If your business isn’t on top of the billing process, then there’s a good chance it’s missing out on precious income.
Whether you’re in the retail, medical, service industry, or other, you need to make sure your clients are billed properly.
When it comes to income, here are just a few reasons why billing is so important to your business:
Too Many Claims = Lost Revenue
There’s a difference between a few outstanding balances and multiple claims that completely disrupt the revenue process.
When your business has more claims than payments, it can seriously damage your income to the point where your business has trouble covering its costs.
Claims have a snowball effect, especially for a billing department that isn’t prepared for the collections process. It’s important for your business to have a plan in place for anytime an outstanding balance does enter the claims cycle.
Outstanding Balances Are Difficult to Track
Customers who pay their balances on time make owning a business a pleasure.
However, every business experiences customers who allow their outstanding balances to grow beyond what is acceptable. In cases such as this, the numbers become difficult to track.
A bill that’s paid on time is considered an asset in the eyes of accounts receivable. When that same bill becomes an outstanding balance, it puts your business’s collections in the red.
In addition, the outstanding balance costs your business more money every day it’s not paid because it takes your billing department more time and energy to track it.
Whether your business collects interest on unpaid bills or not outstanding balances are bad news for both your business and its customers.
For medical practices in particular, claims and unpaid balances can seriously damage revenue over time. Because medical practices have such a high volume of patient turnover, hospital and clinic billing departments oftentimes become overwhelmed.
As the following article asks, Where does your practice fall on the medical billing risk matrix?
Well, if you are in the medical industry, Revenue Cycle Management software, or RCM, can help you get your billing under control. With RCM software, your practice can automatically track balances, claims, and insurance coverage considerations from one payment cycle to the next.
Collections Agencies Are a Headache
Collections agencies are an unneeded stress that no business should have to deal with.
Unfortunately, there are clients who don’t pay their bills and some businesses have no choice but to use outside resources to collect on outstanding balances.
To avoid the hassle and headache of collections agencies, there are some things your business can do to improve its billing process.
There are clients who are negligent with their payments, but in most cases, clients simply forget a bill is due. Sending helpful email reminders to your customers a few days before their bill is due will help avoid unpaid bills.
If an unpaid balance does go beyond one or two billing cycles, then your billing department should call the customer directly.
Explaining the payment situation to the customer and coming up with a new payment plan is the best way to reach a payment resolution.
By keeping in mind the pointers above, your business will keep its income stream flowing without issue
Photo credit: Image courtesy of Stuart Miles at FreeDigitalPhotos.net
About the Author: Adam Groff is a freelance writer and creator of content. He writes on a variety of topics including small business and finance.