While a sporadic unpaid receivable can be adjusted in the business operating expenses, too many of such debts put pressure on the cash flow. If the total cost of the unpaid invoices is substantial enough to justify the cost of contracting out a collection agency, it is your best shot at getting your money from defaulting customers.

Strategies for choosing a collection agency

A debt collector will be working for you and it should respect your policies and customer service standards. The way clients see it, the collection agency is an extension of your business and any impressions they form will impact your customer relationships. Therefore, you should evaluate a few important points while picking out a collection agency, such as:

* Familiarity working for similar business size and type: Look for a collection agency that has worked with small and home-owned businesses and how they operate.

* Experience with collecting from similar businesses: A collection agency that has handled customers often seen by businesses of your size and type has a better probability of succeeding. Individual defaulters and business debtors are completely different and need dedicated handling.

* Skip tracing: Sometimes, customers shift houses without leaving a forwarding address or get their phone lines disconnected. Collection agencies include professional skip tracing services – accessing numerous databases – to pin down the whereabouts of evasive customers and remind them of what they owe.

* Collection tactics followed: Verify the collection agency’s collection tactics. If the agency has a good success rate from sending out letters to debtors, peruse them yourself to ensure it complies with the Fair Debt Collection Practices Act. In doing so, you safeguard your client relationships. Respectfully yet resolutely worded letter can get customers to pay the debt and also carry on doing business with you.

* Errors and omission coverage: Collection agencies and hiring businesses are insured from liability by the Errors and Omission insurance if disgruntled debtors go to court over the tactics employed to collect the debt.

* Licensing issues: The collection agency should have the legal right to collect debts in locations occupied by the debtors. Or the agency and your business may have to face charges of unlawful collection without a license.

* Collection agency charges: Debt collection agencies offer two pricing options – fixed fees or contingency rates. The contingency rate is a percentage of the total debts collected. It is recommended that you do some math with the collection agency’s success rate and contingency rate before picking the pricing option. Calculate the charges in both scenarios – fixed versus contingency, and select the one that falls more economical.

Bad debts weigh down every business but they can cause more damage to home and small businesses that do not have the necessary resources to keep them going when strapped for cash. Collection agencies are a rational choice as even after deducting their fees, you end up getting a sizable percentage of the collected amount.

Daljeet Sidhu. Read Collection Agencies advice. Compare Commercial collections quotes. Buy leads.

Once thought of as untraditional, tighter lending standards have forced businesses to take a closer look at how factoring — the process of selling a discounted invoice to a third-party — can provide operating capital with no loans, no banks and no debt.

Increasingly, it is thought of as a viable
alternative. Small, medium and large businesses use it every day.

Still, there is lots of mystery and confusion about it. Factoring has been used for centuries and is one of the oldest forms of financing.

There are many advantages, but for businesses that need quick cash, there is one main benefit: Factoring provides immediate cash to companies that can’t wait 30, 60 or 90 days for clients to pay their invoices.

Many businesses can’t wait, and need the cash immediately. That’s where factoring comes in. You get advance payment for the invoice. And now you have the operating funds you need to expand your business, meet payroll and cover other business expenses.

There are many reasons businesses use it:

*Get working capital
*Relieve stress from no-pay and slow-pay clients
*Fill more orders
*Increase sales with flexible funding
*Take advantage of vendor discounts
*Fund payroll and taxes
*Extend credit to customers on large orders
*Buy equipment or inventory on demand

The Differences Between A Factor And A Business Loan

It’s important to point out that this is nothing like a business loan. You don’t have to qualify; generally, there isn’t a concern about your credit, but rather the financial health of the customer paying the invoice.

That’s what makes this so ideal for small businesses. There is no debt, and the process is usually quicker at just 24 to 48 hours than a bank loan.

How Factoring Works

You produce two invoices; one invoice is sent to send the customer and the other is sent to a factor. The factor will pay you the pre-arranged advance amount on your invoice.

The customer pays your invoice and the balance of the payment is paid directly to you, minus a pre-arranged fee.

Is Factoring Right For Me?

To find out if it’s for you, answer these questions:

Would more working capital offset operating expenses?
Do you need cash to grow your business?
Has your business exhausted traditional financing?
Would better cash flow strengthen your balance sheet?

If you answered yes to any of these questions, factoring may be a viable solution to fund your business with no debt, no loans and no banks.

Michael Moss is president and CEO of MDS Funding LLC, which provides invoice factoring in Atlanta that helps businesses improve their cash flow.

For more information about how invoice factoring can provide your business with quick cash in as little as 24-48 hours with NO debt, NO banks and NO loans, visit http://www.MDSFunding.com, email cashflowconsultants@mdsfunding.com or call 866-394-4637.

1. Assign bill collection to in-house Accounts Receivables

If a payment is being delayed, the in-house Accounts Receivable (AR) department is assigned the job of collecting dues from the customer. It is in the interest of both customers and your business to share a good relationship. Customers want products and services from trusted companies and companies want continued sales to customers.

The AR personnel work out a payment plan with customers who are unable to pay on time for any reason. The AR personnel can take informed decisions on these accounts, as they know the customer and understand the business need. They also have the authority to withhold pending orders of these customers, to refuse new orders, and to warn them about possible legal action.

If the delinquent customers are still unresponsive, AR personnel can decide to call in professional collection agencies to collect the debt.

2. Hire a professional collection agency

The chance of a debt being recovered reduces with time. Non-payment or delay in payment of dues is costly to your business as it reduces your revenue. When it becomes apparent that a customer is not responding to invoices and payment reminders, it is time to consider using the services of a commercial collection agency.

Collection agencies offer professional services for collecting debt. They charge 15% to 50% of the collected debt based on the age of the debt and the effort put in to retrieve it. However, the actual amount of debt they will recover from the debtor cannot be ascertained in advance. The point of time at which you decide to pass the customer account to the collection agency is very crucial. The earlier, the better. Timely intervention of collection agencies results in higher collection at a lower cost.

It is not easy to decide when to call in a collection agency. You need to assess the best time for recovery of debt. Sometimes, a collection agency is called in when continued contact by the AR personnel is going to adversely affect the relationship with the customer.

3. Sell your debt to debt purchasers

Selling the debt to a debt purchasing agency is an option when your business is low in capital and needs funds urgently, or you do not have adequate staff to pursue bad debt collection. The upside of this is that you get your money immediately irrespective of the amount recovered by the debt purchaser at a later date. The downside is that the debts are priced very low in the market. However, if you had written off the bad debt, it is better to get some of your money than nothing at all.

Deal with those unpaid bills with a sense of urgency. If you ignore them for long, you may have to write them off. But if you take timely action and hire a collection service, the possibility of collection is reasonably high.

Daljeet Sidhu is at TradeSeam. Guide to call center services. Compare customer service call center quotes. Sellers JOIN for sales leads.

Collecting medical bills is an onerous task. The billing rules are extremely complex, terminology difficult and the deadlines very strict. There is no single billing procedure that could be applied throughout the billing process. Additionally, the medical insurance companies are notorious for trying to avoid paying the bills. Due to such complexity, reliable metrics become even more important to optimize the medical bill collections

If you are considering hiring a medical billing service provider, carefully evaluate their performance measurement system, and the process used to respond to any payment issues or holdups that may arise for collecting the bills.

Following are some of the most important performance measurement metrics that an effective medical billing service should track and report to you.

* Gross and Net Collection Ratio
Gross collection ratio is the amount paid to the practice divided by the total charges billed. This does not include any write-offs. This ratio depends on the practice and the payer mix. A higher payer mix consisting of Medicaid and Medicare may result in lower gross collection ratio. It is best to compare this ratio to practices that are similar to yours. Net collections is the ratio of payments to charges after the adjustments due to write offs. For a high performing service, this ratio is typically over 90%.

* Days in Accounts Receivable
Time elapsed between billing and collection is an important metric to evaluate efficiency of a billing service. Number of days it takes to collect a bill depends on the medical specialties but a billing service can affect it by timely follow up with the payer and quick rectification of any issues that may arise.

* Percent of Bills Past Due
It is important to track past due bills. Billing service should report this as number and percent of accounts that are 60, 90, 120 days past due. It should have effective analysis process to troubleshoot the reasons for accounts falling in past due status. A good billing service would constantly improve upon its processes to shrink the accounts getting past due.

* Patient Liability
Percent of Patient Liability is the ratio of patient responsibility to total billed charges. This is roughly equal to the patient deductibles. This metric is important to track the effectiveness of the front office function since the co-pay is generally collected by the doctor’s office before the service is rendered.

* First pass pay rate
This indicates the percentage of filed claims that are paid without any need of follow up. Obviously, higher the percentage, more efficient is the medical billing service. This metric should steadily show improvement. Any dip in first pass pay rate is a red flag and should be properly investigated.

* Denial Rate
Denial rates tell you about the claims that required a follow up during a given period. Billing service should regularly monitor this metric and troubleshoot the causes of denial to keep the denial rate as low as possible.

Medical billing is just too complex, a convoluted process that makes it almost impossible to measure efficiency unless there are good tracking metrics in place. Additionally, it is important to respond quickly to any inefficiency or deterioration in performance. Therefore, in this digital age a monthly paper statement listing the performance metrics is not an acceptable means of reporting. An efficient medical billing service provides means to track these performance metrics via a web portal and promises continuous improvement in performance. Hire an effective and transparent billing service and you would definitely see an improvement in collections.

Daljeet Sidhu is at TradeSeam. Please see our guide to medical billing service. Compare medical billing services quotes. Sellers JOIN for qualified leads.

What Does the Collection Agency Do For You?

When you engage a collection agency, you have an agreement with them wherein they take on the responsibility of tracing the debtors and collecting the debt in accordance with the Fair Debt Collection Practices Act. Collection agencies have trained professionals who work for your business to recover debts at the earliest. You will pay a pre-determined fee to the agency for its services.

Timely Collection of Debts is Vital

Collection agencies follow a business model that motivates them to collect sooner rather than later. Time is of the highest priority in collecting debts. Ignore bad debts long enough, and the debt may never be recovered. A study a few years ago illustrated that the probability of collecting a debt decreases with time. Statistics from the survey show that the chances of the debt being paid are 73% after 3 months, 57% after 6 months, and only 29% after 1 year.

The When and How of Collecting Debts

Small businesses are hesitant to ask for unpaid dues too strongly. This is because they are not familiar with the rules and regulations of collecting debts. They are not clear on how and when to ask for payment that is overdue. Another reason for their hesitancy is the fear of losing future business with the customer. Here is what you could do. For small debts less than $100 send collection letters about five times and then hand over the account to a collection agency or write off as bad debt. For debts over $100, try collecting yourself about three times by writing a letter or making a phone call and then pass the account to a collection agency.

If all attempts fail, you can take legal action. However, it would be a good idea to conduct an asset assessment of the debtor to verify if sufficient funds can be recovered from them. You can also report the debtor to a credit rating agency.

How to Select The Right Collection Agency

The collection agency is conducts a service that has a huge impact on your customer relationships. It is very important to check out the performance record of the agency. The method used to collect debts should be professional, respectful to customers, and within legal bounds. Consider the following before making a hiring decision.

Industry Specialization: Collection agencies with experience working with small businesses are already familiar with the associated difficulties. If they are also familiar with collecting from businesses in your customers’ industry then it is a decided plus.

Collection Methods: It is important to verify the methods used by the agency to collect debts. The methods must conform to federal regulations. Besides keeping you safe from legal issues, this also ensures you maintain a cordial relationship with your customers.

Mode of payment: A collection agency can charge either a fixed fee or one on a contingency basis. It would be a good idea to do a fee survey across agencies as fees vary widely. Never compromise on the quality of the collection services to get a cheaper rate. The quality of the agency’s services will affect your customer relationships forever.

Collecting debts is arduous and time-consuming. Collection agencies offer professional services to handle this task efficiently. By reducing bad debts and enjoying good customer relationships, your business is bound to do well.

Daljeet Sidhu is Co-founder at TradeSeam. Guide to hiring a collection agency. Compare collection services quotes. Sellers JOIN for sales leads.

0-30 days: 68%

31-60 days: 14%

61-90 days: 7%

91-120 days: 3%

121 + days: 8%

The more money collected sooner, the better. However, what do you do if that is not occurring? If you’re reluctant to pursue the funds yourself and choose not to have staff do it, you may want to contact a medical collection firm.

What are some things to look for?

* Find out if the company belongs to industry associations like the Commercial Law League of America or the Commercial Agency Collection Association. This suggests they understand the ethics of collection laws like the Fair Debt Collections Act.

* Inquire about the commissions. The range can be anywhere from 15% to 50% of the total amounts collected. It depends on the account type and the level of collecting difficulty.

* Make sure the firm understands the sensitivity of collecting medical bills. A balance must be maintained between collecting what you’re legitimately owed and your medical practice. The collection process needs to be gentle, firm and persistent and always moving forward.

* Learn the collection process. The usual collection agency timeframe occurs at the 90 day mark. If a bill has not been remitted nor the patient heard from in 90 days, the collection firm’s work begins. It begins with a staff collector making:

– Immediate letters to the debtor
– Daily calls within a two to three week period

If no resolution appears to be forthcoming, then an attorney may take over. The attorney will pursue the case the same way. However, the letters will now be on the attorney’s letterhead and the calls will be from an attorney.

If nothing happens, then you’ll make a litigation decision. If you go forward, you’ll pay the $600 to $800 court costs and a lawsuit will be filed. If not, then the amount will be written off.

Either way, it’s resolved.

* Make sure you have realistic expectations. Find out the collection recovery percentage the firm achieves. Some studies suggest that a medical collection company will collect between 15% and 25% of the money they pursue. The average appears to be about 20% (The firm will collect $5000 from every $25,000 turned over).

* Consider bundling your billing and collections. If you find a reliable firm who can do all of your billing and collections, it may be financially worthwhile to review the costs and benefits of that situation instead of outsourcing the just past due accounts.

Ronald McLaughlin
RMK HOLDINGS INC.
625 N. Michigan Ave.
Chicago, IL 60611

Read revenue management information at our website which is http://www.revenuemgmt.com

So, Why Use A Debt Collection Agency

When deciding upon using the services provided by a debt collection agency, the details can seem daunting at first. People use these agencies for a number of reasons so it is important to seek the advice and service of one that best suits your needs. Debt collection agencies can typically offer more help than what one might initially think.
One of the most common questions when choosing between debt collection agencies is in regards to cost.

The Costs Involved

An agency should offer more than one option for payment to offer a more customized plan for you. Choosing the right option for your needs will help ensure better use of your debt collection agencies services.
A debt collection agency may offer a flat rate plan. These plans offer services for a set fee to keep your costs fixed. Within this plan, even more customization may be available, depending on how often the services of the debt collection agency are required. You may be able to choose between monthly plans or even on an as needed basis.

No Win No Fee

One common payment plan that many debt collection agencies use is to collect debts with no fee. The purpose of this plan is to offer a low cost alternative to other plans. If debts are not collected, typically no payment is required. If the debt collection agency does collect debts, they will then withhold their commission rate, which varies among companies and the amount of debt that has been collected.

Can The Debt Collection Agency Measure Up

It is important to determine if your debt collection agency can be customized for your needs, depending on the type of business you have and the amount and type of debt that you need to be collected. For example, landlords of both residential and commercial properties can seek the service of debt collection agencies to pursue overdue and unpaid rent. While it is common for landlords to be owed rent, it is important to be sure that your debt collection agency fully understands the details for completing the necessary paperwork and how to successfully collect the debt owned to you in a timely manner.

I Have A Judgement But No Money

Perhaps you are owed a debt so you have filed a judgment in an attempt to claim the money owed to you. In order to be enforced, the services of a debt collection agency that is experienced in this field may be required. A judgment does not actually collect your money therefore it is important to find a debt collection agency that understands how judgments work in order to get results.

Choosing Your Agency

A debt collection agency should be able to offer you a variety of choices when it comes to payment as well as customized plans to better suit the needs of your business. When it comes to collecting your debt, you will want results, and you will want them in a timely manner. It is imperative to choose a debt collection agency that can provide all of these services while still being the best value.

The choice of the right debt collection agency can be crucial to the recovery of your money, so make the best choice for you. A no win no fee service is always advisable for the best results.

James Johnson,trawling the net for a decent debt collection service. Online debt collection is likely to be the future of debt collecting. Debt collection services and agencies. Desigh by DNETS

However, this is not true at all. Most debt collection agencies have well laid out standards for their collectors which prevent them from insulting someone, or threatening or even contacting that person’s friends and family. There is a law called Fair Debt Collections Practices Act which lays strict norms for the way these agencies would conduct themselves.

If you put yourself in collector’s shoes then I believe you would understand that it is usually the other way around with a lot of people insulting and throwing abuses at them. In most situations the professional collectors would remain calm and will not easily be lured into the verbal game.

In most situations the agencies try sending collection letters to recover the money. People and businesses in most case will pay up since they have easily forgotten to pay the invoice. However in some situations debtors do not have the money then a flexible arrangement can be worked out.

The last resort is court cases where the agencies turn to courts for the recovery and even there most of the times the judge will recommend to have an out of court settlement saving precious time and money. The collectors cannot threaten the debtor at any juncture with legal action.

FDCPA has strict rules which help in regulating the functions and working of a debt collection agency and good agencies will always adhere to the law.Most good agencies in general have alwayers on their payroll and they make sure that they stick to the law of the state or federal government. In some cases however the agencies may be treading on the fine line. It is here that people think that collection agnecies are ususllay not working within the given law. Also it is here that you need to employ aganecies which are specilaized as well as are well equipped to deal with tricky situations.

So, in conclusion, hiring the debt collection agency, is a professional way of doing things and it will not harm your business repute in any which way.It is an option that you cannot ignore while getting your money back.

Alka has witnessed during her job in the financial industry several online debt collection misconceptions and has written extensively about those on her website the online debt collection resource.

More and more physicians are finding that using a medical billing service actually helps them to run a more efficient office.

A medical billing company has trained professionals that will handle all of the billing needs from coding to submission to the insurance companies.

Many insurance companies today have reputations of being notorious for denying claims that have been submitted for the most ridiculous reasons.

A busy medical practice that submits their claims on their own is more likely to have those claims denied than if a medical billing service was used.

If a medical practice sees fifty patients a day, then fifty medical claim forms must be filled out and submitted. This means that the person who fills out the claims manually must go through the entire process fifty times a day manually and mail it to the insurance company where it will sit in stacks of thousands of other claims waiting to be entered into the insurance company computers. If there is one mistake, the claim will be rejected and sent back to the medical practice to be filled out properly.

This means that the person who fills out the medical claims will have more work than he or she can handle. It can be very frustrating.

Even if the claims are filled out correctly, it can take several weeks to several months to receive a check from the insurance company. For a small medical practice, it can be devastating if several claims are denied at the same time.

A medical billing service takes all of the headaches and frustration away because they handle every aspect of medical billing. Trained professionals code the claims and submit them to the insurance companies electronically, eliminating the process of manually entering them at the insurance company.

Another benefit is that a medical billing company offers is that they will follow the claim from beginning to end, making sure that there are no problems. They also have an excellent acceptance rate of over ninety percent.

When a claim is submitted electronically, it is either accepted or rejected immediately. When it is accepted, a reimbursement check is sent out within days and not weeks or months.

For small medical practices that rely on the insurance reimbursement checks to operate their business, a medical billing company is a godsend. Many think that the cost of a medical billing company is more than they can pay; however when you look at what you could lose, the cost is really quite reasonable.

Medical billing companies are available to everyone in the medical industry no matter what their specialty is.

Peter Geisheker is CEO of The Geisheker Group marketing firm. One of the types of clients that Peter helps are medical billing services

Any type of medical practice can use medical billing. It is a cost effective way to run the business end of your medical practice.

Small medical practices often take on the task of medical billing in order to cut corners and to save money. This can be devastating to the financial stability of the medical practice especially if it relies on the repayment from insurance companies to meet its financial obligations.

When medical personnel manually fill out the paperwork for billing, it can take long tedious hours just to make sure it is done correctly.

It is mailed to the insurance company where it is sorted in the mail room and then makes it way to the desk of the claims department where it sits in stack of medical claims waiting to be processed.

You are not guaranteed a speedy turnaround time and often it can take several months to see your return. If by chance there is a mistake on your claim, it is rejected and you have to start the process all over again.

It can be quite maddening to have to wait for a return that is not coming, and tracking a payment can be as frustrating as the rejection itself.

This is why medical billing is so critical to any medical practice. It takes all of the frustration out of the billing process because the highly trained professionals do all of the work for you.

As with any business, medical billing companies charge a fee for each claim that they process. Many people feel that the fee is not worth paying, however, when you stop and think about the service that you are paying for, you may find that it is worth the cost.

Medical billing companies provide a level of service that is second to none. The medical billing specialist code and send your medical claims electronically to insurance companies.

What this means is that the claim is sent directly to the insurance company computers where it is accepted or reject immediately and the billing service is notified within minutes. Once the claim is accepted, your payment is sent within days instead of weeks or months.

Medical billing companies also track each claim from the time it is submitted to the time you receive your check. This means that you have more time to spend with your patients without having to worry about anything else, and your office staff can devote more time to the duties of running your office.

This is what medical billing services offer their clients. An added benefit to using a medical billing company is that their acceptance rate of claims is over ninety percent meaning that the rejection rate is less than ten percent.

It just makes sense to use a medical billing company because of the advantages. The fast turnaround time is well worth the cost of the service.

Peter Geisheker is CEO of The Geisheker Group marketing firm. One of the types of
clients that Peter helps are medical billing service