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Nurse Staffing Accounts Receivable Factoring Overview

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By Phil Cohen

When your healthcare staffing business bills clients, you know that medical providers (i.e. hospitals, nursing homes, medical clinics, etc.) can take months to compensate you for your staff’s time, leading to cash flow issues due to delayed payments. When you use nurse staffing accounts receivable factoring to secure funding for your company, you can:

  • Rest assured that you can pay bills and employees on time.

  • Have the confidence to make the necessary moves toward expansion.

What Is Nurse Staffing Accounts Receivable Factoring?

In nurse staffing accounts receivable factoring, a type of invoice factoring, outstanding invoices are converted into cash through a ‘factor’ for a discount. This means that instead of waiting for your clients to pay you for your staffing services, you will be able to use the money your workers have already earned right away.

Most factors offer nurse staffing non-recourse factoring: this allows a factor to be held responsible for unpaid invoices if the staffing agency goes out of business or declares bankruptcy during the time in which the owner’s invoice was factored. Non-recourse factoring does not cover:

  • Very late payments where there is no bankruptcy.

  • Disputes over invoices.

  • General collections issues.

With accounts receivable factoring, you won’t hesitate to accept large staffing requests due to lack of funding.

Who Can Use Nurse Staffing Agencies Accounts Receivable Factoring?

Even well-managed nurse staffing firms encounter cash flow issues. Selling accounts receivables for fast cash is a great option for many types of nurse staffing agencies, both large and small. Your credit rating is not a major factor in the application process.

Factoring firms that specialize in nurse staffing account receivable factoring have ample experience working with the healthcare services industry – specifically the financial challenges faced by those who place nurses in:

Nurse staffing account receivable factoring companies understand that you invest a lot of time and effort recruiting and screening the right nurses for your staffing agency. Managing your finances is an equally important part of a successful agency. A nurse staffing account receivable factoring company works hard to outline terms that work well with your company’s financial needs.

What are the Benefits of Nurse Staffing Accounts Receivable Factoring for Cash Flow?

The account managers at PRN Funding are familiar with terminology and processes specific to the nurse staffing industry, so that the process will go smoothly for you. Some additional benefits include:

  • An immediate dramatic improvement in cash flow

  • The ability to meet payroll and taxes on time

  • You can hire new nurses, expand your business, and go in the direction you choose

  • Avoid taking action based on a lack of funds

  • Funds will be transferred to you within hours of verifying your accounts receivables

  • Nurse staffing agencies have the freedom to factor accounts receivables for the time period of their choosing

  • Payroll funding facilitates immediate access to capital from receivable invoices, allowing agencies to meet their weekly payroll obligations without delays

How Does Nurse Staffing Factoring Work?

Nurse staffing factoring is a financial solution that allows medical staffing agencies to expedite cash flow by unlocking working capital. The process involves selling outstanding invoices to a factoring company, which provides immediate cash to the agency. This financial tool helps healthcare staffing agencies meet payroll, pay taxes, and cover operational expenses without waiting for client payments. Factoring is particularly popular in the healthcare industry due to its flexibility and efficiency in managing cash flow.

Qualifying for Factoring

Qualifying for factoring is a straightforward process that involves meeting certain criteria. To qualify, nurse staffing agencies must have outstanding invoices from creditworthy clients, a stable business operation, and a good reputation. The factoring company will also review the agency’s financial statements, credit history, and industry experience. Once qualified, the agency can start factoring its invoices and receiving immediate cash flow.

The Factoring Process

The factoring process typically involves the following steps:

  1. The nurse staffing agency generates an invoice for services rendered to a client.

  2. The agency submits the invoice to the factoring company for review and approval.

  3. The factoring company verifies the invoice and the client’s creditworthiness.

  4. The factoring company advances a percentage of the invoice amount to the agency, usually within 24 hours.

  5. The factoring company collects payment from the client and remits the balance to the agency, minus a factoring fee.

Choosing the Right Factoring Company for Your Nurse Staffing Agency

Choosing the right factoring company is crucial for nurse staffing agencies. When selecting a factoring company, consider the following factors:

  1. Experience: Look for a factoring company with experience in the healthcare staffing industry.

  2. Reputation: Research the company’s reputation online and ask for references.

  3. Fees: Compare factoring fees among different companies to ensure you’re getting the best rate.

  4. Customer service: Choose a company with excellent customer service and a dedicated account manager.

  5. Flexibility: Consider a company that offers flexible factoring options, such as spot factoring or contract factoring.

By considering these factors, nurse staffing agencies can choose a factoring company that meets their unique needs and provides the best possible service.

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Phil Cohen

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