To help alleviate your concerns and to educate your customers about medical staffing invoice funding, consider the following:

Medical staffing factors only work with agencies who qualify for credit.

Similar to getting a bank loan, staffing agencies go through due diligence before an invoice funding company will agree to purchase their receivables. If your company is able to secure financing, it is a positive sign that you operate a stable, growing business. Moreover, the ability to factor is dependent on the creditworthiness of your customers, not your own.

Medical staffing invoice funding is beneficial for both you and your customers.

Your customers are most likely accustomed to taking 30, 60 or even 90 days to pay for your staffing funding services. By factoring, you can maintain a “business as usual” relationship – your customers can continue to utilize your medical personnel and have time to pay for their shifts. The only difference with medical staffing invoice funding is that your company benefits from having money today, in order to more readily satisfy current obligations, while still experiencing growth.

Factoring is a smart business move for growing medical staffing companies.

A business most often uses financing obtained through the sale of receivables to expand and take on larger contracts, without compromising the quality of their services. By getting money sooner than later, your staffing business has the resources to focus on critical success issues – sales, operations and growth – while still meeting its demand.

Many of your customers may already deal with factors and may not be aware of it.

Factoring is one of the oldest methods of providing working capital to help businesses solve their cash flow needs. Credit cards transactions are actually the most common form of factoring used every day. Many hospitals and physicians’ practices factor their medical receivables due from insurance companies and therefore are already familiar with how factoring works and why companies choose to do it.

Educating your customers about why you decided to obtain staffing funding services should eliminate many of their concerns, and invoice funding firms are available to help explain your new financial situation. For too long, factoring was only available to large, multi-billion dollar corporations. Now there are specific invoice funding firms that provide medical staffing funding services to companies like yours, so you can enjoy both the perception and the reality of being a growing, profitable company.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the medical staffing invoice funding market place. Through a process known as factoring, PRN Funding provides staffing business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding http://www.prnfunding.com provides staffing companies with flexible and immediate access to capital.

Article reprinted with permission by PRN Funding, LLC.

Banks are not approving loans like they used to and recurring cash flow challenges for medical supplies companies are not going away.

Medical supplies factoring has been evaluated in the past, but this alternative financing option is becoming a popular and convenient solution to cash flow problems.

Most medical supplies companies do not receive payments for their goods until weeks after they have been delivered. In fact, a common cycle occurs when companies need to order additional products to ship out to their customers before they have been paid by those same customers.

By factoring their receivables,these companies can improve their cash flow tremendously, giving them enough cash to buy new inventory regardless of when their customers pay.

Factoring is Not a Bank Loan

Factoring offers a huge advantage for companies because unlike a bank, the factor’s main concern is the credit rating of the customer who is responsible for paying the invoice. In addition, the only collateral used by the factor is the receivable, whereas a bank would often require personal collateral to secure a loan. Also, many of factoring firms do not require long-term commitment. Therefore, a company can factor its receivables for as long as it likes.

Factoring Promotes Business Growth

Another advantage of factoring is that it alleviates the hassles of the collections process. Once the company sells the receivable, the collection process can be handled by the factor. Medical supplies companies don’t have to worry about making collections calls, following up on skipped invoices or hunting down missing documents. This saves time and money and allows companies to allocate resources to more important day-to-day operations of the business.

Factoring is Easier to Find than a Bank Loan

There are thousands of factoring companies to choose from, so finding a company that will factor medical supplies accounts receivables is easier than ever. For example, type ‘medical supplies factoring’ into a search engine, and a slew of factoring companies will show up in the results. While there are many factoring companies to choose from, they differ on a large scale. Some may serve an array of industries, while other only factor invoices for a specific industry. Some operate nationally, while some focus their attention in one geographic region. Of course, there will also be many different advance rates and factoring fees amongst factoring firms.

With the current economic climate, it’s likely that more medical supplies companies will turn to factoring firms for financing. It allows start-up companies to develop and helps veteran companies continue to thrive.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the medical supplies factoring market place. Through a process known as factoring, PRN Funding provides business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding provides medical supplies companies with flexible and immediate access to capital. We give you the freedom to factor what you want, when you want, whom you want, for as long as you want. Prior to founding PRN Funding, Mr. Cohen was an executive officer of The MRC Group, a national provider of Medical Transcription Services. Contact Philip Cohen at toll-free 866.776.5407 or via email at pcohen@prnfunding.com. Please visit PRN Funding, LLC on the web at http://www.prnfunding.com/

Article reprinted with permission by PRN Funding, LLC.

But if you are only concentrating on the “money” side of the business, then you are only focusing on half of the issue.

There are many reasons invoice factoring is beneficial (vs. getting some sort of traditional loan or line of credit).

So why do companies choose to go the Factoring route?

1. Cash Now

We all know that money now is better than money later. A business that is short on cash can not pay it’s own bills let alone take advantage of deals that come their way. With factoring, the business has cash in as little as 48 hours after an invoice is created.

2. No Debt

Not that most businesses can qualify for a bank loan nowadays anyways, but a loan is a debt, plain and simple. Any debt affects the business going forward (and not in a positive way). Factoring is not a debt, nor is it a loan. It is merely the sale of an invoice at a discount.

3. Flexibility

The business decides how much or how little cash it needs. When it comes to Factoring, the business does not need to sell all of its invoices. They can pick and choose which ones make sense – and when they need the money the most.

4. Screening

Instead of “hoping” that their next client pays on time, the Factoring Company can assist with “new client screening.” This can help ensure that clients don’t waste time (or money) agreeing to invoice customers that are not going to pay.

It is important for the Factoring Broker to understand that it is not just about “money.”

Matter of fact, only two of the “reasons” above are actually directly related to money (Cash Now and No Debt). The other two are more related to service (Flexibly and Screening).

If you are only concentrating on the “money” side of the business, then you are only focusing on half of the issue.

Sure, money is a big hot button for someone considering Factoring, but, like most things, money is not really the primary motivation – it is what the money gets you.

Can you make it easier for someone to make payroll? Can you help them take advantage of bulk discounts? Can you help them expand their business and take on bigger clients? Can you help them avoid extending terms to risky customers?

Having money may be the answer to many of those questions, but today’s Factoring broker services are about much more than just money. Service is back. Value is back. Your marketing and prospecting materials should reflect this!

By providing great value to your clients you will be building long lasting relationships that turn into repeat business and referrals.

What differentiates a factoring company from a bank?

First and foremost, since factoring is not a loan, there is no debt on your company’s balance sheet. Moreover, factoring firms have the ability to make a quick decision regarding your medical billing funding options, while banks may take weeks-even months-to approve a loan.

Furthermore, factors determine lines of credit based on the creditworthiness of your customers, while banks focus on your company’s financial history and cash flow. In other words, a funding agency looks to your company’s future while banks place emphasis on your company’s past.

How long does it take to be approved for factoring funding solutions?

In general, a funding agency will begin its due diligence process after receipt of a signed contract. This process can last anywhere between 1-5 business days, and money is moved at its conclusion. Thereafter, a company can receive funds in as little as 24 hours within verification. See our factoring process and learn our medical billing funding options can benefit your business.

What information does a business owner need to provide to a factor in order to begin the process of coming up with funding options?

Required paperwork varies among factors, however, there are a handful of documents that most all will expect. Most likely, the owner of a medical company will be asked to provide a copy of your company’s most recent accounts receivable and accounts payable aging reports, Articles of Incorporation or Organization filing, copy of owner’s driver’s license, voided copy of a check, a master customer list, a sample contract, and of course, invoices to factor.

What happens if my customers don’t pay an invoice?

This depends on whether your company entered into a non-recourse or recourse agreement with the factor. Within a non-recourse agreement, the funder assumes the credit-related loss. However, most medical billing solutions (factors) do not assume the risk of non-payment due to disputes regarding quality or timeliness of your company’s medical billing services. On the other hand, if you have a recourse agreement, your company will have to reimburse the factor for any unpaid invoices. This is usually accomplished by having the past due invoice deducted from the next advance or replacing it with another factored invoice.

Can a medical billing service qualify for funding if it’s a new business or has past credit problems (i.e. bankruptcy, IRS liens, and judgments)?

Yes. A reputable medical billing factoring company will still consider your application if you have credit problems or a recent bankruptcy because the credit decision is based primarily on the creditworthiness of your customers. However, tax problems are handled on a case-by-case basis, so be sure to let you funder know if you have any IRS issues.

Philip Cohen is the founder and president of PRN Funding, LLC, which is a focused player in the medical invoice funding marketplace. Through a process known as factoring, PRN Funding provides medical business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding (http://www.prnfunding.com) provides medical companies with flexible and immediate access to capital.

Article reprinted with permission by PRN Funding, LLC.

Comparing Factoring Companies

1. Application Fee

Some companies charge a “fee” to see if they will work with you. Although we are on the fence on this one, you shouldn’t have to pay more than $100-$150. Avoid companies charging big fees to “evaluate” what you have.

2. Due Diligence Fee

Basically the same fee as #1, but just by another name in our opinion. That doesn’t mean you pay for both. One flat fee (or no fee) is ok. Any reputable company is in it to do business with you over the long haul, not make money on upfront fees.

3. Minimum Number of Invoices

Factoring companies might require a minimum number of invoices to be factored – some will even require ALL your invoices be factored. We believe you should have the flexibility to pick and choose when you need to factor. Try to find a company that does not have a minimum.

4. Reserve Amount

All factors are going to have a reserve amount. They fund a certain amount upfront (say 80%) and the difference (20%) is the reseve. A reserve is typically 20-30% of the invoice amount, depending on the transaction. Anything greater and you may want to shop around. While you get a portion of the reserve back, you don’t want too much tied up on the back end.

5. Renewal Fee

This is a junk fee that some factoring agents charge annually. Either they want your business or they don’t. If they have this, make them waive it.

6. Invoice Copy Fee

Some funding companies will try and charge you to copy your own invoice. Really? Skip this funder altogether – it is a good indication there are a lot more hidden fees.

7. Long-Term Contract

Factoring companies would love to have you sign you to a long-term contract. Although it would not be fair for them to get you going and then have you jump ship right away, it is cost of doing business. If you are going for a contract, don’t go for anything longer than 6-12 months.

8. Help Screening New Accounts

Before taking on a new account, some factors will help you screen their credit worthiness. This can be a big plus and you should look for this when choosing factoring programs.

9. Discount Fee

Of course you want a low factoring or discount fee!  Just be sure to consider the overall picture and realize some factoring companies will advertise low factoring fees to lure in business only to hit you with some of these hidden fees or contract clauses before funding.

Although there are many things to consider when choosing a Factor, the above items should get you on the right track.

It is also helpful to make sure you are dealing with a professional funding company or factoring broker. Check out our updated Directory of Factoring Companies and Services Providers for more details.

Cash flow especially becomes a problem in industries where it’s typical for completed work to go unpaid for 30, 60, or even 90 days after issuing the invoice. Thus, when growing companies start experiencing growth pains, they first try to apply for small business loans.

However, conventional borrowing increases business expenses and normally requires additional collateral. Some companies, especially smaller ones, are turned down by banks because of loan underwriting criteria. Some companies will also explore the option of equity financing, but this form of funding is generally harder to find than debt financing. And once found, it takes longer to arrange.

The Accounts Receivable Factoring Solution…

Accounts receivable factoring, on the other hand, is a viable funding option for companies experiencing cash flow challenges. In a nutshell, factoring is the process of converting the accounts receivable of a business into cash by selling outstanding invoices to a ‘factor’ for a discount.

With factoring, instead of depending on the applicant’s financial statements, the factoring company focuses on the strength of the client’s accounts receivable. In other words, because factoring companies are paid by the applicant’s customers (account debtors), factors are most concerned with the creditworthiness of the applicant’s customers. If the applicant’s company has a product or service that it provides to a creditworthy customer, then the business is a good candidate for invoice factoring.

It’s important to note that invoice funding does not create debt or require additional collateral. It is very simple to use. What could take weeks or months to be approved for funding from a more traditional lender, takes 3-5 business days in the world of factoring. Cash advances from 80% of the invoiced amount, depending on the customers and the business volume, can normally be obtained in 24 hours or less on an ongoing basis. In addition, funding occurs as long as a business has outstanding invoices and needs more cash, and as long as the business is selling to credit-worthy account debtors.

Maintaining a healthy cash flow via accounts receivable factoring provides a growing business with the working capital it needs to pay salaries, reduce debt, improve vendor relations and focus on critical success factors-operations, sales and growth.

PRN Funding, LLC, is an extraordinarily focused niche player in the accounts receivable factoring marketplace. Through a process known as factoring, PRN Funding provides business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding provides healthcare companies with flexible and immediate access to capital. We give you the freedom to factor what you want, when you want, whom you want, for as long as you want. Prior to founding PRN Funding, Mr. Cohen was an executive officer of The MRC Group, a national provider of Medical Transcription Services. Contact Philip Cohen at toll-free 866.776.5407 or visit http://www.prnfunding.com online.

Article reprinted with permission by PRN Funding, LLC.

Are we getting too impersonal when it comes to making offers or negotiation?

Despite the technological advances over the years the rules of negotiation have not changed. They have a set of “best practices” that the conveniences of technology can derail.

So, can you negotiate Factoring deals online?

To answer, let’s look at three basic negotiation techniques (that apply to factoring and business in general):

1. It must be personal.

Well, despite your ongoing political debates with friends and the numerous jokes being passed around by co-workers, email is anything but personal. Here’s a hint, when the proposal is being sent to BullDOG345@wherever.com, you are already losing the deal.

2. It must allow for interaction.

Don’t mistake emails going back and forth as meaningful interaction. Although the English language is powerful in the hands of a gifted writer, all bets are off when it comes to sending emails back and forth. There is no room for error when it comes to interpretation. Sarcasm, humor, and a host of other real-life emotions not only get lost, they get abused.

3. Sharing becomes easy.

This one is relatively new, but if you are up against someone else, expect your offer to be immediately forwarded to several of your competitors. I am going to guess you didn’t want them in on your best offer letter if you could help it. It also gives the competition to “one-up” your deal out of context. That is not to suggest that you don’t put an offer in writing but a potential client is far less apt to fax on your offer versus just hit “forward” on the email.

Email is a great “foot in the door” vehicle – at most. People want to do business with people, not computers. I receive numerous business proposals on an almost daily basis. Although I like them from a screening process, I would never continue ongoing communication from someone online. Sometimes you just need to get on the phone or meet face to face.

Modern technology can help us cut numerous corners, but the subtlety and importance of the negotiation process is just not one of them.

So, what do you think?  Should a factoring broker or factoring company use email to make and negotiate offers?  Tell us what you think in the comments below!

1. Sales must be final.

The only way a company can factor an invoice is if the sale is final: the company provided a service (i.e. a medical staffing agency sent temporary nurses to work in ABC hospital) or a good (i.e. a medical supply company sold latex gloves to a doctor’s office), and the customer unequivocally accepted it.

2. Goods or services must be invoiced after they are received.

Some companies bill their customers before providing goods or services. This type of relationship is unacceptable in an accounts receivable factoring transaction.

3. There can’t be any set-offs or charge-backs.

Some company/customer relationships allow for set-offs, in which invoice deductions are made based on the receipt of goods and/or services over the amount due on the invoice. Similar to set-offs, charge-backs give a customer the right to deduct payment if goods are incorrect, faulty or damaged. Both of these practices affect the final invoice amount. While set-offs and charge-backs are common in many industries, they cannot exist when a factoring company is involved because factoring firms purchase the invoice in full.

4. Liens and lawsuits against a company complicate a factoring transaction.

Liens and lawsuits affect a company’s welfare. In some cases, it’s possible for an accounts receivable factoring firm to work with a lien-holder to resolve difficulty. Lawsuits, on the other hand, could raise a number of issues, and need to be addressed on an individual basis.

5. Prospective factoring clients need to be approved during a due diligence process.

Most accounts receivable factoring companies will conduct a thorough review before a factoring relationship can be established with a medical staffing agency, medical transcription service or a medical coding company. While an accounts receivable factor’s decision relates to the creditworthiness of a company’s customers, it’s important for accounts receivable factoring firms to understand and evaluate its client’s history, operations and prospects. Full disclosure and open dialogue are the most efficient and effective means to a positive accounts receivable factoring relationship. Click here to see a step-by-step factoring diagram.

About the Author: Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the healthcare staffing invoice financing market place. Through a process known as factoring, PRN Funding provides business owners with the financial resources needed to grow and effectively compete in the industry. With no minimums or fixed terms, PRN Funding provides medical staffing agencies with flexible and immediate access to capital. We give you the freedom to factor what you want, when you want, whom you want, for as long as you want. Prior to founding PRN Funding, Mr. Cohen was an executive officer of The MRC Group, a national provider of Medical Transcription Services. Contact Philip Cohen at toll-free 866.776.5407 or via email at: pcohen@prnfunding.com Please visit PRN Funding, LLC on the web at http://www.prnfunding.com/

Article Source: Ezine Articles Five Potential Barriers to a Successful Accounts Receivable Factoring Transaction

Of course the greatest area of concern is usually the factoring fees leading many to wonder,

“How much will it cost to use invoice factoring services?”

Here are some factoring examples that address the cost of factoring…

Factoring Example I

• Invoice Amount: 10,000
• Cost to Factor (Fee): 2% or $200
• Net to seller (after reserve and invoice is paid): $9,800

Factoring Example II

• Invoice Amount: 10,000
• Cost to Factor (Fee): 5% or $500
• Net to seller (after reserve and invoice is paid): $9,500

While the cost varies by factoring companies, most businesses will look at the fees as the expense of doing business in exchange for immediate access to funds. Some businesses choose to factor all invoices while others take advantage of factoring services on an as needed basis.

So how do companies with low profit margins offset the fees? They take advantage of the ability to pay for their goods or services at a discount.

Consider the same invoice in the first example where a $10,000 invoice was factored at a cost of 2% or $200. With the cash advance the business decides to pay bills taking advantage of prompt payment discounts:

• Goods or Services: $5,000
• Take advantage of a “2% 10, Net 30”* = Save $100
• Total Paid for Goods or Services: $4,900
• Overall Realized Cost of Factoring: $100 or 1%

*Oftentimes invoices will allow for a slight deduction if paid in full within 10 days. If you don’t see this on the bill, try asking for it!

Invoice factoring is not only about receiving an advance on your invoice, it is also the ability to pay your bills promptly and receive a discount.

Just like the name implies, the client is not financially obligated to the factoring company in the event an approved and funded invoice is not paid. There is no recourse for unpaid receivables against the client.

The factoring company will generally check credit on account debtors and handle the collection and bookkeeping functions.

This does not remove the client from all possibilities of needing to repay the invoice. The client is still responsible for resolving any disputes regarding the product or service itself.

For example: If the client delivers widgets and, at a later date after the invoice has been factored, those widgets are found faulty, the client is still responsible to make good on the invoice.

Although non-recourse may be the most popular and attractive method of factoring, factoring companies are going to look closely at the paying customer or debtor. Factors underwrite the creditworthiness of the client’s customers more than the client themselves.

Since the weight of the evaluation falls on the payer of the invoice, non-recourse can be particularly attractive to newer companies with little or no significant credit track record.