According to the Bureau of Labor Statistics, personnel services will be one of the fastest growing industries in the next five to 10 years. Although nurse staffing is only a small component of the entire staffing industry, competition among providers is fierce. Sometimes when competition heats up, basic instincts disappear and are replaced by poor business decisions. Business owners are beginning to focus more on revenue potential rather than actively preventing losses. This article is the first in a series that will explain how temporary nursing staffing companies can avoid cash flow problems by taking the right steps to get paid faster for their services.
Many nursing staff business owners say the most important way to get paid faster is to invoice quickly. Makes sense: the faster you bill your customer, the faster they’ll process your payments, right? Well, sometimes. While I agree that sending an invoice promptly is important to the entire process of ensuring on-time payments, I would say that it is not the first step. There is something that needs to happen before you even agree to start sending RNs to ABC Hospital. In fact, some would argue that this should be done before even signing a contract with ABC Hospital. Simply put, get to know your customers before you do business with them, and you’ll have a much better chance of getting your invoices paid quickly.
If you own a temporary nursing staffing agency, there are several ways you can perform due diligence on a potential client. The first step is to take advantage of resources that are free. You’d be surprised how much information you can find about a potential customer simply by conducting a web search on the company name and its principles. Depending on the size of the healthcare facility you’re looking for, you may find press releases, news articles, or even court records related to the organization and its employees. For example, five minutes of virtually effortless detective work could easily prevent you from hiring nurses at a facility that is about to file for bankruptcy.
Today, most companies have a website. So another quick way to check out a medical institution is to go to their website. Try to get an idea of how big the organization is and how professionally they present themselves. Then the next step is to confirm that the health care facility is in good standing with the Secretary of State where it is doing business. Access to such corporate records is usually free and available on the web. For example, if you visit http://www.capitolservices.com/stateLinks.asp, you can easily access each state’s Secretary of State’s website to search for corporate records. Checking with the Better Business Bureau and speaking with other industry professionals and networking contacts is also a good way to get a basic idea of a potential client’s legitimacy and professionalism.
As the owner of a nursing staffing business, you can also watch the evening news and/or check the local newspaper to find information about the health care institutions you are considering hiring. Naturally, when a hospital or nursing home is about to close its doors, it’s a big deal and the press will be on site to inform the audience about the latest developments.
Another quick and virtually painless way to help get bills paid faster is to make a quick call to the facility’s accounts payable (AP) department. Don’t be afraid to ask an AP employee how long it currently takes to pay vendors; This is obviously very valuable information for a temporary nursing agency.
At the very least, I would highly recommend doing the things listed above before committing to any type of contract with a facility. However, if you are not satisfied with your findings, there is a next step, which will require expense, as well as spending some concrete time learning about the resources available and how to do it yourself. Subscribing to services such as http://www.knowx.com and/or http://www.credit.net for a minimal fee can help you search for corporate information in more detail, allowing you to view relevant documents and credit ratings. If you’re willing to spend a little more, a more detailed way to find out how a medical facility pays is to run a business credit report at one of the major credit bureaus: Dun & Bradstreet, Experian, or Equifax.
The level of detail you research before doing business with a new facility is entirely up to you, but it’s an important step that can prevent financial difficulties before they even have a chance to blow up.
Stay tuned for the next important step on how to pay bills faster. In the second part of this series, I’ll discuss how accurate and fast billing can also help keep those receivables in check.