According to research by Kaulkin Media, if you are in the healthcare industry 7% of your sales should be set aside for bad debt. That is a staggering number. To help companies in the industry control bad debt losses, it prepared a white paper listing 11 tips for a “healthy” collection program.

1. “Acknowledge the impact of self-pay patients “

this really isn’t so much a tip on collection as it is a reminder to keep in mind that 16% of the US population is uninsured and can account for a significant portion of the problem debt. (more…)

It’s hard to believe but, yes, an IRS regulation can be your new best friend… when it comes to collections. It is a last ditch method, but a very powerful method that can resurrect an account that you thought had become hopeless.

If you write off a debt or receivable as a complete loss, IRS Reg. S1.61-12 requires that the debtor report the charged off debt as income on their tax return. This transformation of a debt into income, on which taxes have to be paid, turns out to be a very effective method of getting a debtor’s attention. (more…)

PC Mag has compiled a list of five tips that help convince a customer they need to pay your bill and pay it now. The magazine’s suggestions can be summed up as:

(1) Have a Written Credit Policy.

A written policy educates the customer as to what you expect from them. It Lays out the ground rules for paying on credit and shapes their expectations. Without a written policy there can be a substantial amount of arguing back and forth about when something is supposed to be paid, how much time between the invoice and payment is reasonable, etc. think of a credit policy as a contract (which, actually, it is) between you and the customer laying out each obligation than they have and each responsibility you have. (more…)