Margins Squeezed? Here's Where to Find Operational Efficiencies

The current economic downturn has caught many businesses in an unanticipated margin squeeze. Healthcare organizations are no exception, with the impact being felt from the declining value of investment portfolios, reduced access to capital, increasing supply costs, and a rising proportion of uninsured patients.

Per an article in HealthLeaders Media, there is something organizations can do to ensure they are generating the margin necessary to fund future operations and investments. A margin improvement audit.

When determining a margin requirement, your target margin should be an operating margin that is sufficient to meet your board's financial performance expectations and fund future capital requirements.

In addition to operating margin, operating cash flow and existing debt service along with other sources and uses of cash should be considered. Medical Accounts Receivable (MAR) Funding is a financing tool that can generate opportunities to reduce operating expenses, increase cash flow, and boost revenue.

With MAR Funding, cash flow can be accelerated by turning receivables into working capital. Operational improvements can be attained by realizing cost savings from vendor discounts with the immediate cash generated through MAR Funding. Also, new revenue streams can be created by having the up-front debt-free cash needed to quickly respond to market opportunities as they arise.

Medical Accounts Receivable (MAR) Funding As a Working Line Of Credit

MAR Funding can be used as a "reserve working capital line," for medical providers. The flexibility inherent in this kind of finance allows providers to use their third party insurance claims (already billed and awaiting payment) to fund daily needs as they occur. Funds for such use can literally be placed in the provider's account and can be available for use within 48 hours of such deposits.

Many medical providers experience "highs" and "lows" in cash flow as a result of insurance and governmental payors protracting payments for a litany of reasons. Paying for supplies, payroll and other daily operational expenses found in medical practices can be easily accomplished by opening an account with a MAR Funding company, specifically Sun Capital HealthCare, Inc. Not all financial institutions offer the ability to use their MAR Funding as a working line of credit. Providers must consider the flexibility offered by the funding source chosen. The ability to pick and choose when and what to finance can reduce costs of funding and allows the provider to "customize" their funding solutions.

Medical Accounts Receivable Funding VS. Banking

When considering the funding options available to help gain working capital, the two most reputable solutions that come to mind are medical accounts receivable funding and banks. The banks can either provide you with the money only one time, the day you receive the loan or the bank can provide you with a line of credit that you use only when you need the money but the bank is charging you for that privilege...if you need to increase your line of credit, you will need to go through the qualifying process all over again. Medical accounts receivable funding doesn't create debt, mortgages, liens or personal and corporate risks...you are actually receiving your money at a discount.

Below is a comparison chart which displays the differences between medical accounts receivable funding and banking:

Visit http://suncapitalhealth.com/benefits.asp to learn more about the benefits of medical accounts receivable funding.