AR Solutions in Lincoln, Nebraska Offers Advice For Handling Collections and Safeguarding Your Receivables

0
Click here for all press, reviews & features about

Now that we are in full swing of 2014, most of us have had the opportunity to evaluate our 2013, which leads to new goals, changes, more efficiencies, etc.  Many businesses are forced to deal with their accounts receivable growing out of control with slow paying or non-paying customers, and sending additional monthly statements or making calls to collect these past due balances takes time and resources. I encourage any business to focus on their core business and let a professional handle collecting their past due receivables.  Neglecting past due receivables can dramatically affect cash flow and can create expectations your company does not want.  While it may seem that it would not take a lot of resources to do this, I assure you it does.  Many times call attempts are not effective or you will need to make several attempts.  If you are busy focusing on your core business, you may not have the time to make calls at different times of the day or after normal office hours. Before you know it, 30 more days have passed and your receivables continue to grow.

According to industry-leading scoring software, only 60% of receivables on the books are collectable without enlisting a collection agency (obviously that can vary based on your industry).  Companies that can identify the 40% who need to be placed with a professional agency early on can usually get a better rate from the agency and increase their cash flow.  At AR Solutions we are consistently asked about the best time to turn an account over to collections.  That answer can vary somewhat by industry, but a good rule of thumb is when the account becomes 90 days delinquent it is time to enlist a collection agency to help collect the monies owed to you.  If you wait until the account becomes 120 days delinquent the collectability of that account drops on average by 40%!

For business-to-business or business-to-consumer collections some tips for keeping a healthy balance on your receivables are:

1. Establish a clear policy of when payment is due.

2. Use a credit application, get credit references and check them.

3. Verify that the person making the order or purchasing the product has the authority to do so if for a business.  Get a personal guarantee from an owner or principle of the company if incorporated.

4. Secure a signature on any change orders authorizing the work and any additional fees.

5. For large orders and/or new customers, secure a deposit on the work to be done.

6. Gather all contact information you can at the time of the sale.

Gathering all of this information may seem like a lot of work, and possibly intrusive to some customers, but it is necessary if you want to safeguard your receivables.  These are just some tips to use and may not be applicable for all businesses, but establishing a habit of “If payment is not made, how will I contact them to get it?” is essential.

Regarding Healthcare collections, the biggest concern we have heard recently is due to the affordable care act. More insurance plans have high deductibles and healthcare providers are concerned with how to collect those larger deductibles.  Some information that is important to get at the time of services is:

1. Any and all contact information including address, home phone, cell phone, date of birth, email address, place of employment, emergency contact and spouse name, date of birth, cell phone, and place of employment.

2. Guarantor if patient is a minor.

3. Signature of patient/guardian acknowledging that they have read and understand all of your policies, medical necessity of services, HIPAA, payment policy, finance charges, etc.

4. Posting a sign that Co-Pays are due at the time of service.

While these may seem like obvious things, they are vital to getting the best rate from a collection agency and for them to accelerate the collection process to keep your business running healthy.

At AR Solutions we anticipated this problem and can provide several solutions for healthcare providers to collect these higher deductibles.  We would be happy to give any business a free consultation on their current collection practices.  To find more information on AR Solutions or to schedule a free consultation on your current collection process, visit www.arsolutionsinc.com, email aaron@arsolutionsinc.com or call (402) 817-3929.


by Aaron Newell, President/CEO

402-817-3929

www.ARSolutionsInc.com

Click here for all press, reviews & features about