Starting Your Own Factoring Business? It’s Your Call
July 11, 2011 by Don DAmbrosio · 3 Comments
At some point in our working lives many of us think about starting a business and being our own boss. The thought of Read more
Using a Factoring Company
March 17, 2010 by Marco Terry · Leave a Comment
One of the side effects of the economic crisis is that more companies need business financing while less institutions were willing to provide it. Because of this, companies started looking for other options to business loans. One of the options Read more
Medical Coding Factoring Terms
March 1, 2010 by Philip Cohen · 1 Comment
When a medical coding service is considering selling their receivables to a factoring firm, it’s important to familiarize themselves with some common factoring terminology. This is a quick reference guide outlining some of the more commonly-used factoring terms to help medical coding business owners navigate seamlessly throughout the entire factoring process.
ACH (Automatic Clearing House) – One method factoring companies use to electronically transfer funds into an Account Creditor’s account. When an ACH is initiated, the funds are made available electronically in the Account Creditor’s account on the next business day.
Account Creditor – You, the client and provider of medical coding services.
Accounts Receivable – The money that is owed to an Account Creditor for the services it has provided to customers on credit. The amount indicated on an issued invoice.
Advance Rate – Money provided immediately to the Account Creditor-expressed as a percentage of the total invoice amount. Frequently, factoring firms advance between 70-90% of the invoices it buys.
Account Debtor – The purchaser of medical coding services who is responsible for paying the invoice, (a.k.a. your customer.)
Cash Flow – The measurement of cash coming into a company via accounts receivables and cash going out of a company via accounts payable and payroll.
Collateral – An asset that is promised or given to a funder to guarantee the discharge of an obligation by the Account Debtor.
Discount Fee – A fee assessed by a factor that purchases accounts receivable. Traditionally, the discount fee is determined by the size of the invoice, the length of time it takes to collect the funds and the creditworthiness of the customer.
Face Amount or Face Value – The total amount of an invoice.
Medical Coding Factor – A company that provides operating capital to businesses through the purchase of their invoices.
Medical Coding Factoring – An alternative financing arrangement, in which a factor purchases the accounts receivables of a company, advances a specific percentage of the invoice immediately and then collects on those invoices.
Medical Coding Invoice – A legal debt instrument which indicates the amount due from a customer to pay for delivered medical coding services.
Non-Recourse - The period of time in which the accounts purchased by the factor remain the factor’s accounts and do not revert to the Account Creditor if unpaid due to an insolvency event. The factor accepts full credit risk for any and all accounts that it purchases during this period.
Notification – The process whereby the factoring company communicates to an Account Debtor that an invoice has been purchased from the Account Creditor and that the Account Debtor is to pay the factoring company directly.
Recourse – The period of time in which accounts purchased by the factor are able to revert to the account creditor if unpaid due to an insolvency event. The client accepts full credit risk for any and all accounts that it sells to the factor during this period.
Reserve – Amount of money that is not immediately provided to the company factoring its accounts receivable when the account is purchased by the factor, expressed as a percentage of the total invoice amount. (Advance Rate + Reserve = 100% of Total Invoice)
Reserve Release – The Reserve, minus the discount fee, is transferred by the factor to the client after payment is received.
UCC (Universal Commercial Code) – The laws dealing with commercial business.
UCC-1 – The financing statement (Form UCC1) filed to perfect a security interest in named collateral.
Keeping this medical coding factoring terminology guide close by during conversations with factoring firms will help medical coding business owners better be able to speak and understand the “factoring language.” Using this article as a reference also allows medical coding business owners to save time by focusing on asking the right kinds of questions to locate the best medical coding factoring firm for their company.
Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the medical coding invoice funding 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 coding 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 – Medical Coding Factoring Terminology
Learn Factoring – The Alternative Finance Industry Exposed!
February 22, 2010 by M.Ponomarew · 1 Comment
Last year small business lending was slashed by over $13 billion dollars and this trend is poised to continue.
Join us Tuesday, March 23rd at 2 pm or 9pm EST to discover how to profit with alternative financing. Read more
Factoring Conference and Workshop Schedule
January 9, 2010 by Factoring Investor · 1 Comment
Searching for training and networking in the accounts receivable factoring industry? The International Factoring Association (IFA) has announced their conference and training courses for 2010.
These training courses provide factoring brokers, funders, and investors opportunities for ongoing education and networking in the world of invoice factoring. Mark your calendars for these upcoming events: Read more
Can a Company Use Accounts Receivable Funding If It Already Has a Bank Line of Credit or Tax Liens?
November 11, 2009 by Fred Rewey · 2 Comments
Many times a company thinks if they have an existing bank loan or line of credit they will not qualify to sell their receivables.
In some cases a company may still be eligible to work with a full-service factor and realize the benefits of factoring. Read more
Factoring Demand Increases as Big Business Takes Longer to Pay
November 4, 2009 by Tracy Z · Leave a Comment
Dealing with cash flow strain in a struggling economy, big business is taking longer to pay on invoices.
The average time to pay bills is up 5% to 55.8 days for companies with sales over $5 billion, as reported by the Wall Street Journal in Big Firms Are Quick to Collect, Slow to Pay. Read more
Level the Playing Field by Learning How to Use a Financial Calculator
November 4, 2009 by Fred Rewey · Leave a Comment
You may have walked out of meetings with bankers, accountants, and CPA’s thinking you were at a “financial disadvantage” as they danced their fingers across a financial calculator and reported their results.
You may have even wished you could “crunch the numbers” yourself for peace of mind or to make sure no one was taking advantage of you.
If either of those situations sounds familiar, then you need to learn how to use a financial calculator. Read more
Considering Accounts Receivable Financing? 5 Things to Know Before Applying for Factoring
Factoring provides cash to companies all across America, even when banks say no to business loans. Like all business deals, it pays to be prepared.
Save time and money by understanding these 5 areas before Read more
When Should a Business Use Factoring?
July 7, 2009 by Tracy Z · 2 Comments
Need to meet payroll? Are suppliers demanding payment? Has the bank reduced or pulled your credit line? These are just a few of the challenges facing businesses in today’s economy.
In fact over one third of banks surveyed by the Federal Reserve in April 2009 have reported a decline in credit line and credit card limits for businesses. Read more




