According to the Bureau of Labor Statistics, staffing services will be one of the fastest-growing industries over the next five to 10 years. Even though nurse staffing is just a small component of the entire staffing industry, competition between vendors is fierce. Sometimes when the competition heats up, basic instincts go out the window and are replaced with poor business decisions. Business owners start focusing more on the potential to create revenue rather than actively preventing losses. This article is the first of a series that will explain how temporary nurse staffing companies can avoid cash flow problems by taking the proper steps to get paid faster for their services.
Many nurse staffing business owners say the most important way to get paid quicker is to send out the invoice quickly. It makes sense–the faster you invoice your client, the faster they will process their payments, right? Well, sometimes. Though I agree that sending out an invoice promptly is important to the whole process of ensuring timely payments, I would argue that it’s not the first step. There is something that needs to happen even before you agree to start sending RNs into ABC Hospital. In fact, some would argue that this should be done even before you sign a contract with ABC Hospital. Simply put, know your clients before you do business with them and you’ll have a much better chance of getting your invoices paid quickly.
If you own a temporary nurse staffing agency, there are a number of ways you can conduct due diligence on a potential client. The first step is to take advantage of resources that are free. You would be surprised how much information you can find out about a potential client by simply performing a web search on the company name and its principles. Depending on the size of the health care facility you’re searching, you might find press releases, news articles, or even court records related to the organization and its employees. For example, five minutes of some virtually effortless detective work could easily prevent you from staffing nurses in a facility that is on the verge of filing for bankruptcy protection.
In this day and age, most every business has a web site. So another quick way to check up on a medical institution is to go to its web site. Try to get a feel for how big the organization is and how professionally they present themselves. Then the next step is to confirm that the health care facility is in good standing with the Secretary of State in which it is doing business. Access to such corporate records is usually free of charge and available on the web. For example, if you visit http://www.capitolservices.com/stateLinks.asp, you can easily access every state’s Secretary of State web site for searching corporate records. Checking with the Better Business Bureau and speaking with other industry professionals and networking contacts is also a good way to get an elementary feel for the legitimacy and professionalism of a potential client.
As a nurse staffing business owner, you can also watch the nightly news and/or check the local newspaper to find information on health care institutions where you are thinking of staffing. Naturally, when a hospital or nursing home is about to close its doors, it’s a big deal, and the press will be on site to tell the audience about the latest developments.
Another quick and virtually painless way to help get invoices paid faster is to make a quick call to the facility’s Accounts Payable (AP) department. Don’t be afraid to ask an AP clerk how long it currently takes to pay vendors; this is obviously very valuable information to a temporary nurse staffing agency.
At the very least, I would highly recommend doing the things listed above before committing to any kind of contract with a facility. However, if you’re not satisfied with your findings, there is a next step, which will require expense as well as spending some concrete time learning about the available resources and how to do it yourself. Subscribing to services like http://www.knowx.com and/or http://www.credit.net for a minimal fee can help you search corporate information in more detail, allowing you to view pertinent documents and credit ratings. If you’re willing to spend a little more, a more detailed way of finding out how a medical facility pays is to run a business credit report in one of the top credit bureaus: Dun & Bradstreet, Experian or Equifax.
The level of detail of investigating before doing business with a new facility is entirely up to you, but it’s an important step that can prevent financial difficulties before they even have a chance to flare up.
Please stay tuned for the next important step in how to get invoices paid quicker. In part two of this series, I will discuss how invoicing accurately and quickly can also help keep those receivables in check.