||>>> Managing Accounts
RECOMMENDED PROCEDURES FOR MANAGING YOUR
CSRS recommends the following billing
- Obtain detailed demographic and credit
information from your customer/client/patient when establishing a credit
account (most valuable is a social security number)
- Obtain a signed agreement with your
customer/client/patient detailing your payment terms and conditions including
collection cost reimbursement on past due accounts
- Send prompt and accurate periodic
- Review your accounts receivable aging
schedule at least monthly
- Contact your patient/client/customer -
maintain an open dialog with the debtor to ascertain when payment will be
remitted or the reason for any delay. Communication is key.
- Send outstanding balances to a third
party collection agency after 90 to 120 days from the date of sale or service
if no reasonable contact has been made by the debtor regarding payment of the
debt. According to industry surveys, the likelihood of collecting on accounts
decreases dramatically with the length of the delinquency. Beyond 120 days you
are facing the law of diminishing returns. As the provider you will expend
considerable time, effort and money to collect comparatively few dollars. On an
account that is 90 days past due, the probability is that you will only collect
$.70 of every dollar, after 180 days $.50, and after one year $.23. The sooner
you get a third party involved to collect, the greater your chances of
- Invoice your patient/client/customer at
the time of sale or service. The invoice should contain payment terms including
penalties and charges for non-payment;
- Send a second invoice to the debtor
within 30 days, asking for "Immediate Payment";
- Send a third invoice within 60 days,
noting the balance is "Past Due" and "Immediate Payment is Required".
- The fourth invoice should note the
account is "Seriously Past Due" and "Demand Full Payment within 15 Days".
Notify the client that "if the account is not paid within 15 days, it will be
referred to our collection agency".
- Within 120 days from the date of
service, send the outstanding balance to third party agency for immediate
Devise in-house billing
procedures that you are comfortable with, follow them, and then remit to a 3rd
party for collections if debtors do not respond to your efforts.