What is factoring in a doctor's office?
Basically, there are two options that Billing in your doctor's office to design: independently by practice staff or outsourced to a factoring provider. When outsourcing Are the claims transferred to the service provider - there is an assignment of the invoice. This service is called factoring. The term “factoring” is an Anglicism that goes back to the Latin “representa” for “invoice.” The billing service provider or financier is also known as a “factor” or invoicer.
What is real and fake factoring?
Real factoring is the standard form of factoring. This is where you sell your receivables to the invoicing agent. In this case, the service provider also assumes the risk of default on the claims. Should a patient fail to pay, this becomes a problem for the billing service provider. Legally speaking, the invoicer is the new creditor of the claims.
that fake factoring On the other hand, it is more of a financing solution. The outstanding receivables are to be regarded as security in order to obtain a loan from the invoicer. The default risk and accounts receivable management remain with your practice.
How does factoring work in medical practices?
The financier takes over accounts receivable management and collects receivables. This means that your patients receive their invoices directly from the billing provider and transfer the sum to their account. In your practice, the patient signs a document to forward their billing information to the billing service provider.
However, it often leads to confusion when patients Invoices from unknown companies received. Through a full-service provider such as Nelly, the patient through the digital patient admission is already familiar with your practice at the first contact, but this problem can be cleverly avoided.
What are the benefits of factoring for my medical practice?
Factoring offers doctors a number of attractive benefits. We have summarized the most important ones:
- Liquidity: You will receive your fee even if the patient hasn't paid yet. As a result, you are always liquid. This is particularly interesting when setting up a new medical practice, but also for established practices. Factoring can also improve your balance sheet figures and thus increase your creditworthiness.
- Planning security: The default risk of real factoring lies with the invoicer — this is also a significant advantage of factoring for safety-oriented doctors. You can plan better with your resources and save yourself time and nerves with defaulting patients.
- Digitalization: Advanced service providers such as Nelly They now even offer digital factoring. After a one-time wet signature from patients in your practice, all payments can be made digitally. By saving printing and postage costs, Nelly can provide good conditions with cooperating banks, as invoices no longer have to be sent by post.
- Relieve your practice team: If required, the billing service provider takes care of accounts receivable and payment reminders. You benefit from professional receivables management and a noticeable reduction in your workload medical professionals, which gain more time for their actual tasks.
- Payment convenience for your patients: Factoring can also increase payment convenience for your patients. That depends entirely on the selected provider. Installment payments, for example, are an option offered by some factoring service providers, such as Nelly. In addition, with an all-round solution such as Nellysimply pay via smartphone.
Factoring for dentists
Factoring is primarily widely used in dental practices and private practices. On the one hand, this is due to the high material costs that must be financed — such as laboratory costs or costs for prostheses. On the other hand, the risk of failure is higher if the costs of treatment have to be borne privately, as is the case with additional benefits is the case.
What costs does factoring my medical practice incur?
Each factoring process is subject to a turnover-related factoring fee. This is usually 1.5% to 3% and pays off quickly in view of the reduction in personnel and efficiency gains. The amount of the respective fees varies from provider to provider and may depend, for example, on an agreed minimum order volume. There may also be additional fees for optional additional services:
- Processing fee: The processing fees may include collection and settlement of receivables as well as monitoring incoming payments and, if necessary, sending reminders.
- Credit check: A credit check protects you and the invoicer against payment defaults, but can sometimes involve additional costs.
Digital factoring providers such as Nelly can guarantee relatively low fees, as letter and postage costs are saved. These are passed on directly to the customer. There is also no minimum fee for this, as there are no costs for sending letters that would have to be covered.
Sample calculation
The invoice amount is €820.00. The practice transfers this requirement to a factoring provider. For its service, the factoring provider withholds an amount of 1.5% (i.e. €12.30) and arranges an immediate payout to the practice in the amount of €807.70:
- Invoice amount: €820.00
- Factoring fee (1.5% on 820€): 12.30€
- Instant payout: 807.70€
What aspects do I have to pay attention to when it comes to factoring providers for doctors?
There are many different factoring providers on the market with different conditions. The best option is a service provider who specializes in doctors and healthcare professions and can offer you a tailor-made package. Check the availability of a user-friendly online platform or software solution that allows your patients to easily process payments and thus minimizes the risk of payment defaults.
Nelly as a digital specialist in factoring
Nelly is the first digital factoring provider on the DACH market with cooperating banks as your contractual partner. This also makes Nelly attractive for practices that have previously been out of the question for traditional factoring. There is no minimum turnover or minimum amount that practices must book out, as invoices are sent completely digitally after a one-time wet signature.
Dental practices in particular benefit from Nelly's factoring offer. The benefits of billing with Nelly lie in the following points:
- Integration with your practice management system: Nelly can be easily integrated into all PVS and transfers entries and withdrawals via an interface.
- Automated credit check: Nelly can automatically retrieve the patient's credit rating and transfer it to the patient records in your PVS.
- Digital invoice management: Patients decide for themselves whether they will receive their bill via SMS or email and can pay their bills directly on their smartphone in the patient portal — as conveniently as when shopping online.
- Real and fake factoring: Nelly enables factoring with cooperating banks as your contractual partner, both with and without payment default protection.
- Toll-free installment payment: If necessary, you can provide your patients with interest-free and fee-free installments of up to 36 months.
- Reimbursement service: Nelly communicates with the patient or the insurance company in case of objections and reimbursements.
Checking out with Nelly enables practices to:
- 90% Time savings that must be spent on private billing, dunning, bookkeeping and administrative tasks
- 50% faster payments
- 20% less transaction costs
- 25% fewer patient inquiries in practice
- 5% more completed treatments
In addition, provides Nelly There are many other functions that make everyday life easier for you and your practice team — such as complete digital document management or digital anamnesis via QR code.
Conclusion: Factoring saves doctors costs and nerves for practice staff
Factoring enables doctors and medical professionals to focus on their core competencies and patient care by handled financial matters more efficiently become. Especially by outsourcing claims management, your practice team can gain considerable time. Not having to run after defaulting patients also promotes trust and the relationship between practice and patient. This contributes to increased satisfaction and an overall more pleasant working atmosphere in your practice.
Interested in digital factoring with Nelly? We would be happy to advise you on your individual case.
The personal names used in this article always refer equally to all persons. Dual naming and alternate names are omitted in order to improve readability.
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