How Does Healthcare Staffing Factoring Work?

There is a common misconception that staffing factoring is a complicated type of financing. In actuality, the factoring process is actually quite simple. All it takes is five easy steps…

Step One: Sell Healthcare Staffing Agency Invoices to a Factor

Technically, the first step in the healthcare staffing factoring equation happens when the agency’s customer (presumably a medical facility) has a shift open and requests the agency to fill that position. Once an agency employee works the shift, the agency is able to invoice the facility for the hours worked. At any time after the agency has invoiced the medical facility, it also has the ability to sell the invoice to a healthcare staffing factor.

The actual sale of the invoice is usually accomplished electronically, in that the agency emails or faxes a copy of the invoice along with corresponding signed timed sheets to the healthcare staffing factoring agency. The invoices and timesheets must be accompanied by an Assignment of Accounts Receivables form, which lists out all the invoices the agency wishes to sell to the factor and includes a signature from an authorized employee of the agency.

Step Two: New Debtor Credit Check

Once the healthcare staffing factoring agency receives the schedule of invoices and timesheets, an account manager reviews it for new customers. If there happens to be new customers (a.k.a. debtors), the account manager will conduct a brief credit review in order to establish a line of credit for that debtor. Typically, the credit review process can be completed within 24 hours of receipt. Once a new debtor has been approved for funding, the account manager will notify the debtor’s accounts payables department that when they receive invoices from the agency, the payment should be remitted directly to the factor.

If there are no new debtors included with the schedule, then the account manager simply moves on to step three of the healthcare staffing factoring process, which involves verifying the submitted invoices.

Step Three: Healthcare Staffing Agency Notifies and Verifies Debtors

Because a healthcare factoring firm is advancing cash based off of services that have already been rendered, it’s customary for the factor to follow-up with the debtors to be sure that they were satisfied with the staffing services, and they intend to pay the invoice.

The level of detail involved with verification varies from factor to factor. For example, some factoring firms verify every single invoice, confirming with a DON (Director of Nursing) that “Employee X” from ABC Staffing worked a 12-hour shift the prior week. Whereas, other factors might conduct “spot verifications,” in which account managers will select random invoices to verify within each schedule. Regardless of how often a factoring firm verifies invoices, it’s important for staffing factoring agencies to remember that factors will not advance money on an invoice unless they are confident that the invoice will be paid.

Step Four: Healthcare Staffing Agency Receives Cash

After the notification and verification procedures have been completed, the healthcare staffing factor is able to purchase the agency’s invoices and advance cash. In this day and age, healthcare staffing factoring firms generally send money electronically via same day wires and/or ACH (automated clearing house) transfers, which is basically an overnight funds transfer.

It’s important to keep in mind that the criteria for receiving a same day wire may differ from that of receiving an ACH. For example, some factoring firms may institute a specific funding cut-off time, requiring healthcare staffing agencies to send in their invoices and time sheets before a specific time in order to be funded the same day.

Step Five: Healthcare Staffing Factoring Firm Receives Payments and Remits the Reserve Back to the Agency

If you recall from step three, the healthcare staffing factoring firm notifies an agency’s debtors to remit payment directly to the factor the first time it purchases an invoice for that debtor. At the time a factor receives payment on an invoice, it retains its fees for advancing cash and then remits the difference back to the healthcare staffing agency. In factoring lingo, the difference that is remitted back to the agency is called the “Reserve.”

When it comes to how often a healthcare factoring firm releases reserve, there are many different positions. Some factors conduct automatic reserve releases on specific days each month, while others only release reserve upon request. Some factors require a minimum balance to remain in the reserve account at all times. Whatever the case, it’s important for healthcare staffing agencies to be aware of the factor’s reserve release procedures.

As previously stated, it’s a common misconception that healthcare staffing factoring process is a complicated. Although the exact procedures may vary from factor to factor, the basic healthcare staffing factoring model does not change.

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 te

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Becoming a Healthcare Manager

If you thought that the field of healthcare involves only direct patient care and requires extensive schooling to break into, think again! The healthcare profession depends upon the people who work behind the scenes to make sure that the business of healthcare runs efficiently. These professionals, called healthcare managers or healthcare administrators, occupy key management positions in a variety of medical facilities.

Healthcare managers perform duties ranging from budgeting and personnel management to maintaining patient records and developing organization-wide policies. These health services managers work long and hard to ensure the smooth delivery of healthcare to their patients.

Interested in becoming a healthcare manager? Read on.

Start Early

If you decide that healthcare services is your calling in life, then it can help to start preparing while you’re still in high school. Taking more intellectually rigorous courses such as science, math, English, psychology, and business will lay the educational foundation for becoming a healthcare manager.

The next step is to get a college degree, and there are a number of healthcare degree options if you want to enter the healthcare services field. You simply need to choose the academic program that meets your educational and career objectives.

While graduates can often enter the profession once they’ve completed their bachelor’s degree, and then work their way up the corporate ladder. Some entry-level positions, especially in smaller healthcare facilities, are often open to those who have an undergraduate healthcare administration degree

Since the job of a healthcare manager involves making a lot of independent and strategic decisions, the minimum required credential for a senior position is a master’s in healthcare administration or a related degree. Obviously, this degree can be acquired only after completing an undergraduate degree in a related field. Some graduate programs may also demand a year or more of work experience in clinical or administrative positions before graduation.

Get Experience

Because of increasing competition in the field, just getting a relevant college degree may not suffice when you’re hunting for a job. Hands-on industry experience while in college may give you an edge when competing for opportunities. Some academic programs may include a mandatory externship, but if the program you choose doesn’t require one, get out there and look for paid or unpaid internships at healthcare facilities near you.

Find out if your college offers cooperative education employment-such programs allow students to work in their fields of study while they pursue their degrees. Even consider volunteering at a healthcare center. Working in close proximity with doctors, nurses, and other healthcare professionals is extremely valuable not only professionally but personally, as you work your way towards entering the healthcare field.

Skill Development

Like any other manager, a health services manager is expected to demonstrate above-average communication, interpersonal, leadership, and problem-solving skills. The nature of this job also demands that healthcare administrators display an ability to work under pressure. While some skills required for becoming a healthcare manager can be acquired, others are inherent.

Do you have the personality traits necessary to succeed? Are you willing to work toward the right combination of education, experience, and skills? Then you have what it takes to become a health services manager.

Stevens-Henager College was established in 1891 and is one of the oldest colleg

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