In Part One of this series, I explained the importance of doing some level of due diligence before you start signing contracts and staffing nurses at a new facility. Once you feel that you have done an adequate amount of research on potential clients and you are comfortable enough with your findings to start staffing nurses, the next step is to start generating invoices.

Although there are a number of things to keep in mind when creating and delivering your invoices so that they will be paid in a timely fashion, this article will delve into three specific tasks: wording, timing, and location.

The information that you do or don't have on your invoices could be the determining factor as to how long it will take for them to be paid.  Let's start with the wording that must be on every invoice:

• Your business contact information (name, phone number, fax number and address)
• The date the invoice was issued
• The date of service
• A brief description of the services performed (i.e.: Name of the nurse who worked, how many hours he/she worked and the hourly rate)
• The name of the facility you are invoicing
• The total amount due
• The terms of the payment

Equally as important as including all of the necessary information on your invoices is displaying it in such a way that will encourage prompt payment from your customers.  For example, be sure to mark your invoices with a specific due date.  If an invoice reads "Payable upon receipt," you are leaving the door wide open for your facilities to choose when they feel like paying the invoice as no institutions of any substance actually pay any invoices "upon receipt."  Rather, send out invoices with a specific term and due date, such as "Net 15" and "Due on July 30, 2007."  Accounts payable is much more likely to pay attention to terms, and by including them, you eliminate the possibility of misunderstandings and loose interpretations of the actual due date.

There's another trick with wording to help get a speedy payment and that is to offer an incentive to pay on time.  Offer a small discount for invoices paid within 10 days of the invoice date, and print the promotion somewhere near the payment due date so that your customers won't miss out on the savings opportunity.

The next most important step in invoicing is to deliver them promptly.  Hospitals, long term care facilities, and ambulatory medical centers already have a reputation for paying slowly, so why would you want to wait any longer by not sending out invoices in a timely manner?    Furthermore, these medical facilities can't pay you if they don't know what they owe you.  Simply stated, send your clients the bill as soon as possible after your services have been rendered.  It is also a good idea to get in the habit of invoicing frequently, as in once a week.  The more often you send invoices to the AP department, the more likely your company will be added to the weekly check-run.  

One final component in the invoicing process is to make sure that the invoice is sent to the right location.  Oftentimes, the facility where you staff nurses is part of a larger healthcare system.  When this is the case, the accounts payable department could be located at the system's headquarters, which could be in a different location than the actual facility where your temporary nurses are working.  Make sure that you take the time to find out the required approval process before you even start doing business with a new facility.  In the event that AP needs to enter the invoices, it is a good idea to explore whether the original invoice can be sent to an authorizing manager while a copy of the invoice is sent to Accounts Payable to help expedite the process.  Obviously, sending the invoice to the right location, and in some cases to the right person, also plays a huge part in how long it will take to get your invoice paid.  Ask, learn and customize to get paid promptly.

The information on your invoices, the timeliness in which they are sent, and where they are sent all determine the length of time it will take to get paid.  Combine the correct invoicing process with adequate due diligence before staffing nurses, and you are well on your way to keeping your receivables from aging out too far.  The next and final lesson is reserved for the last article of the series, in which I will focus on the collection process.

Philip Cohen is the founder and president of PRN Funding, LLC, which is an extraordinarily focused niche player in the health care services funding 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 market place. 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 pcohen@prnfunding.com.  Please visit PRN Funding, LLC on the web at www.PRNFunding.com and read our blog at http://prnfunding.com/blog.asp.