Invoice Factoring Invoice Financing Successfully Used by Medical Practice
Author: Casey Marie Long
Date posted: 08.15.23

In the middle of 2018, a medium-size physician practice in Arkansas was regularly running into cash flow issues. While they had the funds to pay their employees, the additional software expenses and hospital fees were regularly causing problems because of the delays in receiving payments from insurance companies. Because the insurance companies were working with minimal staff, it was taking 4-5 months before they were getting paid for their services.

The physicians were aware that insurance companies would eventually pay, but the delays caused issues with their vendors. They hesitated to reduce their pay because of personal bills like mortgages, childcare expenses, and student loans. However, when they learned about invoice financing, they took control of their thriving medical practice. Successfully using invoice financing, they improved their cash flow and made their financial situation more stable. It also effectively resolved the delayed payment issues, reassuring their vendors and playing a crucial role in their financial success.

With invoice financing successfully utilized, their medical practice thrived even further, ensuring smooth operations and financial stability.

Discover how invoice financing has empowered a thriving medical practice to enhance cash flow and optimize financial stability.

The doctors had contracted with insurance companies that had a decades-long history of never missing payment. Leveraging their solid reputation, the physicians turned to a factoring company to resolve their cash flow issue and pay their regular bills promptly. Keeping vendors happy was crucial for running the practice smoothly and accessing necessary products and services.

Since they were expecting large payments from reputable companies in the next few months, the doctors were ideal candidates for a factoring agreement.

The physicians made a strategic decision to sell several outstanding invoices directly to a factoring company. As soon as they entered the agreement, the factoring company took prompt action. They provided the doctors with cash equal to 90% of the invoice amounts within a few days. The factoring company retained a small fee, while the physicians received the remaining amount once collected from insurance companies.

Having the cash in hand, the physician practice immediately took action to bring all their bills current. They skillfully managed regular payments to their staff and themselves, ensuring they received the salaries they were accustomed to. The factoring agreement significantly improved their cash flow, enabling efficient and confident practice management.

Discover how invoice financing has empowered a thriving medical practice to enhance cash flow and optimize financial stability.
About The Author | Casey Marie Long

Casey has 12 years of technical writing experience. She is also a CPA and bookkeeper. Casey graduated from the University of St. Thomas (Minnesota) with a B.A. in mathematics and currently resides in San Diego, CA.

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