Your Accounts Receivable: Money in the Wrong Pocket

BPO--TRAC
Your Accounts Receivable: Money in the Wrong Pocket
Well-run business watch their collections like hawks. Because they collect 97 to 100 percent of their adjusted production, they earn more profit. They regard accounts receivable as money that is simply in the wrong bank.
You must cover the following. if you expect to get all of your money.
1. Do not extend credit to Customers.
Get Customers to pay their portions in advance or as they go. Give them options. Accept credit cards and automatic bank account debits. Make arrangements with finance companies. Give discounts to cash Customers. If necessary, make them charity cases or refer them out. Do not become a credit company.
2. Solve collection problems in advance with financial policy agreements.
Give each Customers a financial policy to sign. Have a different policy for each case type. Do not try to lump all the rules for all types of patients into one big policy. It will be confusing and miss important points.
Your managed Customer policy contains a few different rules. Same with your policy for customers and so on. Your consultant has samples for you to use.
3. Enforce finance policies.
Once you have established written policies for collections with your Customers, make your staff enforce them to the letter. Do not allow exceptions. An unenforced policy is worthless.
4. Never avoid money discussions.
Talking to Customers about money should be as easy as talking to them about their health or their families. Discussing and resolving money issues is important if you truly care about the Customer's well being. You refuse to allow a Customer's financial issue to stop a needed procedure.
Customer suffers if your morale is low, your staff is poorly paid or your business goes under.
5. Give your collections manager priorities.
Examples: Setting up a new customer in the computer is more important than fixing an old account. Getting weekly statements sent takes priority over sending accounts to a collections agency. Training an employee to enter data correctly is more important than fixing data entry errors.
6. Manage collections by the numbers.
Monitor your collections staff's productivity with statistics. Each week, find out how many calls they made to customers and instutions. How much did they collect over the counter? How much came in from each payment source? Did accounts receivable totals increase or decrease?
You can then set quota targets and reward improved performance.