In order to have a successful business, you need to have a healthy cash flow. Many businesses focus on new revenue and tend to overlook unpaid accounts. However, every business no matter how big or small at some point has to contend with overdue or unpaid accounts. This forms part of the revenue management process of a business. 

In this article, we will be taking a closer look at how you could better manage your revenue and professional medical billing solutions by implementing a few simple steps. The last few years have taught us that people and businesses do not have as much disposable income as they used to have. This has seen a steep rise in late payments on accounts and non-payment of bills. As healthcare practitioners in private practice, we do have to understand the economics of the time. However, we also have the fundamental right to collect funds that are due to us. 

Debt collection or revenue management is a difficult task for anyone. A professional medical billing solution helps to transform your monthly 3-day ‘update the spreadsheet, and then try to contact everyone’s collections trauma into an effective, instant and reliable method for managing your debt recovery. The simple truth is that debt collection is like the cousin nobody wants to talk about. Every private medical practice has to have a debt collection process and understand the benefits of professional medical billing software. Most practitioners do not enjoy this aspect of their business. But it is vital without it businesses bleed cash flow so how do you implement a system that maintains your revenue and your cash flow?

4 Biggest Obstacles in Revenue Management Faced by Private Practices?

Medical billing solutions and effective revenue management should start from the moment you open your practice. Small businesses are known for moving very quickly when they open up. And the issue with this is that it often comes at the expense of critical and crucial small details, such as setting up a streamlined way of doing things that everyone can follow. 

You need to take time to create your practices' internal processes. You need to be able to communicate these easily to your staff when you start hiring or expanding your team. You also need to build and clearly communicate your external policies, such as payment terms, cancellation policies, etc. This is to ensure that your clients know what your policies are and you can manage their expectations.

1: Set Clear Terms, Processes and Expectations

• Slow down and plan your processes, you don't need to get everything done immediately. Take one process at a time and iron it out from start to finish. Think about the following, what is your cancellation policy? What is your invoicing process? Are you going to bill daily, weekly or monthly? When are your invoices going to be due? What are your payment terms? 5 days, 7 days or a month? What happens if a client does not pay your invoice? All of these things build the foundation for your revenue management process in your business. 
• Get input from others such as your mentor as they have experience and will see things that you might not have considered. 
• Document your process, you need to write up clear process documentation for each area of your business. Always ensure that you have the latest version of the process documents somewhere safe but easily accessible. 
• Ensure that your terms and conditions as well as your intake forms cover your entire process. Your terms and conditions contract guides the expectations, it’s what makes sure your clients know what to expect from you. This contract needs to cover everything about your invoicing process, payment terms, debt collection policy, etc. without a clearly drafted contract, you could find yourself in a situation where clients' expectations are not managed or unpaid accounts are not collected on.

2 : Have a Clear Invoice That Highlights Payment Due Dates and Methods of Payment.

We have all at some point received an invoice from someone, where the only thing clear on the invoice is that we owe money. We are not sure how much is due overall, when it’s due, or even how to pay it. Don’t be that practice, if it’s hard work for your client to pay you, it’s likely they won’t. Make sure that your invoices are professional, well laid out, clear and easy to read. Your invoice should include all the following

• Itemized billing with a short and simple description next to each item so that it is clear what your client is paying for and how much each item costs.
•  A very clear grand total at the bottom of the invoice. 
• Have your payment terms clearly stated on your invoice how to pay you, if you have various payment methods you need to have a description for each. For example, if paying by EFT, include your banking details and what the clients' payment reference needs to be. 

3: Time Management and Resource

A very common problem when it comes to revenue management and professional medical billing, especially in smaller or newer practices is not having the time to do admin or follow up on debts. Even though you have the best of intentions, it becomes very easy to procrastinate because you are too busy. Let’s be honest, you would rather be doing anything else than chasing customers to settle their accounts. 

The hours and days after an account has become overdue are critical. The longer it takes to follow up on an account the greater the chances are that you will not be paid and are not going to recover those funds. Remember that trying to do everything yourself is not the most productive use of your time. If you are busy seeing patients, you don’t have the time to follow up on accounts. If you are not equipped for prompt debt recovery, you need to figure out how to correct that very quickly. The worse your bad debt book becomes the harder it is going to be to collect the funds and worse your cash flow will become.  

• Plan and build good habits, make sure that you take a couple of hours each week to go through the outstanding accounts and take the necessary action that you need to get them done. Taking these small steps into consideration will free up sometime later in the day.
•  Use automatic reminder notices. These can be set up and created using professional medical billing solution or CRM. These reminders can be programmed to follow your defined revenue management process and ensure that clients are notified if their accounts are overdue.
• If you have a team, assign a dedicated person to the debt collection side of your revenue management process. The more people involved in the process the more diluted it becomes. A dedicated person will have knowledge of each account from end to end and can give you answers as you need them.

4: Tracking a Bad Debt Portfolio

You need to be able to track your bad debts, irrespective of whether you have five clients or five hundred clients. You need to know exactly what is happening with your revenue. Sometimes the sheer scale of your client base can be the biggest obstacle you face in regards to revenue management. The more people there are to invoice or follow up on, the harder it is to reconcile payments and keep track of the outstanding debts. 

In our experience, this is what results in customers or invoices slipping through the cracks. Because either you forgot to invoice them or simply did not realize the account had fallen behind and haven’t followed up.

• Again making one person responsible for accounts is a great way to ensure that nothing is missed. 
• Follow strict timelines that include a very clear process for revenue management and debt collection. If your invoicing process says you invoice on a Friday, you need to ensure that your invoices go out on time. This is the first sign to your clients that you are serious about your terms and have professional medical billing etiquette.
• Follow through on your terms and conditions. Should your payment terms state that accounts have to be paid within 30 days, if payment has not been received your collections process should kick in. The first notice should be sent to your client. If your terms state that services will be suspended due to non-payment, you have to follow through. If you don’t you are inadvertently encouraging that client’s bad behaviour.

How Professional Medical Billing Solution Can Improve Your Revenue Management?

The most effective way of managing your private practice is to invest in billing software or a medical billing solution. Yes, you can use Excel and Word to do invoices and statements, but this is time-consuming and makes it difficult to keep track of revenue, expenses and overdue accounts. Professional billing software ensures that your invoices are professional and include all the information that you need to accurately issue an invoice to your patients. You are able to assign payments to invoices and send clients receipts once they have settled their accounts.

With a medical billing solution or software, you are able to assign payment terms and messages that need to go out to overdue accounts. These rules can be set to ensure that overdue notices are triggered and sent to clients based on the times and payment terms that you have set. This saves you and your staff time, and in the long run, it saves you money.

Good medical billing solution or software will also assist with appointment management, as well as have the ability to send appointment reminders to clients. This helps to ensure that clients arrive for their appointments. Again this helps to give your practice that professional feel with the added bonus of reducing the number of missed appointments and no-shows which improves your revenue.

When you use software you retain control of your business. You can manage everything from your intake forms, appointments and invoice to your unpaids process and reporting.

Conclusion

At the end of the day, you need to look at what would be best for your business. But what I have learned in my years working with healthcare professionals is that none of them went into private practice and said “Oh I love admin”. I can tell that you even less said “I love debt collection”. A medical billing solution allows you to have control over the admin and revenue management in your practice and gives you more time to focus on the other aspects of your business.

If you are struggling with or simply need some assistance with your admin or are looking to have a practice management solution for your practice book an appointment with our team. We will go through each of the processes with your practice and assist you with setting up a professional medical billing solution.