In the first two parts of this series I discussed ways for a temporary nurse staffing agency to get invoices paid quicker by researching its potential clients before sending nurses into facilities and by delivering professional invoices in a timely manner to their clients. What happens if the first two steps are done sufficiently, and invoices are still taking a long time to get paid? Enter the collections process.
As strange as it sounds, the collections process actually starts before you choose a new client. During the due diligence phase, a smart nurse staffing business owner should take the time to screen his/her potential clients before starting up contractual relationships with them. In fact, I discussed ways to research a prospect’s creditworthiness before doing business with them in the first article of this series. A five minute conversation with a clerk in the Accounts Payable Department is all you need to determine how long it should take for you to be paid. Knowing this information ahead of time will help you determine when to pick up the phone and make a collections call. For example, if the AP clerk said that it normally takes between 30 and 45 days to pay their vendors, it wouldn’t be prudent to start hounding the AP department when an invoice has not been paid after only 15 days. On the other hand, if an invoice has aged out to 55 days, it might be a good idea to call the AP department and confirm when a check will be cut for that invoice.
In the second article of this series, I stressed the importance of being punctual and accurate with your invoicing. In conjunction with sending out your invoices on time, it’s also important to follow-up to confirm that the invoices you sent were actually received and that the hours were billed correctly. A large healthcare facility’s accounts payable department may see hundreds of vendor invoices a week, so some are bound to fall through the cracks from time to time. A quick call to accounts payable can help prevent skipped and slow payments. This is an important but often overlooked step in getting invoices paid quicker.
Similar to offering a discount for a speedy payment, the opposite-adding penalty fees to late payers-also proves to be an effective means of getting paid quicker. Invoices listing two prices, one for payment within a designated term, and a higher price for invoices paid after the due date will certainly get your invoices processed faster than those vendors who do not list a late-payment fee. It is imperative to include these late fees within the contract as well in case a disagreement arises when they are applied.
If all else fails, another way to get healthcare facilities to start paying quicker is to threaten to stop staffing nurses if they don’t start paying. Although this approach has some risk, pulling your nurses out of a slow-paying facility is sure to do one of two things: (1) force them to start paying within the designated terms, or (2) allow you to pursue another facility which won’t take as long to pay. Think about it. What would happen if you went into a store and wanted to buy something without paying for it? The cashier would tell you sorry, but you can’t take the merchandise unless you have a way for paying for it. The same concept should hold true for your temporary nurse staffing agency. If a customer doesn’t pay in a timely manner, then stop supplying them with nurses.
There are several steps in how to get paid invoices quickly in the nurse staffing industry, and I have explained some tips and tactics to do just that in this three-part article series. The first stage of the process is to research potential customers before signing a contract with a medical facility. Taking a little time to investigate the creditworthiness of a hospital, nursing home or clinic will save you a lot of time and money later on down the road. The second stage is all about sending accurate invoices on time and sending them to the right location. Finally, the third and final stage is to stay on top of collections and continue to monitor your customers’ credit history. As I wind down the last article of this series, I hope that you will use some of the techniques that I suggested within your own nurse staffing agency to ensure that you maintain a healthy cash flow.