When it comes to accounts receivable, how well do you know your cash flow? Many medical practices treat their accounts receivable (A/R) statistics as a black box of misinformation, when in reality, it’s one of the most crucial figures to comprehend when assessing your practice’s financial health.
Accounting for Accounts Receivables
Accounts receivable is a high-touch aspect of every medical office, as it is the money owed to your practice for services given and billed. It can be difficult to acquire a holistic understanding of how long it takes you to get paid if you have a big number of administrative personnel overseeing different patient accounts or specialties.
Why should you keep track of your accounts receivable turnover?
If patient visits are consistent, incoming cash should be as well – which is why it’s critical for medical practices to know how long it takes between bills being sent out and payments being received.
The accounts receivable (A/R) of a practice reflects how many payments have yet to be received, whether for insurance reimbursements or out-of-pocket expenses. The goal of a healthy medical practice is to streamline procedures in order to get paid faster, which could include minimizing billing and coding errors or improving claim follow-up. Keeping track of how long claims spend in A/R can help practices figure out which payers are delayed and why.
You can notice whether your team is late to submit claims to payers by knowing the average number of days between when you visit a patient and when you collect what you’re owed. You’ll also know how much money you need to retain in the bank – and for how long – to cover your running costs until refunds arrive.
Invoicing on time
Prepare and send your invoices as soon as possible after providing medical services on credit. The client’s name, account number, date of transaction, description of medical services given, any discounts granted, and total due amount should all appear on each invoice.
After transferring your accounts receivable to your sales journals and general ledger accounts, these facts are critical for tracking them. Invoices are also important in the event of future problems or disagreements, such as overcharges and undercharges. Make sure your clients have received their invoices by making follow-up calls.
Patients Should Be Informed
Most patients have only a hazy grasp of how healthcare practices collect payments from insurance companies, and they may be unaware of their financial responsibilities when they use medical services.
Providing all patients with a pamphlet or reference sheet outlining their position and duties in the payment process will help to clear up a lot of misconceptions. It’s also crucial to have someone on staff with financial knowledge who can answer any questions patients might have regarding the claims and payment process.
WWS has decades of coding and billing experience for a variety of healthcare practices. We recognize that each practice is distinct and deserves a tailored solution that supports its long-term objectives. That’s why we collaborate closely with our clients to help them set up medical billing services and solutions that are tailored to their individual needs and enable them to provide the best possible care.