transcription services, medical coding services, and medical supply companies are just a few examples of healthcare businesses that we specialize in account receivable funding.

  1. PRN Funding works exclusively within the healthcare industry. If you sell products or deliver services to healthcare facilities, there is nobody better than us.
  2. Ultimate in factoring flexibility – You choose when, who, how much and how long to factor your invoices.
  3. Cash advances on your qualified receivables within hours of verification.
  4. No fixed-term contract to sign; you can stop or start factoring at any time.
  5. Collections are performed in a professional and productive manner, allowing your staff to focus on higher value-added activities.
  6. Real-time access to our online accounting and reporting system 24/7/365.
  7. No automated attendant-When the phone rings during business hours, a person answers.
  8. Access to a personal account manager. Accounts are assigned to one specific person who knows your business and your customers inside and out.

Don’t take our word for it! Read healthcare factoring success stories from some of our happy customers!

Common Customer Reactions to Factoring

Tuesday, July 12th, 2011

If I use a factor to fund my invoices, what will my customers think?

This is a concern of many companies who are considering factoring as a finance strategy. However, establishing a credit line is a positive statement–not a negative statement–to make to your customers. Not all healthcare companies qualify for lines of credit.

Selling accounts receivable to generate cash is a finance method used by very large corporations worldwide, with the factoring service provided by the largest banks in the nation. In the past, only large corporations with millions of dollars in receivables per month qualified for factoring. Often factoring companies refused to work with smaller companies or companies with a large number of small invoices. Because factoring is widely known, your customers will view this as a positive ability on your part to secure financing, not as a problem with cash flow.

It’s likely that many of the healthcare institutions that you service already deal with factoring companies and may not even be aware of it. Sometimes payments for invoices directed to a P.O. Box are actually going to a factor. Shell Oil, Georgia-Pacific, IBM and other substantial companies factor millions of dollars of their accounts receivable every year.

Financing obtained through the sale of accounts receivable factoring is most often used by a firm to expand and take on larger projects; not merely for cash flow or payroll. Now that this service is available to companies like yours, you can enjoy both the perception and the reality of being a growing company, moving forward.

Still worried about how your customers will react to a factoring company?
View PRN Funding’s What to Tell Your Customers page to learn how to talk to your customers about factoring.

How Medical Billing Companies Can Avoid the Double Credit Crunch

Thursday, July 7th, 2011

In this economy, many service-oriented small businesses are struggling to obtain cash on two fronts – (1) Acquiring or extending a line of credit and (2) Getting their customers to pay in a timely manner.

Outsourced medical billing providers are just one type of business that is being affected by the “double credit crunch.” On the one hand, banks have tightened up on their lending criteria, and most are slashing credit lines instead of extending them, which means the likelihood of a medical billing provider securing bank funding is slim-to-none. On the other hand, even though an outsourced company’s main job is to bill insurance companies correctly so physicians (their customers) get paid quicker, those same physicians are oftentimes notorious for stretching out their payables.

Fortunately, there is an alternative financing option that can help speed up the payables process.

Medical billing accounts receivable factoring is the conversion of receivables into cash by selling outstanding invoices to a factor. A viable option for medical billing companies in the early stages of business development and /or during rapid growth, accounts receivable factoring is a financial solution that gives medical billers immediate cash to manage operations more efficiently. Here are some additional key concepts about this practical financing alternative.

Medical Billing Accounts Receivable Factoring is:

  • A way to fill the gap between when your company provides outsourced billing services and when the physicians pay. Simply put, medical billing invoice factoring can turn weeks into hours or days.
  • Based on your customers’ credit history, not yours. If your company is providing billing services to a creditworthy physician’s office or medical facility, then your business is a good candidate for accounts receivable factoring.
  • A simple, fast method to sustain your “business as usual” relationship with your customers. Your company can continue to provide medical billing services to your customers with a set-term payment; but with accounts receivable factoring, you no longer have to wait to be paid. By working with a factoring firm, your company can easily obtain cash advances of 80% of the invoiced amount. Cash can be obtained within hours and as often as needed.
  • One of the oldest methods of providing working capital. Dating back 4,000 years, receivables factoring has long been used as a feasible and easy way for businesses to obtain cash flow in order to cover expenses while experiencing growth.
  • A chance to obtain cash without providing personal collateral or increasing interest expense. Invoice factoring is not a loan and does not “muddy up” your medical billing company’s balance sheet. You do not accrue interest or penalties. The medical billing factoring fee is clear and objective; it is based on the size of the invoice, the length of time it takes to collect the payment, and the creditworthiness of your customers.
  • An opportunity to build your outsourced medical billing company’s credit: With adequate cash flow, you can use money from accounts receivable factoring to clean up your debts as well as pay overhead, salaries and invoices. This will improve your credit history and make it easier to obtain credit from vendors and other financial institutions in the future.

By working with an accounts receivable factoring company, your company’s cash flow problems can be solved. In most cases, a medical billing company can receive the majority of what’s owed to them within hours of selling their invoices to a factor. Factoring for your medical billing company will help you avoid falling prey to today’s “double credit crunch” that so many other small businesses are enduring as a result of the current economic climate.

**NOTE: This article is a re-printed version of what was also published on FactoringInvestor.com.

How Groupon Makes Factoring Invoices Look Cheap

Tuesday, July 5th, 2011

Tracy Z wrote an interesting post on FactoringInvestor.com comparing and contrasting the cost Groupon vs. the cost of invoice factoring.

Rightfully so, Tracy defined the marketing lure of Groupon as “marketing with no upfront fees.” For cash-strapped business owners looking to make more sales, free advertising sounds like a good deal–That is until you break down the numbers:

  • 50% discount to customer
  • 25% fee to deal provider
  • 25% net to business owner

In essence, the business owner only makes 25% AND they have to wait to get their portion, in installments, over time.Tracy outline a simple example, where 1/3 of the business owner’s profits was paid in 5 days, 1/3 in 30 days and the balance within 60 days:

$100,000

-$50,000 discount

-$25,000 fees

=$25,000 received by business owner (33% or $8,333 immediate advance, with the remaining $16,667 paid out over 60 days.)

Then Tracy used the same scenario as though the business owner were factoring:

$100,000

-$5000 factoring fee (average 5%)

=$95,000 received by business owner (80% advance or $ 80,000 upfront, with the balance less the fees received once debtor pays in full).

Pretty interesting comparison, huh?

Click here to read the article Tracy referenced in her post: Why Groupon is Poised for Collapse.