A Basic Introduction to Accounts Receivables

If one were to reduce business to the simplest terms, one would probably call it the selling of goods by one person, and the buying of those same goods by another. Thus, whether we pay cash or run up a tab while doing business, money has to change hands during the course of a business transaction.

Accounts receivables is one such type of a business transaction. It refers to the way of dealing with amounts of money that are owed to a business by its customer. On the balance sheet of a company, accounts receivable refer to the amount of money that a customer owes it. Accounts receivables are also referred to as trade receivables, which makes the concept a little clearer. As this is a debt related amount, it appears under the category of current assets on the balance sheet of the company.

An accounts receivables transaction is generally carried out by means of an invoice which is sent to the customer with the aim of informing him of the duration within which the debt amount must be paid off. The term within which the debt has to be paid may be thirty days, forty-five days, sixty days, or even as much as ninety days. However, the duration of the debt depends entirely on the debtor and the creditor.

Various payment practices may be followed. These practices may be determined by the various industry standards. They may also be colored by the financial status of the debtor, or affected by the company's corporate policy.

Larger business organizations usually have to resort to the development of an entire accounts receivables department to look into the various kinds and amounts of debts that its customers owe it. A sales ledger is usually used to record transactions that pertain to accounts receivables.

Anyone who is starting out on a new business venture would have to learn about the various kinds of accounting terms and practices that are carried on within various industries. To get into a business undertaking without adequate study of the various accounting practices would be committing professional hara-kiri. Accounts receivables is only one of the many kinds of transactions that prevail in a business setting.

No matter what noble work you hope to do through your business, ultimately you would want it to be financially sound. So, you should make sure to find out about the many financial transactions that will enter into the picture once you start selling your products or services.

 About the Author
Ajeet Khurana is a web enthusiast and an author. He recommends: Accounts Receivables, Accounts Receivable Management and Debt Collection Services. premiereglobal.com.

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How Does Medical Billing Help With Accounting?

Medical billing. This is probably not the first time youve heard of this word and you pretty much have a basic idea what the phrase connotes. However, one thing you should know is that most people have the wrong idea of what is medical billing in reality.

Often, what is medical billing is equated with what is medical transcription or what is medical coding when in fact, the three are as separate and as distinct from each other as night and day. While its true that all three of them are somehow related and sometimes even their responsibilities overlap, it still doesnt change the fact that medical coding deals strictly with codes and medical transcription is strictly on transcribing doctors notes.

So, what is medical billing then?

Some people say it is the doctors key to getting paid for services rendered. Others say that it is a process of submitting claims to insurance companies. But these descriptions are vague. What is it really?

Perhaps, the question what is medical billing is better answered with this definition of the term:

Medical billing is practice management. It involves front office skills, with emphasis on billing and accounting, insurance claims processing, and making decisions concerning the financial aspects of a practice.

What is medical billing compared to medical coding and medical transcription?

Compared to medical coding and medical transcription, medical billing is wider in scope and broader in its range of responsibilities. Front office also means acting as an executive secretary to the practice, dealing in clerical work such as patient scheduling, clearing appointments, documenting patient visits, recording diagnostic and treatment procedures, and organizing medical records using a software program.

What is medical billing and what are its responsibilities?

The job of the billing professional starts with the office visit where you will handle everything from scheduling of the appointment to making sure that the patient makes it to his appointment. After the doctor sees the patient, depending on the services provided and the examination, he will then create and update the patients medical record.

The billing professional then organizes these records according to a system earlier adopted by the practice. This record contains a summary of treatment and demographic information related to the patient. The medical billing specialist will have to organize these records according to their contents to provide for easier access in case of another visit or some such circumstance and to create the billing record which is the document submitted to either a clearinghouse or an insurance company.

 About the Author
T J Madigan has been established in online business since 1998 and is director of a number of successful online projects one of which is articles.net.au.

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Denials and Delays in Your Medical Billing Claims

Are you wary about fighting a denial on your medical billing claim? Don't be. Sometimes medical billing claims are denied for legitimate reasons and other times a claim that should have been approved might be denied payment. Once in a great while your staff may miscode an item because they simply are not up to date on the CPT and ICD-9-CM rules and just plain old human error will factor in now and again.

Appealing a claim you feel should have been reimbursed is the way to maximize the revenue into your practice. Many practices lose great sums of income every year because they don't appeal denied claims due to either staff constraints or they simply didn't do it. Sometimes those claims get filed away by your staff with the good intention of handling them later but with day to day goings on, later just seems to be pushed further and further away and then your window for appealing a claim denial is gone.
 

Most denials can be grouped into a few categories:

*recording errors - simple mistakes like an incorrect insurance number or a mistyped date of birth can be all it takes to get a claim kicked back.

*coding errors - these will sneak through now and then even with all the checks and balances.

*processing errors such as incompatible edits.

Delays in medical billing are another issue that will cost your practice a lot of money. Delays can happen due to not getting a preapproval on a procedure or DME item. It also can happen when you forget to include documentation such as time line or medical necessity. Delays in payment due to errors are frustrating. They cost time and money in the form of someone on your staff will have put whatever they are doing aside and research the claim, pull files and resubmit.

If this is happening frequently in your practice, it may be time to consider outsourcing your medical billing. Your medical billing partner will pursue any denials in payment for you. If you get a claim denied for any reason, let your medical billing vendor look into the reason. In many cases they can go over the claim, find the error and/or recode if necessary and re-submit to the carrier and clearinghouse. 

When you consider claims submitted by professional medical billing firms have a less than 1% error rate, you can look forward to seeing your rate of denials and delays due to errors in coding decrease dramatically. This equals more revenue for you practice and also more time to run your practice and service patients instead of chasing paperwork.

Denials and delays are a fact of dealing with medical billing but you can make the incidence of this occurrence much less if you outsource your claims filing. 

 About the Author
Kurt Clark is a freelance writer, & CEO of Kurt Clark, Inc, a web development & internet marketing firm outsourcemanagementgroup.com.

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Collection Agencies; Not Just for Big Business

One of the reasons small businesses write off a great deal of loss is that they don't realize how easy and affordably it can be to hire collection agencies to recover bad debt. Developing a success-driven mindset and taking action like your larger competitors is the first step to growing your business. Many of today's collection agencies are small business friendly and can improve your company's bottom line drastically with smart solutions for collecting bad debt.

Look for collection agencies that offer several collection tier levels
Small businesses often don't utilize collection agencies like their larger competitors because they feel the debt owed may be insignificant to large collection agencies. Small businesses should look for collection agencies that offer different collection amount tiers. Debts as low as $1000, regardless of the size of the contacting business can be easily recovered by collection agencies.

Verify that the collection agency uses legal collection methods
The days of collection agencies harassing friends and family and calling late at night in an attempt to collect unpaid debt is long gone. To comply with today's regulations, collection agencies must adhere to strict laws that require them to use more brains than brawn in an attempt to collect debt. Check to make sure that the collection agencies you're considering belong to either the International Association of Commercial Collectors or the American Collector's Association. Admittance to either requires that collection agencies adhere to the legal standards and ethics of third party collection agencies.

Collecting the debt yourself verses contracting a collection agency
First party collectors (i.e. business owners) are not bound by the same set of federal regulations when it comes to collecting debt. However, attempting to collect debt if not handled properly can result in poor client relations at best and a hefty fine at worst. A systematic, proactive first party collection approach works well for the first 30-60 days of delinquency. If the client hasn't paid by that point, you're at risk statistically for losing a substantial part of the balance.

A timeline of diminishing returns
Statistically, the longer a debt becomes overdue, the less likely that you will ever recover the full amount from the customer. Figures from collection agencies show that after 3 months of non-payment you can expect about a 73% return on every dollar, 50% on every dollar after 6 months, and 25% after one year. If you've got bad debt that's piled up over long periods of time, your time may be better spent by hiring a collection agency to recoup some of your old debt and implementing a plan to prevent new bad debt.

Partnering with a collection agency
Some collection agencies offer an accounts receivable management program to help businesses manage their AR effectively. With this service, collection agencies print and send letters on your letterhead, contact clients under your name, handle disputes, and send the payment directly to your company. Most business owners don't enjoy trying to track down their payments. It's draining, frustrating, and most would rather spend their time working on creative ways to bring in new clients. For collection agencies, securing payments is what they do best.

Small businesses, perhaps more so than their larger competitors, can't afford not to have a solid plan for collecting bad debt. Small businesses often operate on much tighter budgets and just one or two delinquent accounts can stop a small business in its tracks. Fortunately, modern collection agencies are small business friendly and are often just what small businesses need to become more profitable and take their business to the next level.

 About the Author
Ruben Soliman is a freelance copywriter. For more information about what a collection agency can do for you visit aabusa.com

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3 Ways to Reduce Bad Debt and Make Sure Your Customers Pay

Whether you've got a few bad debts that need to be collected or a noticing that non-payment seems to be a trend for your customers, getting a collection agency on your side will set things into motion immediately. Here you'll find some essential reactive and proactive steps you can take to ensure that your business doesn't lose money because of your customer's unwillingness to pay.

Send a 10 Day Demand Letter
Customers make decisions about which companies they need to pay right away and which ones they can put off. Don't let your company be the one they think is soft and can be strung along for payment. Inform customers that you've got a collection agency on your side by sending a 10 day demand letter. Oftentimes, receipt of a demand letter from a collection agency is enough to get customers in default to start making payments. If not, the collection agency will begin pursing the funds after the 10 day period.

Be proactive: Collect detailed information from your new customers
You never know when a good customer will turn into a bad debt. The fact is that when companies experience difficult times, there is usually some money to pay bills, but perhaps not enough to pay all of them. Make sure your customers know that your company is one they should pay first by having them sign an agreement that informs then that your debt collection process include a collection agency. When opening a new customer account, ask for all of the necessary information a collection agency will need in order to pursue payment and update information regularly. You'll need to have certain key customer information in order to contract a collection agency for recovery:

• ?Contact Name(s)

• ?Business Type (LLC, Inc, Sole Proprietorship) 

• ?Physical and billing address

• ?Multiple contact numbers (direct line, cell, fax, etc)

Implement a consistent billing and collection process
As a business owner, your goal is to make and retain good relationships with customers. This means treating them fairly but firmly during times when they may be experiencing financial difficulty. The key to accomplishing this is to establish a set of expectations through your billing process that begins with a monthly bill, then a late notice, followed by a 10 day demand letter, followed by collection agency contact. By doing this consistently, your established clients aren't likely to get offended or scared off, but rather understand that this is part of your process and not personal.

The older a debt gets, the less likely you are to collect the full amount. It's important to clean up old debts and start a proactive billing approach that involves a collection agency in order to avoid future bad debt. According to statistics from the Commercial Law League of America, after a debt is 3 months old, you're likely to receive only a 73% return on every dollar. As time passes the amount of payment you're likely to receive decreases drastically. Teaming up with a high quality collection agency can have an incredible impact on your ability to recover funds and greatly improve the overall profitability of your company.

 About the Author
Ruben Soliman is a freelance copywriter. For more information about what a collection agency can do for you visit aabusa.com.

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