Medical Coding Jobs MUST Be Filled!
The best time to get
started is now!
of Two by PRN Funding
How Medical Billing Services Can Improve Their Cash Flow
In a world where it is becoming increasingly more difficult for a medical coding service to receive
timely payments from their customers, accounts receivable factoring can come to the rescue. Selling their invoices
at a discounted rate, also known as factoring, gives medical coding services the money they need to help maintain
and grow their medical coding operations.
Instead of waiting 30, 60, 90 days or longer for payment from their customers, factoring provides the
cash needed to meet payroll, pay taxes, purchase software and/or increase staff.
And all of this can be accomplished without increasing debt on a firm's balance sheet, which could limit future
financing alternatives. Factoring is best be utilized to bridge the gap between when an invoice is issued and when
payment is received.
Accounts Receivable Factoring
Immediate cash through factoring is considered to be a great tool for new and growing businesses in the health
care industry. Instead of waiting 30, 60 or 90 days for payment from hospitals, physicians' offices, nursing homes
and other health care institutions, businesses can receive cash within 24 hours for goods or services; they do it
through the sale of their accounts receivable.
Another reason why medical coding services should look into selling their receivables is that factoring
companies do not base their funding capabilities on a business owner's personal credit or even the company's credit
history. Rather, factors are most concerned with the creditworthiness of the medical coding service's clients, who
are also called account debtors; to pay them after the invoice has been sold. A traditional bank, on the other
hand, would be less concerned with the service's customers. From a banker's perspective, it's the business owner's
personal credit and the company's operating and financial history that will determine whether or not they would
approve any loan amount.
With that said, there are literally thousands of factoring companies to choose from, all of which offer distinct
advantages and disadvantages. The most important question to keep asking while searching for an accounts receivable
factor is: “Will this factor best be able to meet my company's needs?”
Keeping that key question in mind, factors can generally be divided into three different operating categories.
First, there are large factors that operate nationally and are able to fund clients across numerous different
industries. These factors usually work out of multiple offices, and they are set up to cater to the needs of very
large businesses. Because of their size and national presence, these factors are capable of funding almost any kind
of company, from staffing to manufacturing to transportation. These factors are true generalists both across
industries and geographic regions.
Then there are some factors that focus their operations in one specific geographic region. These smaller local
factors have a home field advantage so to speak, in which their clients find comfort in the fact that their factor
is literally around the corner. These factors will generally fund a wide variety of businesses; however they will
all be concentrated in a definable geographic region.
The final category is comprised of factors that concentrate their funding in one specific niche, offering a
heightened level of industry expertise to their clients. Their customers are generally national in scope, but are
focused on a small handful of industries. These factors' clients feel more comfortable knowing that their funder
understands the unique characteristics of how their industry operates. PRN Funding is just one example of an
industry-specific factor because we focus on funding the health care vendor industry, namely medical coding
services, medical staffing agencies, medical transcription services and medical supply businesses.
The size of your business, the services/products that you provide and whom you sell to all play a part in
choosing between the three types of factors. Whether or not you should go with a general or industry-specific
factor, a national or a local one, one that funds larger companies or one who works with start-ups all depends on
what you want for your own company. It all goes back to that original question, “Will this factor best be able to
meet my company's needs?”
Stay tuned for the next article in this series, which will discuss the differences in rates and fees among
factors and teach you how to compare and contrast to find the best factor for your medical coding business.
PRN FUNDING Provides Immediate Cash
About PRN Funding:
Philip Cohen is the founder and president of PRN Funding, LLC, which is an
extraordinarily focused niche player in the health care services funding market place. Through a process known as
factoring, PRN Funding provides medical coding business owners with the financial resources needed to grow and
effectively compete in the industry. Contact Philip Cohen at toll-free
866.776.5407, or via email at email@example.com. Please visit PRN Funding, LLC on the web.