Debt Recovery

In the high-stakes world of financial services, your recovery strategy is an extension of your brand’s integrity. For banks, credit unions, and FinTech issuers, a delinquent account is a manageable loss—but a data breach or a regulatory fine is a catastrophic liability. Nexa provides the “Velvet Hammer”: an institutional-grade recovery model that fuses elite cybersecurity with a diplomatic, white-labeled outreach strategy designed to protect your reputation and your bottom line.

Nexa provides a reputation-safe approach, equipped with all 50-state collections license, offering free credit reporting, free litigation, free bankruptcy scrubs, and zero onboarding fees. Secure – SOC 2 Type II & GLBA compliant. Over 2,000 online reviews rate us 4.85 out of 5. 

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Transparent Pricing: Strategic Paths to Capital Recovery

We believe that recovering institutional capital shouldn’t be a financial gamble. We offer a two-tiered pricing model designed to maximize ROI across the entire life cycle of a credit card account:

• Phase 1: The $15 Fixed-Fee “Early-Out” Program:
  Ideal for pre-charge-off accounts (45–90 days past due). For a flat $15 per account, we provide professional outreach. Cardholders pay you directly, and you keep 100% of the recovered funds. This is the ultimate “administrative fix” for early-stage delinquency.

• Phase 2: Contingency-Based Recovery (30%–40%):
  For post-charge-off portfolios or aged debt. This is a No Recovery, No Fee model. We utilize intensive skip-tracing and professional mediation, and you only pay a percentage of what is successfully deposited back into your institution.

Secure Your Institution’s Cash Flow – Contact Nexa Today

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Bank-Grade Security & Infrastructure: Your Compliance Shield

For financial institutions, security is the primary barrier to entry. Nexa’s infrastructure is engineered to exceed the rigorous audit requirements of the banking industry.

• SOC 2 Type II Certified: Our internal controls are independently audited to ensure the highest standards of security, availability, and confidentiality.

• GLBA & Regulation F Compliance: We adhere strictly to the Gramm-Leach-Bliley Act and CFPB Regulation F, ensuring Non-Public Personal Information (NPI) is shielded and dunning frequency is strictly governed.

• Hardened Connectivity: Mandatory high-level VPNs and Multi-Factor Authentication (MFA) are required for every employee. Data in transit is protected by PGP encryption.

• PCI DSS Level 1 Standards: As a partner to credit card issuers, we maintain strict payment card industry standards to ensure secure transaction processing without storing sensitive card data.

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Technical Integration: Zero-Latency Onboarding

We understand that for modern issuers, manual data entry is a relic. Nexa provides a scalable technical layer that integrates seamlessly with your core banking or Loan Origination System (LOS).

• RESTful API Ecosystem: We offer secure API endpoints for real-time account placement and status updates, allowing your internal systems to “talk” to our recovery engine instantly.

• Webhook Event Notifications: Receive automated “pings” the moment a payment is made or a dispute is raised, ensuring your internal ledgers are updated with zero latency.

• Secure SFTP Batching: For traditional institutions, we support encrypted SFTP batch file transfers for high-volume portfolio management.

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The “Velvet Hammer” Philosophy: Protecting Your Institutional Brand

Financial institutions are under constant scrutiny from regulators and the public. A single “rogue collector” can trigger a PR crisis or a regulatory audit. Nexa utilizes The Velvet Hammer approach to mitigate this risk.

We rebrand our specialists as “Account Reconciliation Concierges.” We don’t call to demand cash; we reach out to help your cardholders navigate billing confusion, insurance gaps, or temporary financial hurdles.

1. 100% Call Recording: Every interaction is recorded and archived for audit transparency.

2. Random Quality Audits: Our compliance team performs daily reviews to ensure our Concierges remain empathetic and helpful.

3. Sentiment Analysis: We utilize AI-driven analysis to monitor call tone, ensuring your brand is always represented with the highest degree of professionalism.

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Strategic Intervention: Beating the “90-Day Cliff”

Current industry data shows that the probability of recovering credit card debt drops by nearly 50% once the account passes the 90-day mark. Our strategy is built to intervene before the debt “goes cold.”

• Pre-Charge-off Early Intervention: By using our $15 Fixed-Fee model at Day 45 or 60, we act as a white-labeled extension of your billing department. This “soft-touch” dunning cycle resolves confusion early and maintains cardholder loyalty.

• Consumer Self-Service Portal: We provide a 24/7, SOC-compliant payment portal where cardholders can resolve debt, set up installment plans, or dispute charges privately—reducing friction and increasing recovery rates.

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Recent Recovery Results: Institutional Case Studies

• Regional Credit Union Recovery:
  A mid-sized CU had $144,500 in delinquent card balances. Using our Phase 1 ($15 Fixed-Fee) service, we recovered $97,800 within 90 days. The total cost to the CU was only $1,500, allowing them to retain 98.5% of the capital.

• FinTech Issuer B2B Recovery:
  A digital lender was “ghosted” on a series of commercial card accounts totaling $9,800. Our Account Reconciliation Concierges successfully mediated payment plans, securing full settlements within 21 days while preserving the corporate rapport.

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Frequently Asked Questions (FAQ)

Q: Can you collect from cardholders who have moved out of state?
Yes. We are licensed to collect in all 50 states, following the specific debt collection laws of the debtor’s residence.

Q: How do you handle account disputes?
Our specialists are trained in professional mediation. When a dispute is raised, it is immediately logged in our system, and a Webhook notification is sent to your team for review, ensuring full transparency.

Q: Is there a minimum portfolio size?
No. Our $15 fixed-fee model makes it cost-effective to recover even small balances or single-account delinquencies that traditional agencies would ignore.

Recovering Credit Card Debt Nationwide Contact Us Higher Recovery Rates: Top-Notch Customer Service

 

As a full-time dentist and businessperson with a solitary dental practice, you are obligated to borrow values from both professions to form a devised strategy to effectively run your business. You are aware that a business establishment does not run on “debit” and that you will need all finances to be straightened out in order to keep your practice from hitting the bottom of the barrel. But dental practices have been following a painstaking financial liability scheme for some time; one that involves accounts receivable.

Accounts receivable (A/R) can be a tricky financial situation for a dental office, on one hand, you want the value-add to your clients of an assignment office but on the other, more negative hand, you don’t want to drown into the thousands of dollars in an A/R balance. Money conversations involving A/R balances are common in dentistry.  In most dental practices, the teams have money conversations with patients as many as five times before reaching a resolution and having the monetary spends handed over. It can get very difficult to collect your A/R balance if you are not super focused and strict about receiving them.

Keeping that in mind, we have come up with a list of the best tips and tricks on how you can prevent an A/R balance and how to tackle one if it has been recorded in your bill books. Stop chasing signatures for checks and get paid quicker with these hacks.

1. Make sure the patient’s information is up-to-date

A/R problems can be combated head-on if you have a proactive system for organizing your patient’s details. The main reason why dental practices accumulate a large sum of A/R over time is that their check-in process is inept or incomplete. Make sure your patient’s information is up-to-date in your system. This includes verifying their address, pre-authorized form of payment, insurance information, etc. You need to also ensure that you have communicated to your patient their portion of the cost uncovered by insurance.

The more information you have about your clients, the easier it is to file claims and actually get paid due to it. Otherwise, you will be chasing ghosts or filing claims that are dotted with outdated policies. Double-check all your records, preferably when the patient checks in prior to the appointment.

2. Pre-estimate the insurance with your patient’s insurance company

The next key step to doing away with A/R claims is for you to check-in with the patient’s insurance company. You will also need to make a few calls here and there to pre-authorize the procedure with your client’s insurance company. Doing this lets you be in the loop of how much of the expense will not be covered by insurance. Keep a credit card on file for every patient and get access to use it. This is a great way to clear out small patient portion balances. But, in doing so, make sure you have a safe and secure way to store it as well as legal authorization to use it.

3. Discuss the treatment plans with patients upfront

Reducing A/R balances in your billing system entails a comprehensive approach for you to communicate to the patients the need and importance of a complete fee. For this, you will have to make your patients understand the need for treatment and recognize what the procedure can do for them in clear detail. This meeting is crucial for your patients as well as your practice as you are essentially “selling” treatment to a patient with their own consent and understanding. Long-term preventive care and treatment are the hardest to convince your patient to avail of.

You need to learn to talk to your patients as you would a family member or friend to emotionally connect and empathize with their personal and financial circumstances. Be the patient’s advocate and convey to them the benefit of completing payment head-on. These small, seemingly insignificant interactions about payoff can lead to less time spent collecting fees and more appointments to fill your calendar.

4. Educate your patient on the insurance charges

A lot of patients who come into your clinic are not aware of their insurance coverage and their benefits. You will have to educate your patients about their coverage benefits and its different tiers, levels, copays, inclusions, and allowances. Even if the patient has scanned his or her plan, there may still be some limitations and inconsistencies that are not obvious in the plan summary. By talking to your patients about their insurance, you are in a way relating to the patient’s issues which would give you an opportunity to connect with your patient.

5. Provide third-party patient financing

Instead of providing patients with payment plans and struggling to collect them, try offering third-party patient financing as a way to manage your practice A/R. Use two or three different companies to help finance the patient. But be careful to do your research and make sure that you are working with a reputable company that will add value to your patient experience. Doing this selectively will create patient loyalty and allow them to accept the treatment that they need, which will help boost your case acceptance. You will be prioritizing your patient’s needs over your own by this action due to which your patients will be more likely to stay with you and refer.

6. Employ insurance verifier technology

Insurance verifier technology allows you to visualize up-front which codes require claim attachments to adjudge a claim. Reviewing claim attachment requirements before submitting a claim as this helps you provide or attach appropriate documents such as perio-charts, x-rays, as other procedural documents, in advance. Doing this up-front will help you get paid quicker and not have your A/R balance crank up. In cases where you may not attach verifying case attachment documents with your claims, there is a huge possibility that the payer may reject your claim due to a lack of required documentation.  Installing an insurance verifier technology helps save time and keeps revenue surging.

7. Bill frequently, Remind promptly

Consider billing on a net-15 or net-10 basis instead of the customary practice of waiting 30 days. By being on top of your patient’s monthly obligations, you will naturally get more payments. You can contact your patients through their preferred media – be it email, call, text, and so on. It is important to contact your patients if you do not hear from them even after billing.

• Patients that are 30 days overdue or under can be easily tackled by having a credit card on file. In case you do not have a credit card on file, give your patient a call every few days to remind them of the payment.
• Payments that are between 30 and 60 days overdue can be harder to collect but with a strategized communication plan, it can be combated.
• Payments that are over 90 days overdue can be a challenge to collect. Give the patient a call every other day for the first 10 days. If the issue has not been resolved by then, you could send a letter each week for the next three weeks. If neither phone calls nor request letters work, you may try mailing a demand letter.

8. Hire a collection agency to collect your fees

Alternatively, you can hire a collection agency to contact your patients about their payments so that you do not look vicious and “money-hungry”. If you have noticed that your staff has been contacting your patients frequently, it is time to outsource to a collection agency who will attempt collection on your behalf. These collection agencies will charge anywhere between 20 to 40% of what they collect.

Know your numbers and take action accordingly. Implement any of these strategies to help lower your A/R balance and get paid faster!

Collecting outstanding debt isn’t an easy process. If a consumer has allowed their obligations to go into delinquency they’re usually either experiencing significant financial difficulty, they’re grossly irresponsible, or they have no intention of paying. None of these situations are amenable to fast debt recovery.

Companies will generally try to collect on their outstanding accounts internally before passing their most egregious cases on to an external debt collection agency. But how wise is this? Are collection agencies effective enough to warrant their fees?

Absolutely. Collection agencies are experts in debt recovery. The most effective agencies have perfected a proven process for their agents to follow that dramatically increases the chances of collecting a debt. Even after their contingency fees, a collection agency is typically able to recover lot more money than the client can do by themself. Plus they take away all the troubles that your staff has to undergo while chasing your unpaid bills.

Not only should companies trust collection agencies to handle their debt recovery, but they should also pass the debt on to the agency sooner than they do in many cases. That’s because debt collection success is a factor of time, skill, and reputation, all of which favor collection agencies.

Recovery Rates Drop As Debts Age

The longer an account remains delinquent, the less likely it is to be recoverable. An outstanding balance that’s one month old has a 94% chance of being collected. By two months that drops to 85%. It falls to 74% collectible at three months, and by six months, only 58% of debts remain viable. At a year, there’s only a 27% chance of recovering the debt.

These percentages assume skilled debt collectors with modern collection tools at their disposal, like those found at agencies. Internal collections departments fare even worse. It’s better not to wait too long to pass your outstanding debts on to a professional.

Collection Agencies Have Advanced Tools and Training

Debt collection is their business, after all. It’s how they make a living. This means collection agencies have just as much of an incentive to collect your debt as you do. It’s rare to find this sort of win-win relationship in business.

Agencies offer their agents rigorous training and access to advanced tools like skip tracing and bankruptcy scrub to improve the accuracy of their collections.

Skip tracing techniques allow agents to track down debtors that have “skipped” out on their debts and are no longer reachable. Bankruptcy scrubs alert agents when a bankruptcy filing occurs so they can move quickly to avail themselves of the proceedings as efficiently as possible.

These and other techniques aren’t always available to internal collections teams, reducing the effectiveness of their efforts.

Debtors Are More Likely to Pay A Collection Agency

When a debt passes from the original creditor to a collection agency, this escalation often makes debtors pay attention. There’s an implied threat when an agency gets involved that doesn’t exist with the original creditor. People that are having financial difficulties, or are just irresponsible will often string their creditor along. When a collection agency begins calling, the debt feels more palpable.

Collection agencies also know how to speak with debtors to motivate payment. That doesn’t mean they threaten them, because they generally don’t. Instead, they use a sophisticated arsenal of psychological tactics to push people toward payment.

As a third-party agent, they can have conversations with debtors that are difficult for the original creditors. They can act as an intermediary or position themselves as a helpful friend instead of an adversary. These are all benefits not afforded to the original creditor.

Collection Agencies Mitigate Legal Risks

Every state has laws governing how debts can be collected. Most creditors are unaware of these. And because they aren’t consistent, businesses that operate in multiple locations may have to follow different regulations depending on the customer.

Collection agencies are intimately familiar with all of these legal frameworks and operate within them daily. Using an agency can shield you from running afoul of these laws.

Collection Agencies Are The Most Effective Option

Quality agencies enjoy a higher success rate than original creditors, are more affordable than lawyers and legal proceedings, and use diplomatic techniques that allow companies to preserve their relationships with their customers.

You should undoubtedly attempt initial collection efforts, but once your delinquent accounts seem unrecoverable, you should trust a collection agency. Their fees might seem high, but keeping 70% of a debt you likely wouldn’t have collected otherwise is a net positive transaction. And if you don’t receive anything, the service costs you nothing. As stated earlier, it’s a win-win.

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The quicker your business is able to collect on outstanding invoices, the healthier it will be financially. It’s better for cash flow purposes and saves money and headaches associated with trying to collect delinquent debts.

The AR turnover ratio is a standard metric used to determine the pace with which businesses are able to collect their debts. It isn’t difficult to compute and knowing your company’s ratio will give you a benchmark against which you can judge attempts to collect invoices more rapidly.

How To Compute Your Business’s Accounts Receivable Turnover Ratio

To compute this ratio you’ll need to know your company’s net credit sales and your average accounts receivable. These numbers are available on your company’s balance sheet.

To compute this ratio you’ll divide your net credit sales by your average AR. Here’s a bit more information on these two measures.

Net Credit Sales

This is the portion of your annual sales that are tied up in invoices. To compute your net credit sales you’ll take your total annual sales and subtract any cash sales, sales returns, and other allowances, such as price changes and discounts.

Average Accounts Receivable

This represents the average amount of money owed to your business as invoices at any given time. You’ll compute this by adding your accounts receivable amount from the beginning of the year to the amount from the end of the year. Then you’ll divide by two.

Let’s say you had $20,000 in AR at the start of the year and $35,000 at the end.

$20,000 + $35,000 = $55,000

$55,000 ÷ 2 = $27,500

This shows that your average AR is $27,500 for the year.

Computing Your Accounts Receivable Turnover Ratio

Let’s say that you had $150,000 in net credit sales for the year. And we now know your average AR was $27,500. To compute your AR turnover ratio we’ll use formula detailed at the top of this section.

$150,000 ÷ $27,500 = 5.45

Your accounts receivable turnover ratio is 5.45. This means that your AR turned over 5.45 times in the last year. To put that in terms that are easier to understand, divide the total number of days in the year by your ratio.

365 ÷ 5.45 = 66.9

This tells you that it took an average of about 67 days for you to collect on an invoice. To collect invoices faster, you need a higher ratio. As an example, had you found your ratio was double what it is, or 10.9, you would know that you’re collecting invoices in half the time, or in 34 days.

Now that you know your AR turnover ratio, what can you do to improve it?

Improving Your Accounts Receivable Turnover Ratio

A low AR turnover ratio can indicate poor collections policies and/or a larger than ideal percentage of financially irresponsible customers. For the health of your business, you should try to increase low ratios. Here are a few things to try.

Invoice Immediately

In order to collect payments quickly, it’s best to invoice while your work is still fresh in your customer’s mind. Send out invoices as soon as the work is completed. This shows you’re serious about your credit collection policies.

Include Early Payment Discounts and Late Payment Penalties

You can offer a small discount to entice customers to pay their invoices earlier than required. You might also charge a penalty for late payments beyond a certain point. If your terms are normally net 30, you might offer a 3% discount for payments made within 15 days.

Penalties shouldn’t be onerous. You don’t want to punish your customers. You only want to motivate them to pay. 1.5% interest per month that the invoice is late might be appropriate.

Give Your Customers a Range of Payment Options

Let your customers pay you however they see fit. This helps their payment processes and can get you paid faster. Offer links to online payment options directly within your invoice and also allow for credit card payments, checks, bank drafts, and more.

Take Deposits Upfront

An upfront deposit ensures that you’ll receive at least some portion of your total invoice. A deposit also gets your customer to put skin in the game, which increases the likelihood that the remainder will be paid on time.

Send Out Regular Reminders

Use an automated invoicing system to send automatic emails when your customers become delinquent. Oftentimes a friendly reminder is all it takes to get paid.

Stop Working With Problematic Customers

Customers that pay egregiously late on a regular basis will drag down your AR turnover ratio and cause constant problems for your business. Consider whether you might be better off not working with them.

The longer invoices remain unpaid, the longer your business can’t use that money to pay its own bills. Try these suggestions to get your AR turnover ratio higher. Your business will thank you.

Important Conclusion:

The turnover ratio is a measure of current liabilities and an indicator of a low collections model.

If the ratio is too high, means a business has very aggressive collections practices, which may drive new customers or even loyal customers to the competition.

Finally, it’s good to keep records of different ratios over different periods (months, quarters, etc) so the business can adjust its collections practices accordingly.

Businesses that are faced with collecting on delinquent invoices often don’t know where to begin. They tend to react with anger, the assumption being that the customer is intentionally trying to rip off their business. While this may feel warranted, it isn’t an ideal approach. A better assumption to start your collections process with is this:

Very few people don’t pay their debts simply because they don’t want to.

Most people aren’t criminals trying to steal from you. They have reasons why they haven’t paid. It could be that someone in the household lost a job or some other source of revenue dried up. They may have gotten themselves into debt and are now having a difficult time digging out.

Instead of pursuing them out of anger, it’s better to use a diplomatic approach that treats them like human beings, not deadbeats. When you consider their circumstances and attempt to open up a friendly dialogue you’ll enjoy collections success far more often. There a number of other reasons why a diplomatic approach is better as well.

Diplomacy Preserves Your Relationship

If you demonize delinquent customers and pursue them in a combative manner you’ll almost certainly sour the relationship. You might be able to collect what you’re owed, but you’ll lose any future business. This can be a penny-wise, pound-foolish decision.

Your customer’s circumstances will likely change. If they lost their job, they’ll find a new one. They may be having difficulty paying bills now, but that won’t last. If you approach them in a friendly, understanding manner, and work with them to find a payment plan that works for them, they’ll actually appreciate you more. Not only will you get what you’re owed by you could have a customer for life, promising significant future revenues.

Diplomacy Gets Your Customer to Call You Back

Customers don’t respond to anger and threats. If you leave a menacing message in someone’s voicemail you may cause them to retreat in fear and ignore future messages. They know they owe you money and in many cases, they don’t know what to do. Adding threats only compounds their problems.

On the other hand, leaving a calm, understanding message that stresses your desire to work with them to find a solution that they can afford gives them hope. It helps them to see that there is a light at the end of the tunnel. Their fear of repercussions is replaced with an optimism that they’ll find a way out of debt.

When someone feels you’re on their side they’re much more likely to call you back.

Diplomacy Is Easier on Your Collections Staff

The way we treat other people has an effect on how we see ourselves. Imagine if you had to spend each workday stalking and yelling at people that you knew were already down on their luck. It would take a toll on your psyche.

Taking a diplomatic approach to debt collection allows your staff to have conversations with people instead of threatening them. It lets them get to know your customers better instead of treating them like delinquents.

Instead of feeling like they’re chasing people down, your staff will feel like they’re helping people. And that’s because they are. Diplomatic debt collection is about helping your late-paying customers find a solution to their situation. It’s a positive process that benefits you and them. When your staff approaches the situation in this way they’ll report higher job satisfaction and you’ll experience less churn.

In the end, a diplomatic approach to debt collection is better for your business, your staff, and your customers. You’ll collect more debts, faster, and you’ll retain those relationships into the future.

In one of our previous blogs, Using a Revenue Recovery Service to Recover debt, we discussed the risk undertaken by a business extending credit to another business, or consumer, by providing services in exchange for a promise of “due and proper consideration”. In layman’s terms, this means that a company extends credit to a customer by issuing an invoice for a product or service already provided and then expecting payment of such product or service in the near future. In accounting terms, this process bears the name of ‘accounts receivable’.

In order to help medical practices and businesses monitor and control that credit risk, we have compiled this list of best practices for the management of accounts receivables:

1. Always state the terms and conditions of payment clearly in the contract, even when dealing with friendly patients or reputable companies. 

A payment provision ensures that the customer is aware of what happens should they default on the contract, and lists any fees, interest or penalties associated with non-compliance. In addition, it helps your business automate the accounts receivable process, especially when you tend to use the same payment terms for all your customers. In the case of a medical practice, checking a patient’s insurance and making sure they understand their co-pay and deductible during that first introductory meeting is paramount. Not only will they be more likely to have the payment readily available when they walk through the door for future appointments, but it will give them a sense of control and safety over their ability to pursue medical care and pay for it.

2. Do not assume that a future receivable is money in your company’s coffers now. 

One of the most important risks to a company’s growth and profitability is expecting money you don’t have yet and then using that as credit to take further risks. Even though a receivable is recorded on your balance sheet as a current or long-term asset, depending on whether the balance is due in less than a year or more, it carries a high risk of long-term debt to you or even an uncollectable account. Make sure your patients understand your billing policy by stating it on initial bills and later payment reminders, including details such as the billing cycle, any deadlines they must meet, the options to pay online or over the phone, any fees for the options, and the option to arrange a payment plan for special cases, if you can offer them. Offer incentives for patients to pay their high deductible in a lump sum.

3. Carrying the lowest possible level of bad debt involves having a sound credit policy and shortened collection periods. 

As a business owner, you have to extend credit only as far as your business can afford the risk. There is always an allowance for doubtful accounts, but don’t become negligent about how much you allow. One way of monitoring this is tracking a patient’s pattern of paying their bills to you. If you realize that a patient has a hard time paying some bills but not others, give them the benefit of the doubt. Do they tend to pay their bills more consistently when they receive their paycheck? When their kids’ school year starts so they don’t have to pay for childcare while they’re on vacation? Getting to know repeat customers with a periodic phone call can give you more insights into their situation, which in turn can help your business decisions about their account.  A human touch pays off.

4. Always verify the patient’s current address and contact information, as well as the best time to contact them. 

Otherwise, it will take you more time later to track them down, delaying a payment they might have made promptly if you were able to reach them quickly.

5. Never threaten to send your patient’s account to a collection agency except for cases when it is legally allowed and you actually intend to do so.

Medical collections fall under the purview of the FDCPA, which means, among others, that you can’t use an abusive, deceptive or unfair practice to threaten an action that you don’t intend to take, make a collection call before 8 a.m. or after 9 p.m. in the patient’s time zone, or call their place of employment if the patient has not given you permission to do so. There are many other legal prohibitions, for instance disclosure to a third party without their permission, such as to a daughter, neighbor, or baby-sitter that the customer has a debt, stamping ‘outstanding balance’ or ‘past due’ on envelopes addressed to your patient, or contacting the patient by postcard for the purpose of collecting.

6. Make sure you use the right codes. 

One of the biggest problems for health care providers is having a claim denied and then having to reprocess it. Codes are changed, deleted or introduced every year, and you can use “cms.gov” or “findacode.com” to quickly verify if you’re using the correct codes.

7. Understand when a decreasing total for accounts receivable is indicative of your practice’s good financial health and when you should worry.

You should see decreasing accounts receivable as good when your cash inflow increases. That means that the amount of debt owed to your company has decreased. The other side of the coin is when you decrease accounts receivables by writing debt off as forgiven or uncollectable. You should be able to deduct that on your tax returns, but having too many such deductions or listing them year after year should be a sign that you need to change the way you manage your accounts receivable.

8. Don’t ignore the importance of human error and staffing. 

Given the increasing trend of insurance companies to deny claims for the smallest of errors, you need to offer sufficient training and documented best practices and monitor how well staff applies them so you can rely on them to keep accurate records, track and correct errors, communicate efficiently, report issues and come up with solutions, use overtime only as strictly needed, and make other important day-to-day decisions.

9. Use the marketing methods that are at everyone’s fingertips these days.

This means not only word-of-mouth but also online tools such as Facebook, Instagram, Google Ads. Your practice can increase significantly by acquiring new patients. That being said, beware of public negative reviews and your response to them. Leaving a bad review unanswered will insert doubts into potential patients’ minds or confirm some borderline experiences they’ve had in your office. Your reputation as a sole practitioner is what can help your business grow or stay afloat.

10. Maintain clear records of your practice’s attempts to collect an outstanding balance. 

That will not only inform your decision to seek help from a debt collection agency or write off the debt, but it will also prove to the IRS that you made a reasonable effort to collect on a debt you intend to deduct on your taxes. You have to keep in mind that the debt is only deductible in the year the debt becomes worthless.

Finally, always remember that accounts receivable is different from a cash transaction in that the payment takes place at a later time.

For that reason, an unreceived payment carries a higher risk for the business awaiting the funds. The balance due from the debtor may take from a few weeks to more than a year to be received by the crediting business (i.e. the creditor), which may leave the creditor exposed. For medical practices, the risk is often even higher because of the hoops they have to jump through with patients and third parties, such as insurance companies.

These are all reasons why your business needs to invest in ways to manage accounts receivable to minimize the financial risk associated with them and convert them into solid cash sooner rather than later.