Unlike our predecessors, we are tasked with sorting through an exuberant number of options when it comes to outsourcing for our businesses. What was once traditionally done in-house is now being done externally. While the advantages of outsourcing are clear, we must make sure we are choosing the correct partner to do business with. The sheer number of third-party service providers out there is astounding. Understandably, you would hesitate to trust in just one. In this case, the benefit outweighs the fear and the correct partner could result in a lot more money in your business. It will also create a lot more visibility into your reporting. These companies are designed to focus solely on the clients billing operation. In the small to medium-sized business arena, many billing departments are wearing multiple hats. A billing management service can dedicate 100% of their time and focus on collecting your claims. You’re bound to get better results this way.
Outsourcing Your Billing
When deciding to outsource your billing, one of the first things you’ll want to know is what the billing company charges for their services. Most billing companies charge a specific percentage of the amount claimed. Though the percentage rate varies between companies, sometimes charging as low as 4% or as high as 11%, there seems to be an industry standard of charging around 7% of the uncollected claims. Some billing companies have implemented a per user, per hour model. In this model, your business and the billing company would agree upon a rate. You would be charged the rate to a certain number of hours and then any overages would be tallied and added to your total.
As a business owner, you will want to nail down what is included in the billing service you are thinking about working with. Some of the billing companies that charge the higher percentages may end up saving you more at the end of each year because they have included taking on the fees associated with your billing operation. The right billing partner will fit seamlessly into your process. They will help alleviate the stress of collecting outstanding claims as well as ensuring an efficient and timely billing procedure. You will want to find the company that can offer the maximum reimbursement on claims for the work you have done.
To some extent, the cost of your outsourced billing will be customized to your business’s needs. You will want to get proposals from multiple companies to compare how each service fits with your business. Look at choosing your billing partner as you would look at choosing your bank card. The card you choose based on an annual fee or lower percentage rate may not be the card someone else would choose because their priorities in a card are different. You will want to find out what type of billing company has your best interest in mind and is best suited for your needs. Take the time and do research because the right billing company could help turn your declining collections rate around, helping you to increase cash flow and alleviate the stress of payroll.
Most billing companies will fall into one of three categories: light, full service, or boutique. Determining what level of service you need will be another critical factor in determining which billing company to worth with. Light encompasses the level of service offered by many software vendors. Think about it like this, the software is doing the work. Full-Service, which is also offered by some software vendors as well as most traditional billing service companies is what it sounds like. These companies will get involved with your business early on and will want to assist in providing technology, tools, and insights to help you verify your clients before even doing business. Boutique, this level of service is offered most often by smaller billing companies that work with businesses that want them to handle all the business aspects of running their business. The boutique level of service will run your billing for you.
Low Cost, Hidden Fees
Like any industry, the billing industry is flooded with both reputable and unreputable companies. You will want to do your due diligence. Your billing operation is a crucial part of your business. Your ability to collect your claims and outstanding payments could make or break your business in this competitive climate. Be careful if a billing company is charging you a significantly lower percentage rate than that of its competitors. The companies charging a much lower rate may be cutting corners in terms of service and reliability. They’re saving money but it could be costing you more in uncollected claims.
When considering if outsourcing your billing is a good financial decision, you will need to consider all the tangible and intangible costs of your current billing process. For example, you may have already thought about hourly wages, taxes, benefits, the cost of the software for your team to actually execute the billing process but have you thought about the cost of increased rejections or denials and the expected increase of net collections and cash flow. You will want to determine the actual cost of your billing process before you outsource your billing management.
No Long-Term Contracts
There are billing companies that require you to sign long-term contracts. This may lock you into a desirable rate but be careful not to enter a long-term contract that is too long. You want the freedom to switch partners or bring your billing internally at your discretion. You also want your billing company to have the incentive to work feverishly for you. This is the team you are allowing into your business to manage your billing process and it is their job to make sure bills are getting paid, there is money for payroll, and that you’re getting paid.
You Get What You Pay For
Our world is constantly evolving. Your business must constantly evolve to stay relevant and your industry is constantly evolving too. As things change, so do the processes that we as businesses perform. The world of billing is also changing at a pace that makes it hard for businesses to keep up. This is where a billing service can prove vital. A growing number of businesses find themselves turning towards an outsourced billing management partner to help with the administrative burden and operational costs tied to the billing process.
Here are a few questions that can help assess your current process and identify whether you should outsource your billing management:
- What is the actual cost of your internal billing process?
- Does your current staff have the skills and expertise necessary to handle the burden?
- What is the expected return on your investment of outsourcing your billing?
- What type of billing management partner does your business need?
- Is your account receivable greater than 45 days?
- Are you seeing a decline in revenue despite continued growth?
- Is your net collection date declining?
- Do you experience turnover with your internal billing staff?
Things to expect from Outsourced Billing Initiatives
- Time Savings
- Faster Collections
- Real-Time Records
- Cost Savings
- Fewer Rejections and Denials
Need Help Outsourcing Printing and Mailing Related to Billing?
If you found this article to be helpful and you are interested in partnering with someone to outsource your printing and mailing associated with your billing, consider working with Towne Mailer. We will take care of all your bill printing and mailing needs. Our goal is to integrate with your business effortlessly while developing a successful collaborative relationship that will grow as your business grows. We want you to feel comfortable trusting us with your business needs and we treat our clients like family!
There is a reason why successful business owners all over the country are making the jump to outsource their bill printing and mailing. Contact Towne Mailer today and let us show you why.