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One of the most frustrating aspects of owning a medical staffing business is that healthcare providers oftentimes insist on extending payments beyond 45 days. In fact, it's not uncommon for a large medical facility to cut checks 60 days or later after services have been rendered. Naturally, a consistent history of 'staff now and get paid later' can wreak havoc for any new or growing staffing company. In effect, it causes the agency to be invoice rich and cash poor, which means that a healthcare staffing agency has a lot of outstanding receivables and little cash in the bank to show for it.

Fortunately, there is an easy way for staffing agency owners to turn their receivables into cash - medical staffing payroll factoring. It's is one of the most used and least talked about ways to finance a business. In essence, healthcare staffing payroll factoring is a financing tool that allows staffing agency owners to convert their invoices into cash immediately. Specifically, a medical staffing payroll factor purchases an agency's invoices at a discount and offers an advance payment to the agency. When the invoices come due, the staffing payroll factor collects directly from the agency's clients (account debtors), takes its fees and releases the balance back to the agency. Utilizing healthcare staffing payroll factoring can transform an invoice rich agency into a cash rich.

Still not convinced that healthcare staffing payroll factoring can help your agency? Here are some additional benefits of payroll factoring:

Factoring Improves Cash Flow

Healthcare staffing agency owners can use the immediate cash received from factoring to ensure that their daily business needs are met. This means that staffing companies can pay their suppliers on time, which helps maintain positive business relationships. Moreover, agency owners can use the funds from healthcare staffing payroll factoring to meet weekly payroll even if their clients take months to pay. Finally, medical staffing factoring gives agency owners enough upfront cash to pay quarterly payroll taxes on time, allowing them to remain in good standing with the IRS.

Factoring Helps with Collections

As stated previously, healthcare providers typically take months to pay their vendors. For this reason, many agencies appoint a separate collections team to chase down past due payments. However, when an agency owner uses a payroll factor, he/she has constant cash flow coming into the business, and it eventually reduces the time and resources allotted for debt collection. Additionally, many medical staffing payroll factoring firms offer collections assistance as part of their factoring services. Agency owners who use those collections services worry less about money coming in and more about how to make more money by growing their companies.

Factoring Secures News Clients

Having to wait to be paid puts a kink in things when an agency owner is trying to bring on new clients. Signing a big contract is difficult to do when agency owners don't have enough cash on hand to cover recruiting and hiring expenses. The end result is that the agency has to turn down new business because of insufficient funds. Payroll factoring helps agency owners avoid such problems because it provides a continuous supply of capital. Business owners can tap into that uninterrupted cash flow, and start saying 'yes' to new clients.

Factoring is the perfect financing option to help agencies overcome their cash flow problems. It gives agency owners the ability to stay ahead of their competition because it provides the instantaneous cash needed to balance daily financial obligations. Factoring frees up internal employees from wasting valuable time and money on the collections process, and it helps agency owners acquire new clients.

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 terms, PRN Funding provides medical staffing agencies with flexible and immediate access to capital. We give you the freedom to factor what you want, when you want, whom you want, for as long as you want. Prior to founding PRN Funding, Mr. Cohen was an executive officer of The MRC Group, a national provider of Medical Transcription Services. Contact Philip Cohen at toll-free 866.776.5407 or via email at [email protected]. Please visit PRN Funding, LLC on the web at http://www.prnfunding.com/

By Philip Cohen
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