How can your medical practice stay afloat when it takes 30, 60, even 120 days for your customers to pay?
The truth is that until you’re running an established practice, it’s very difficult to maintain a positive cash flow.
One way around this problem is a process called money factoring.
Money factoring allows you to maintain a consistent cash flow in your business, regardless of how long it takes a customer to pay.
Here’s how it works:
First, you’ll partner with a factor, or a company that offers cash advances based on unpaid invoices or your accounts receivable.
Instead of evaluating the creditworthiness of your business, the factor will look at the credit worthiness of the patients that owe you money.
Depending on their credit, the factor will then advance you up to 90% of the outstanding invoice total. Instead of waiting weeks or months to get paid, you can get paid in a matter of days.
Factors charge a factoring fee for their services. These fees usually end up being more expensive than a loan from a traditional bank, but for new medical practices or those struggling to make ends meet, factoring is still an effective way to stay in business.
To learn more about doctor credentialing, insurance, coding, outsourcing, and everything you need to establish a successful healthcare practice, follow all of Sherlock Doc’s adventures on the DoctorsBusinessNetwork.com or Doctors Business Channel on YouTube!.
