Why Banking Money Sooner is Important
It’s all very well having a great practice that generates lots of revenue, but until that revenue is collected and in the bank, you haven’t really generated cash for your practice. One way to get that money from medical aids and patients into your bank account faster, where it can start earning interest, is to speed up your claim-send cycle.
The claim-send cycle
What does your practice’s claim-send cycle look like? If it’s really quick, then you’re sending fully processed claims off to the medical aids immediately, before the patient walks out the door. That means you get paid sooner. If your cycle is on the slow side, you tend to leave it for later in the day or even later in the week. That means you get paid later – sometimes a lot later as potentially you have missed a cheque run.
By delaying your claim-send cycle you also increase your risk of bad debt, because after the first 24 hours, it gets progressively harder and more costly to collect.
Time is money
Money banked today instead of say, next week, earns seven extra days of interest. It may not seem like much, given current money-market rates of around 5%. But it all adds up when you consider that even small GP practices collect around R3 500 a day and can make this money work for them.
You also get a discount
Besides the obvious advantages of a quick claim-send cycle, you could also benefit from a 10% discount on the transaction costs of all claims that are submitted immediately.
Here’s how to get your money in sooner:
• Send claims off promptly, preferably in real-time
• Make sure your admin staff recover any outstanding balances within 24 hours
• Put extra cash into an interest bearing account or
• pay off any interest bearing debt
THE BANKER’S MANTRA: Turnover is vanity, profit is sanity, cashflow is reality!