How To Improve Cash Flow For Your Agency

May 4, 2021

As people always say, “Cash is the lifeline of any business.” This statement holds especially true for the companies in the home health industry because without sufficient cash flow, patient care would come to a standstill. There are many ways to improve your agency’s cash flow from creating and submitting claims as often as possible to getting a line of credit from a bank. However, I would recommend trying a few other options before resorting to going to a bank or a factoring agency for money. In this article I will explore the primary reasons for cash flow issues and how to overcome these challenges to improve cash flow.

One of the primary reasons for delayed cash flow for HHAs is that they still adhere to the ancient method of billing in arrears. Though this method allows agencies to keep a better track of their expenses and invoices, it fails to provide sufficient cash flow. In order to overcome this issue, you can bill your clients ahead of time allowing you to cover your ongoing expenses such as payroll. However, remember that you will need to adjust your billing practices to account for any additions or deletions once the job is done. After each billing cycle, check which services were performed versus what you billed and make and credits or debits accordingly.

Taking deposits is a convention followed by many people in service-based professions. In order to alleviate your cash flow, you can make it mandatory for your clients to pay a deposit before you start their services. Traditionally, the deposit would be the cost for all the services rendered during the first 1 to 2 weeks of care. The deposit will give you a cushion against the expenses that you will have to incur because you will not get reimbursed from your insurance any time soon.

Remember to always be proactive when your collecting payments from customers and insurance agencies. Setup your organization so that you can accept credit card payments or even issue warnings to customers to remind them that if they told pay their bills within two-week arrears it could cause an interruption of their service. Worse case scenario, seek professional help from home care experts who have dealt with these issues before and know how to resolve them.

Using Technology to Improve Cash Flow

While there are things you can do to improve cash flow at an accounting level, the secret to having consistently positive cash flow is to adopt the right healthcare software system. The healthcare software system you choose should ensure that you perform timely documentation and QA which moves your patients forward through your agency’s workflow so that you can stay on top of billing and achieve financial success. Furthermore, the system should stress the importance of accountability and timely completion of patient documentation.

For all that and more, KanTime Healthcare Software is the ideal solution for your agency.

Ready to see How better Happens?

Request a Demo

We Think You May Also Like

BLOG

Understanding the Impact of CHAP: The Benefits of Working With a CHAP Verified Organization

In the fast-evolving world of healthcare, the need for high-quality home care solutions is increasingly important. As a leading EMR provider for the healthcare industry, KanTime has consistently demonstrates its commitment to excellence when providing comprehensive agency management tools. KanTime recently earned the prestigious CHAP healthcare verification for its Home Health, Hospice, and Palliative Care […]

BLOG

Overcoming Common Home Health Agency Challenges with the Right Billing Software

The demand for trusted home health services is set to soar in the coming years. According to a report from Fortune Business Insights, the senior population is projected to balloon in size with baby boomers over 65 accounting for 20% of the total U.S. population by 2050. The same report claims that the U.S. home […]

BLOG

Understanding the Full Value of a Hospice EMR Software Solution

We’re on the verge of a hospice software revolution where reliable hospice EMR solutions are about to take the industry by storm. The catalyst for this shift in demand is the ‘silver tsunami’ of baby boomers about to enter the senior population, whose average ages are all expected to exceed 65 by 2030. This ‘gray […]