10 tips to maximize cash flow for your medical billing business

Cash flow management can be tricky for any business, and medical billing companies are no exception. Yet knowing how to maximize cash flow is one of the most critical elements of a successful business. 

Following are 10 tips on how to maintain cash flow so you can continue to deliver high-value services to clients. These tips can help you identify solutions to cash flow problems with ease.

Sometimes, cash flow problems occur because medical billing company owners haven’t fully thought through the process of how they’ll charge for medical billing services — specifically, whether they’ll charge a percentage of collections, per claim, or hourly. Each option comes with its own unique challenges in terms of how to maintain cash flow. 

When thinking about how to maximize cash flow, it’s important to understand that you can always switch pricing models if one isn’t working for you. However, you’ll need a clear strategy for how to do it without losing clients. 

With that said, you shouldn’t change your pricing model frequently, because it can confuse clients and erode trust. Something else to keep in mind: If your value justifies it, you may want to consider a small price bump to improve margins.

Negotiating shorter terms can be one of many successful solutions to cash flow problems. This prevents payment delays and ensures you have access to cash when you need it.

Prioritizing high-volume providers who also value quality clinical documentation and regulatory compliance means there are ample opportunities for you to get paid efficiently and maintain cash flow.

Sometimes, even despite your best efforts, solutions to cash flow problems may not work. This is when a business line of credit may be necessary to keep the business afloat. 

A business line of credit is a form of revolving credit on which you can draw up to a pre-determined limit. You only pay interest on the cash you draw from the credit line. However, remember that a line of credit is an emergency tool — not something you should rely on frequently.

One of the most effective solutions to cash flow problems is to cut or reduce expenses, when possible. One of the biggest ones to target? Turnover-related expenses. 

Focusing on employee retention is paramount. However, there are plenty of other medical billing company expenses to consider, such as office space and utility costs, equipment maintenance and upgrading, and more. 

When thinking about how to maximize cash flow, there may be opportunities to renegotiate or consider a new approach in the spirit of cash flow improvements. 

Even a small buffer fund can reduce stress during slower periods. Setting money aside on a weekly or monthly basis to maintain cash flow can help. 

You can put the money into a variety of account types, including: 

Sometimes, cash flow problems occur when medical billing companies don’t have a solid process in place to collect requisite and essential practice information from new clients. This can cause a cascading effect of payment delays and other avoidable problems. 

Regularly assessing your onboarding process is a simple way to improve the cash flow of your business. You may even want to consider a one-time setup fee to help offset new patient onboarding and customization costs. 

Being able to project revenue 3 to 6 months in advance can help you spot and address potential cash flow problems early. Here are some free tools that can help.

Increasing revenue doesn’t automatically improve cash flow, but it does help. Beneficial strategies include: 

RPA can help you scale revenue and maintain cash flow without increasing workload. RPA reduces manual tasks such as data entry and invoicing using intelligent, rules-based automation to streamline workflow. 

As medical billing company owners learning more about how to maximize cash flow, there are many options to consider. Ideally, you would leverage all of them; however, even one small change can have a significant impact. 

Learn more: Discover the top 10 revenue-boosting strategies for your billing company.