If your business is sitting on a mountain of bad debt, you may want to think about selling it.
Why? Because it’s a quick way to accelerate your business’ cash flow and liquidate debt that is going nowhere fast.
Understandably, businesses can be reluctant to unload unpaid accounts, particularly when it could mean losing control of the collection process and potentially stirring up bad public relations through an overzealous third party.
But with there are ways to avoid those pitfalls. Here’s an excellent article – tailored largely to the healthcare industry – that will walk you through the process. We’d be happy to offer our assistance, too. So here are a few pointers, courtesy of the Healthcare Financial Management Association and Premium Asset Recovery Corp.:
When choosing an agency, ask the following questions to determine whether your uncollected debts will be handled properly :
- Does the purchaser handle accounts sensitively, minimizing patient complaints?
- Are the purchaser’s employees well trained and professional?
- Does the purchaser specialize in healthcare receivables?
- Does the purchaser itself service the accounts, or does it resell or outsource accounts to third parties?
- Will the provider be able to recall accounts that prove particularly problematic?
Then, before entering into an agreement, you might want to include parameters like these in the contract:
- Collectors will handle accounts with courtesy and professionalism.
- Collectors will be adequately monitored to ensure compliance.
- Collectors will be restricted or prohibited from using body attachments and liens on residences.
- Provision will be made for the hospital to recall accounts that may subsequently be identified as sensitive or requiring higher levels of attention.
- Collectors will be trained in and adhere to HIPAA privacy rules.
- Compliance will be confirmed from time to time.
Does that help? We hope so. Knowing when to sell your accounts receivable can be a boon for your business.