Key Elements to Reduce Challenges in Hospital's Accounts Receivable

 Financial personnel were asked, in a research conducted by Paystream Advisors, what their chief challenges were when managing accounts receivable in hospitals. According to the report, the top 5 challenges were as follows: 

• 86% ranked minimizing DSO as their chief challenge
• 85% claimed to want higher efficiency from current employees as a challenge
• 83% stated minimizing portfolio risk was their top challenge
• 74% said minimizing bad debt write-offs is their priority
• 65% want higher productivity while reducing employee count 

These are tough challenges indeed. But with the correct course of action, they can be conquered. We have certain proposals that can aid you in managing medical accounts receivable better, here they are: 

Minimizing DSO 

Minimizing DSO is ranked 1 as the chief challenge according to the report. It may seem like a tough task, but its difficulty can be curbed with the right steps. Here are certain courses of action that you can put into effect right away: 

• Customers are more likely to pay you sooner if you invoice them as soon as possible. The sooner they receive the invoice the sooner their queries can also be solved.
• Incentivize timely payment of invoices. Offer certain bonuses or discounts to customers that pay on time. Customers will definitely be more likely to pay sooner this way. This will also have a positive effect on customer/company relationship.
• Offer multi-platform payment methods as a part of your medical accounting services such as mobile app, online payment etc.
• Conditions and payment deadlines need to be very clearly stated on invoices. Any piece of information that needs to be given to the customer must be conveyed properly. 

Increasing Current Employee Efficiency (Or Higher Productivity With Lower Employee Count) The systems your hospital uses for managing accounts receivable are highly important when determining the efficiency of the accounting division. Many businesses still use medical accounting service software that are riddled with blue-collar work which only requires a higher time investment from your employees. This renders the entire process highly inefficient. They're left focusing on medical accounting services that don't add value, like updating spread sheets, rectifying data irregularities instead of more critical tasks such as establishing communication with the customer, settling disputes and more.

What your organization needs to here is to incorporate an automated system that can centralized medical accounts receivable statistics so that your employees can be freed up from manual work and more time is spent on vital tasks that will bring in money. Overall efficiency will go up as a result. Automation of medical accounting services is crucial if your goal is to get more out of your current employees or to increase productivity with fewer employees. 

Minimizing Portfolio Risk 

To curb portfolio risks attached to accounts receivable, it is essential that you understand your customers. Practices such as monitoring your customer's credit worthiness, changing your customer's credit worthiness regularly should be incorporated. Here are a few things to take care of: 

• Fresh customers should be required to fill a credit application.
• Repeating customers that ask for a credit increase should be required to fill a credit application. This helps you gauge their credit worthiness before you make your decision on their request.
• Customer credit references must be followed up. Make sure they are actually credible. Many hospitals make the mistake of not following up, which ends up costing them and each time it happens is one too many. 

Minimizing bad debt write-offs

Aforementioned proposals, if followed, should help you curb bad debt write-offs. High efficiency among employees and keeper proper track of credit risk will result in a decrease in bad accounts, timely payment of invoices and a decreased numbers of invoices that go past the due date. 

Hopefully, you've learned a thing or two after reading this article and will be able to implement ideas into your business that are appropriate to your existing challenge.