Factoring for doctors & dentists: Financial stability for your practice

In view of the bureaucratic complexity in the healthcare sector, many dentists and doctors welcome factoring - it's a simple way to solve billing issues. Find out what advantages your medical practice can gain from assigning invoices and what you should definitely look out for in factoring providers.

28.5.2024
Finance
5
min reading time
Autor:
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The most important answers about factoring at a glance:

What is factoring in the medical practice?

Arztpraxen können ihre Abrechnungen entweder selbst verwalten oder sie an einen Factoring-Dienst auslagern. Hier erfolgt eine Übergabe der Rechnungsforderungen an einen externen Anbieter.

What are the advantages of factoring?

Factoring bietet Ärzten wesentliche Vorteile wie sofortige Liquidität, unabhängig davon, ob Patienten bereits gezahlt haben, was besonders für neue und etablierte Praxen nützlich ist und die Kreditwürdigkeit verbessern kann. Es garantiert Planungssicherheit, da das Ausfallrisiko auf den Dienstleister übergeht, und spart Zeit bei der Verwaltung säumiger Zahlungen.

What aspects do I need to consider with factoring providers?

Wählen Sie für optimale Ergebnisse einen Factoring-Anbieter mit guten Konditionen, der auf den medizinischen Sektor spezialisiert ist und individuell zugeschnittene Angebote bereitstellt.

What is factoring in the medical practice?

Basically, there are two ways to organize billing in your medical practice: in-house by the practice staff or outsourced to a factoring provider. In the case of outsourcing, the receivables are transferred to the service provider - an assignment of invoices takes place. This service is called factoring. The term "factoring" is an Anglicism that goes back to the Latin "factura" for "invoice". The invoicing service provider or financier is also referred to as a "factor" or invoicer.

What is real and fake factoring?

Genuine factoring is the standard form of factoring. Here you sell your receivables to the invoicing party. In this case, the service provider also assumes the default risk for the receivables. If a patient does not pay, this becomes the billing service provider's problem. In legal terms, the billing service provider is the new creditor of the receivables.

Non-genuine factoring , on the other hand, is more of a financing solution. In this case, the outstanding receivables are regarded as collateral in order to obtain a loan from the factor. The default risk and debtor management remain with your practice.

How does factoring work in a medical practice?

The financier takes over accounts receivable management and handles the collection of receivables. This means that your patients receive their invoices directly from the biller and transfer the amount to their account. The patient signs a document at your practice to forward their billing information to the billing service provider.

Nevertheless, it often leads to confusion when patients receive invoices from unknown companies. However, a full-service provider such as Nelly, which is known to patients from the very first contact with your practice thanks to digital patient registration, is a clever way of avoiding this problem.

What are the advantages of factoring for my medical practice?

Factoring offers doctors a number of attractive advantages. We have summarized the most important ones:

  • Liquidity: You receive your fee even if the patient has not yet paid. This means you are always liquid. This is particularly interesting when setting up a new medical practice, but also for established practices. In addition, factoring can improve your balance sheet ratios and thus increase your creditworthiness.
  • Planning security: The default risk with genuine factoring lies with the invoicing party - this is another key advantage of factoring for security-oriented doctors. You can plan better with your funds and save time and nerves with defaulting patients.  
  • Digitalization: Advanced service providers such as Nelly now even offer digital factoring. After a single wet signature by the patient in your practice, all payments can be made digitally. By saving on printing and postage costs, Nelly can offer good conditions as invoices no longer have to be sent by post.
  • Relief for your practice team: the billing service provider takes over accounts receivable accounting and dunning if required. You benefit from professional receivables management and a noticeable reduction in the workload of your medical assistants, who gain more time for their actual tasks.
  • Payment convenience for your patients: Factoring can also increase payment convenience for your patients. It all depends on the provider you choose. Installment payments, for example, are an option offered by some factoring service providers such as Nelly. What's more, with an all-round solution like Nelly, your patients can simply pay by smartphone.

Factoring bietet Ärzten eine Reihe attraktiver Vorteile.

Factoring for dentists

Factoring is particularly widespread in dental practices and private practices. On the one hand, this is due to the high material costs that have to be financed - such as laboratory costs or costs for prostheses. On the other hand, the risk of default is higher if the costs of treatment have to be borne privately, as is the case with services subject to co-payment.

What are the costs of factoring for my medical practice?

A turnover-based factoring fee is charged for each factoring transaction. This is usually between 1.5% and 3% and quickly pays for itself in view of the reduction in personnel costs and efficiency gains. The amount of the respective fees varies from provider to provider and can, for example, depend on an agreed minimum order volume. Additional fees may also be charged for optional additional services:

  • Processing fee: The processing fees may include the collection and processing of receivables as well as the monitoring of incoming payments and, if necessary, the sending of reminders.
  • Credit check: A credit check protects you and the factor against payment defaults, but can sometimes involve additional costs.

Digital factoring providers such as Nelly can guarantee relatively low fees, as letter and postage costs are saved. These are passed on directly to the customer. There is also no minimum fee, as there are no costs for sending letters that would have to be covered.

Sample calculation

The invoice amount is €820.00. The factor initiates an immediate payout and retains an amount of € 20.00 to cover the factoring fee and interest incurred:

  • ‍Invoice amount: €820.00
  • Immediate payout: 800.00€
  • Commission (1.5% on 800€): 12,00€
  • Interest (4% p.a. on €800.00 for 30 days): 2,67€
  • Remaining payout: €5.33

What aspects do I need to look out for in factoring providers for doctors?

There are many different factoring providers with a wide range of conditions on the market. It is best to choose a service provider that specializes in doctors and healthcare professionals and can offer you a tailor-made package. check the availability of a user-friendly online platform or software solution that enables your patients to process payments easily and thus minimizes the risk of non-payment.

Nelly as a digital specialist in factoring

As the first digital factoring provider on the DACH market, Nelly is also attractive for practices that were previously not eligible for traditional factoring. There is no minimum turnover or minimum amount that practices have to write off, as invoices are sent completely digitally after a single wet signature.

Dental practices in particular benefit from Nelly's factoring offer. The advantages of invoicing with Nelly are as follows:

  • Integration into your practice management system: Nelly can be easily integrated into all PVS and transfers incoming and outgoing bookings via an interface.
  • Automated credit check: Nelly can automatically retrieve the patient's credit rating and transfer it to the patient file in your PVS.
  • Digital invoice management: Patients decide for themselves whether they receive their invoice by text message or email and can pay their invoices directly on their smartphone in the patient portal if they wish - as convenient as online shopping.
  • Genuine and non-genuine factoring: Nelly enables factoring both with and without payment default protection.
  • Fee-free installment payments: If required, you can grant your patients interest-free and fee-free installment payments of up to 36 months.
  • Reimbursement service: Nelly handles communication with the patient or insurance company in the event of objections and reimbursements.
Als erster digitaler Factoring Anbieter auf dem DACH-Markt ist Nelly auch für Praxen attraktiv, die bislang für das klassische Factoring nicht in Frage gekommen sind. Es gibt keinen Mindestumsatz oder Mindestbetrag, den Praxen ausbuchen müssen, da der Rechnungsversand nach einmaliger Nass-Unterschrift komplett digital erfolgt.

The check out with Nelly enables practices:

  • 90% reduction in time spent on private billing, dunning, accounting and administrative tasks
  • 50% faster incoming payments
  • 20% less transaction costs
  • 25% fewer patient inquiries in the practice
  • 5% more realized treatments

Nelly also offers many other functions that make everyday life easier for you and your practice team - such as completely digital document management or digital anamnesis via QR code.

Conclusion: Factoring saves doctors costs and practice staff nerves

Factoring allows doctors and medical assistants to focus on their core competencies and patient care by handling financial matters more efficiently. In particular, outsourcing receivables management can save your practice team considerable time. No longer having to chase after patients who are in arrears also promotes trust and the relationship between practice and patient. This contributes to increased satisfaction and an overall more pleasant working atmosphere in your practice.

Interested in digital factoring with Nelly? We will be happy to advise you on your individual case.

Contact Nelly now!

The personal designations used in this article always refer equally to all persons. For the sake of better readability, we have refrained from using double or opposite names.

What is factoring in the medical practice?

Basically, there are two ways to organize billing in your medical practice: in-house by the practice staff or outsourced to a factoring provider. In the case of outsourcing, the receivables are transferred to the service provider - an assignment of invoices takes place. This service is called factoring. The term "factoring" is an Anglicism that goes back to the Latin "factura" for "invoice". The invoicing service provider or financier is also referred to as a "factor" or invoicer.

What is real and fake factoring?

Genuine factoring is the standard form of factoring. Here you sell your receivables to the invoicing party. In this case, the service provider also assumes the default risk for the receivables. If a patient does not pay, this becomes the billing service provider's problem. In legal terms, the billing service provider is the new creditor of the receivables.

Non-genuine factoring , on the other hand, is more of a financing solution. In this case, the outstanding receivables are regarded as collateral in order to obtain a loan from the factor. The default risk and debtor management remain with your practice.

How does factoring work in a medical practice?

The financier takes over accounts receivable management and handles the collection of receivables. This means that your patients receive their invoices directly from the biller and transfer the amount to their account. The patient signs a document at your practice to forward their billing information to the billing service provider.

Nevertheless, it often leads to confusion when patients receive invoices from unknown companies. However, a full-service provider such as Nelly, which is known to patients from the very first contact with your practice thanks to digital patient registration, is a clever way of avoiding this problem.

What are the advantages of factoring for my medical practice?

Factoring offers doctors a number of attractive advantages. We have summarized the most important ones:

  • Liquidity: You receive your fee even if the patient has not yet paid. This means you are always liquid. This is particularly interesting when setting up a new medical practice, but also for established practices. In addition, factoring can improve your balance sheet ratios and thus increase your creditworthiness.
  • Planning security: The default risk with genuine factoring lies with the invoicing party - this is another key advantage of factoring for security-oriented doctors. You can plan better with your funds and save time and nerves with defaulting patients.  
  • Digitalization: Advanced service providers such as Nelly now even offer digital factoring. After a single wet signature by the patient in your practice, all payments can be made digitally. By saving on printing and postage costs, Nelly can offer good conditions as invoices no longer have to be sent by post.
  • Relief for your practice team: the billing service provider takes over accounts receivable accounting and dunning if required. You benefit from professional receivables management and a noticeable reduction in the workload of your medical assistants, who gain more time for their actual tasks.
  • Payment convenience for your patients: Factoring can also increase payment convenience for your patients. It all depends on the provider you choose. Installment payments, for example, are an option offered by some factoring service providers such as Nelly. What's more, with an all-round solution like Nelly, your patients can simply pay by smartphone.

Factoring bietet Ärzten eine Reihe attraktiver Vorteile.

Factoring for dentists

Factoring is particularly widespread in dental practices and private practices. On the one hand, this is due to the high material costs that have to be financed - such as laboratory costs or costs for prostheses. On the other hand, the risk of default is higher if the costs of treatment have to be borne privately, as is the case with services subject to co-payment.

What are the costs of factoring for my medical practice?

A turnover-based factoring fee is charged for each factoring transaction. This is usually between 1.5% and 3% and quickly pays for itself in view of the reduction in personnel costs and efficiency gains. The amount of the respective fees varies from provider to provider and can, for example, depend on an agreed minimum order volume. Additional fees may also be charged for optional additional services:

  • Processing fee: The processing fees may include the collection and processing of receivables as well as the monitoring of incoming payments and, if necessary, the sending of reminders.
  • Credit check: A credit check protects you and the factor against payment defaults, but can sometimes involve additional costs.

Digital factoring providers such as Nelly can guarantee relatively low fees, as letter and postage costs are saved. These are passed on directly to the customer. There is also no minimum fee, as there are no costs for sending letters that would have to be covered.

Sample calculation

The invoice amount is €820.00. The factor initiates an immediate payout and retains an amount of € 20.00 to cover the factoring fee and interest incurred:

  • ‍Invoice amount: €820.00
  • Immediate payout: 800.00€
  • Commission (1.5% on 800€): 12,00€
  • Interest (4% p.a. on €800.00 for 30 days): 2,67€
  • Remaining payout: €5.33

What aspects do I need to look out for in factoring providers for doctors?

There are many different factoring providers with a wide range of conditions on the market. It is best to choose a service provider that specializes in doctors and healthcare professionals and can offer you a tailor-made package. check the availability of a user-friendly online platform or software solution that enables your patients to process payments easily and thus minimizes the risk of non-payment.

Nelly as a digital specialist in factoring

As the first digital factoring provider on the DACH market, Nelly is also attractive for practices that were previously not eligible for traditional factoring. There is no minimum turnover or minimum amount that practices have to write off, as invoices are sent completely digitally after a single wet signature.

Dental practices in particular benefit from Nelly's factoring offer. The advantages of invoicing with Nelly are as follows:

  • Integration into your practice management system: Nelly can be easily integrated into all PVS and transfers incoming and outgoing bookings via an interface.
  • Automated credit check: Nelly can automatically retrieve the patient's credit rating and transfer it to the patient file in your PVS.
  • Digital invoice management: Patients decide for themselves whether they receive their invoice by text message or email and can pay their invoices directly on their smartphone in the patient portal if they wish - as convenient as online shopping.
  • Genuine and non-genuine factoring: Nelly enables factoring both with and without payment default protection.
  • Fee-free installment payments: If required, you can grant your patients interest-free and fee-free installment payments of up to 36 months.
  • Reimbursement service: Nelly handles communication with the patient or insurance company in the event of objections and reimbursements.
Als erster digitaler Factoring Anbieter auf dem DACH-Markt ist Nelly auch für Praxen attraktiv, die bislang für das klassische Factoring nicht in Frage gekommen sind. Es gibt keinen Mindestumsatz oder Mindestbetrag, den Praxen ausbuchen müssen, da der Rechnungsversand nach einmaliger Nass-Unterschrift komplett digital erfolgt.

The check out with Nelly enables practices:

  • 90% reduction in time spent on private billing, dunning, accounting and administrative tasks
  • 50% faster incoming payments
  • 20% less transaction costs
  • 25% fewer patient inquiries in the practice
  • 5% more realized treatments

Nelly also offers many other functions that make everyday life easier for you and your practice team - such as completely digital document management or digital anamnesis via QR code.

Conclusion: Factoring saves doctors costs and practice staff nerves

Factoring allows doctors and medical assistants to focus on their core competencies and patient care by handling financial matters more efficiently. In particular, outsourcing receivables management can save your practice team considerable time. No longer having to chase after patients who are in arrears also promotes trust and the relationship between practice and patient. This contributes to increased satisfaction and an overall more pleasant working atmosphere in your practice.

Interested in digital factoring with Nelly? We will be happy to advise you on your individual case.

Contact Nelly now!

The personal designations used in this article always refer equally to all persons. For the sake of better readability, we have refrained from using double or opposite names.

Anett Witke

Author

Anett Witke is an SEO copywriter and content expert specializing in the areas of IT, medicine and electronics.

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