Lessons learned: Online banking
Nothing too earth shattering here; just a little observation made during my nightly bill pay exercise at home.
I use an online software to pay my bills and manage my accounts, and since I’m in the software on a regular basis, it’s pretty easy for me to pick up on the slightest of trends as they occur. One trend I’ve followed for a long time (why I’m only getting around to blogging about it now I cannot answer) is the turnaround time it takes for a vendor to debit cash from my account when I pay with a debit card.
I’m talking strong trends here.
Some companies take a notoriously long time to get to my cash. I might pay for something on a Monday, and it’s the following Monday or Tuesday before it drops from my account. Others debit the money almost immediately (too fast, if you ask me – I mean, I like to have a day breathing room at least – but hey, it’s not my money after I make the purchase).
So what’s the point? Why, on a earth are we discussing this at The Healthcare Entrepreneur? We’re discussing it because time-to-cash is an indicator of a company’s financial strength. The trends I notice are not just that some companies take longer than others to get to my cash after a purchase – it’s that there is a strong positive correlation between the financial health of the companies I buy from and the speed at which they get to my cash.
To put it plainly, the companies that get to my cash quickest after I make a debit purchase tend to be the strongest financially of the vendors I support with my pocketbook. The ones that take their sweet time – those are the ones that I’ve been reading about in the newspaper that are struggling financially – the public school system, small businesses, and…medical and dental offices.
No joke here, and not surprised at all. Even when offices of healthcare practices get paid by me (and yes, I do pay my healthcare bills), there is a delay in getting to my cash.
What’s the reason for this?
It’s simply poor understanding of the drivers of business success by healthcare practice owners. I’m not bagging on all of us – just the ones that don’t understand that it is critical to get paid as soon as humanly possible after rendering service. We already face an uphill battle in the healthcare industry with the delays associated with the third party payment system – why would we want to make it any worse by taking a few extra days to collect on a payment by check or a debit purchase?
Practice owners: Do your own research or take it from my online pocketbook – the correlation is very real between the strength of a company and how fast it is paid for its services. Put the processes in place to collect quickly and you’ll find that you strengthen the financial viability of your practice by leaps and bounds – especially in today’s economy.