The Real Difference Between Healthcare Factoring and Third Party Medical Receivables Factoring
If you work in the health care industry, you’re familiar with the struggles and challenges of collecting money for your good, services and supplies. Patients can often take their time to pay bills, and government agencies and entities can try your patience even more. How can you stay on top of your finances if people aren’t paying in a timely manner? Experienced professionals in medical industry financing often turn to healthcare factoring or third-party medical receivables factoring. Both of these have benefits, but it’s important to understand how they differ from one another so you can make the right choice.
What Healthcare Factoring
Does This method is used in several different sectors, including the medical field. It involves an entity knows as the invoice factoring company buying invoices. Factoring companies exist in several industries, so if you’re looking for medical industry financing, make sure you work with a factor that specializes in health care. If you pick the wrong factor, you might be disappointed that it doesn’t have the skill and experience you need. A good factoring company that knows your industry will be experts when it comes to credit issues and collections. The factor will take your invoices off your hands in exchange for a lump-sum payment.
What Third-Party Medical Receivable Factoring
Does Many professions and industries use factoring as a way to bolster finances or get on top of a faltering balance sheet. If customers aren’t paying up or have gotten well behind, people in many businesses use this method. Here’s how it works: Instead of spending time and energy trying to collect on delinquent accounts, you would sell the invoices to a third-party, known as a factor. The factor provides you with a lump sum of cash and then assumes responsibility of collecting from the customers. The factor has expertise in the collection process. This has some distinct advantages for you and your organization. First, it provides fast cash to help with other debts you may have incurred. Also, this type of medical industry financing allows you to spend more time on other areas of focus. You can divert some of your resources from collections to other important endeavors. This way, you get the cash you need without having to spend frustrating time trying to contact and collect from late-paying patients.
Both of these forms of medical industry financing are beneficial to many health care organizations. Choose the one that’s right for you and eliminate some stress in your business duties.