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A business is defined as an entity that provides goods or services to another entity in exchange for money. While the definition is simple, there are so many different types of businesses. There are huge corporations with millions of employees and sole proprietorships that are made up of a single person. Some businesses have tons of customers located all over the world while others may have just one or two clients. There are businesses that sell easily definable products while others get paid for providing much harder to define services. No matter what type of business an organization is and what it does, the most important part of the business is getting paid for the work.

For small businesses, this is even more important. Small businesses usually operate on razor-thin margins and depend on their cash flow in order not just to grow but to survive. If your business is being hurt by past due accounts receivables, here is what you need to know.

Unpaid Bills and Small Business

Debt and unpaid bills are a major problem in America that not only affects consumers but businesses as well. About a third of all Americans have a debt that is has gone so far past due it is currently in collections. This represents over 75 million people. These unpaid bills range from as little as $25 to as much as $100,000 or more. The average amount that is delinquently past due is around $5,000.

Obviously, the amount of past-due debt varies by company and industry but overall, the average small business has over $80,000 in unpaid invoices and a whopping 81% of those are at last 30 days past due. When this happens, small business owners face several challenges. These include not being able to hire more employees, buy new equipment, or do the marketing they need to grow. In more dire circumstances it can mean not being able to buy inventory, the owner and/or the employees taking a pay cut, job cuts, and ultimately, business failure.

Avoiding Unpaid Bills 

Before it gets to a point where crucial functions, salaries, or jobs need to be cut, there are a few things that small businesses can to help avoid unpaid bills. While these methods aren’t foolproof they can help minimize your risk.

• Have a policy in writing

One problem many small businesses face in many aspects of their business is not having a defined, written policy on things. This is as true for credit and debt collection as any other function of the business. Having a written policy about how you offer credit and how your business goes about collecting past-due bills will help enormously.

• Have Tighter Credit Policies

Depending on the type of company and the industry, many businesses have no choice but to offer goods or services on credit. What you do have a choice in though is how much you offer and what kind of investigation you do into a client before offering credit. If you struggle with unpaid invoices, making it harder for everyone to receive credit from your company should help minimize past due accounts.

• Hire a Debt Collection Agency

Once an account goes 30 – 120 days past due, it may be time to hand that bill over to a professional. As good diligent as you and your company might be about trying to collect, you will never have the time, systems, or expertise that a professional debt collection agency has. They will have a much better chance of recovering what you are owed than you will.

Hiring a Small Business Debt Collection Agency 

When hiring a debt collection agency for your small business, there are a few things you want to look for. Here are the main things to consider. 

• Reviews and Reputation 

The first thing you want to find out is if the debt collection company is reputable and ethical Remember, the collection agency you use will be a reflection of your business. Using one that is overly aggressive or unprofessional will come back on your business.

• Licensing, Insurance, and Compliance

The rules and laws governing debt collection agencies can vary slightly state by state but in general, you want to make sure that the company you use has the appropriate licenses and insurance and is compliant with all local and federal debt collection practices.

• Fees

Check out exactly how the company gets paid. There are a few different ways this happens and while none is inherently better than the other, one way might make more sense for you and your business than another. The main ways these companies get paid are by flat fee, by taking a percentage of the money collected, or by buying the debt outright at a discount.

Kinum’s utility for Dentrix Dental Practice Management software allows practices to directly transfer accounts for debt collections without the need to manually re-enter accounts on Kinum’s Client Portal.

For about $15 per patient, Kinum will :

1. Send 5 collection letters to your patient (or debtor).

2. Kinum will check if the debtor has moved to a new house and send letters there.

3. If your patient has filed for bankruptcy or not.

4. Check if the patient is litigious or not, to protect your practice from costly lawsuits.

5. Update status in case there is a Mail Return.

6. Ability to forward this account for intensive collections ( Contingency based Collector calls) if the debtor still refuses to pay. 

7. Follow all debt collection laws. A HIPAA compliant collection agency. 

All this for only $15 per account. You can free up our staff time and focus on your dental practice.

Our Dentrix integration is actually a utility, which means it can extract the required past-due accounts based on your preferences and rules defined. It also checks if any payments have been posted for accounts in collections and automatically reports it to Kinum Collection Agency.

This web-based utility which can only read data and cannot alter the data within the Dentrix system by itself. So your data is completely safe.  You can decide if accounts should be transferred automatically or should you select which specific accounts should be transferred.

Additional features of Dentrix-Kinum utility ( Collections Extract Manager) include

1. Transfer accounts to any step ( 1st party demands, 3rd party demands and 3rd party Collector calls)

2. You decide what should be the minimum outstanding balance eligible for collections.

3. Only send accounts if a payment hasn’t been made in ___ number of days and have been ____ days past due.

4. If you make a payment in your Dentrix practice management software, our utility will pick that up and reflect on Kinum’s client portal.

Screenshots from the Kinum-Dentrix utility

Medical professionals and institutions may be hesitant to contact a Virginia medical debt collection agency. But considering that there are 719,000 uninsured Virginians under the age of 65, it is likely that your medical bills are piling up.

A debt collection agency’s job is to help relieve doctors of unpaid balances so that they can continue to have working capital. This helps both patients and doctors by giving them the freedom to hire more staff and invest in more medical supplies. Without the option to sell medical debt, more patients would be turned away due to insufficient supplies.

Combined with the national effort to relieve patients of medical debt, along with the Fair Debt Collection Practices Act, there are now multiple ways to handle unpaid doctor visits. Consulting a Virginia medical collection agency is typically a viable solution for struggling practitioners.

Read on to learn about the current Virginia medical debt climate to help you determine if a collection agency is the right move for you.

Virginia Debt Statistics

Virginia is one of the wealthiest states in the nation. That’s good news for doctors and hospitals because it puts the average income for residents of VA is about $60,000. That means that most residents with medical debt are in a position to afford monthly and regular payments. This can be done directly through the hospital or with the help of a Virginia medical debt collection agency.

However, this high expectation has forced many below this average threshold to turn down health insurance. According to the Virginia Health Care Foundation, “There are 428,000 uninsured Virginians ages 19 – 64 years old, with household income under 200% FPL (9%).”

This makes Virginia one of the top-rated states with the most uninsured residents. It is also difficult for Virginian patients to seek Medicaid help. In fact, Virginia is ranked last for the state’s residents to receive any form of financial medical help. This puts patients at risk because they can’t (or won’t) seek medical treatment in lieu of insurance.

Virginia Medical Debt Collection Laws

Virginia’s statute of limitations is three to six years. This is relevant to oral agreements, written contracts, open-ended accounts, and promissory notes.  According to The Balance, the exact number of years for each type of agreement is as follows:

Oral: 3 years
Written: 5 years
Promissory Notes: 6 years
Open-Ended: 3 years

According to Virginia law, creditors such as hospitals and doctors may file a lawsuit towards the debtor (i.e the patient) once the statute of limitations expires. However, with today’s Fair Debt Collection Practices Act, most practitioners do not take this route.

Virginia Medical Debt Agency Process

Because of the difficulty in obtaining financial medical help in Virginia, patients may see a doctor knowing they will never be able to pay their bills without insurance. That leaves doctors to pick up the slack by managing unpaid bills. The process is both daunting and time-consuming.

Instead of seeking legal retribution, most Virginian medical practitioners choose to sell their debt to medical debt collection agencies. Recent federal regulations (the Fair Debt Collection Practices Act) ensures that patients with outstanding balances are protected against aggressive debt collectors. Collectors are restricted to call during set hours of the day and they cannot harass, threaten, or intimidate former patients to pay their bills.

Instead, debt collectors now work alongside patients to develop a payment plan – an amicable option that may otherwise be unavailable to the patients in the state of Virginia.

Need a Medical Collection Agency in Virginia? Contact us!

References:
https://law.lis.virginia.gov/vacodepopularnames/virginia-debt-collection-act/
https://www.vhcf.org/data/
https://www.vhcf.org/data/profile-of-the-uninsured/
http://www.vdh.virginia.gov/health-equity/virginia-health-equity-report/

Kinum Inc. is located in Virginia Beach, Virginia. All our collection operations are located in USA. We are fully insured and each year we recover millions of dollars for our valuable clients. Our fixed fees collection letters are a cost-effective way to recover money from past-due accounts.

Benefits of Kinum’s Collection Letters

Kinum’s collection letters service or the CONNECT service, is recommended for accounts that are less than 120 days past due.

1. Accounts purchased from Kinum NEVER EXPIRE

Other collection agencies try to sell larger number of accounts on the pretext that you ( the creditor) will get a better/cheaper deal if more accounts are purchased, but remember, their accounts typically expire in 1-2 years.

For example, if a Dentist buys 1000 accounts but uses only 850 accounts in 2 years, then the unused 150 accounts expire. The dentist just lost money to the same collection agency which was hired to recover his money. Something does not sound right.

At Kinum, we completely understand that it is impossible to know exactly how many accounts you will need, so we do not allow your accounts to expire. You can use them after 1 year, 2 years, 3 years and beyond. Yet, we want you to take full advantage of the discounted pricing without the fear of losing them.

Five collection letters with intensifying verbiage are sent out at regular intervals for each account assigned to us.

2. We just don’t send Collection Letters, we send COLLECTION DEMANDS

We take our collection letters very seriously. We break out each charge by date. Most agencies just list a lump sum owed. A BREAKUP OF CHARGES not only clarifies the amount of debt owed but it also communicates to the debtor that they are dealing with a collection agency which has a deep understanding about the case. Debtors are more likely to pay and less likely to dispute the charges or ask for the proof of the debt owed by him.

Our demands are sent in COLORED PRINT.Many agencies send demands in black and white print. All our collection letters are diplomatically authored and attorney approved.

Our collection demands are taken a lot more seriously and yield better recovery rates.

3. SPANISH or ENGLISH Letters, we have both

Is Spanish the primary language of at least some of your debtors? At Kinum, we understand the benefit of sending Spanish letters to people who do not understand English that well. A debtor is more likely to pay if he reads the collection demands in language which he understands better. Our Spanish letters are equally effective as our English language collection letters.

4. We do an extra Scrub – LITIGIOUS debtor check

Apart from complementary “Change of Address” and “Bankruptcy” checks on every account that is assigned to Kinum, we do one very important check “LITIGIOUS debtor check”.

So lets say, a patient who owes you $200 has sued two other medical practices earlier, he has a habit of suing medical practices. Even though the medical practices generally win these frivolous legal suits, yet the cost, time and stress involved in dealing with such cases is too high.

We inform you of such debtors, close the case and return this account back to you. This step protects you and us from trying to collect money from “high risk debtors“.

5. Ease of submitting your accounts receivable to Kinum

You can transfer your past-due accounts in many ways to us:

1. Enter an account one-by-one through our online client portal.
2. Alternatively. you can send us accounts in batch, for example send multiple accounts in an Excel file and we will load it in our collections system, saving you valuable time.
3. We have integrations and utilities for popular accounting providers like Quickbooks, AthenaHealth, eClinicalWorks, Eaglesoft and more. Your accounts can will be transmitted to us in a matter of seconds.

6. You get paid DIRECTLY

Collection letters are a low cost fixed fees service. There is no setup cost or any other hidden fees. Debtors are instructed to pay directly to you. We do not charge anything else.

7. Take the full advantage of our Online Client portal

Keep a track on how successful have our recovery efforts been for you. You can stop or pause the recovery on any account through our Client Portal. No need to call us, simply inform us through the convenience of our online Client Portal once a payment is received. Our online portal is 100% complementary for all our clients.

8. Transfer unpaid accounts to the Next Step – Collection Calls

Accounts which remain unpaid after the Collection Letters service, are placed on a web page of our portal called the “Transfer Queue“. Based on your instructions (or per the contract), these accounts can be transferred to the next step, the COLLECTION CALLS service, automatically or selectively. Collection calls are contingency based and at Kinum we call it the COLLECT service.

9. Why are Kinum’s Collection Letters more effective than Client’s own in-house collections?

Debtors which have not paid after 60 days are past due, are likely not going to pay you easily now. Collections being made in your OWN BUSINESS NAME can only be so much effective. Clearly your debtor has more serious cash flow issues. May be he has more than just your bill to be cleared and his financial problems are getting worse with every passing day. However, when a debt collection letter is sent under the name of a COLLECTION AGENCY, the whole equation changes. They are more likely to pay now verses when the demands were being send under your own business name.

10. Kinum offers COLLECTIONS GUARANTEE for Collection Letters service:

We are very confident of providing you better results through our “CONNECT/Collections Letter” service that we even offer you a guarantee. These lines are mentioned in our contract at the date of writing this article.

“We promise to minimally collect 2 times your purchase price if all accounts purchased under this Agreement are entered and processed through our Connect phase as instructed by Kinum and our representative, or we will refund the entire purchase price or the difference, if any, between what was collected in Connect and twice what was paid to use for the Connect service, whichever is less.“

How to get best results from Kinum’s Letters Service?

* Assign your accounts receivable to Kinum earlier for better results. For best results, we recommend submitting accounts for Collection Letters ( or the Connect – Step 2) once the account is between 60-120 days past due.

* A debtor may ask for backup documentation regarding the debt. Once a Kinum’s representative requests you to provide proof of debt owed, provide the invoice, receipts or contracts back to us quickly.

How much does our Collection Letters service cost?

Our CONNECT phase charges vary from $10 to $25 per account.

• a 25 account order will cost you $25.00 per account.
• a 50 account order will cost you $16.50 per account.
• a 100 account order will cost you $14.50 per account.
• a 250 account order will cost you $13.50 per account.
• a 500 account order will cost you $12.50 per account.
• a 1000 account order will cost you $10.75 per account.
• a 2500 account order will cost you $10.25 per account.
• a 5000 account order will cost you $9.25 per account.

There is a simple calculation on how many number of accounts one should consider buying, it should be number of accounts you will need in the next 2 years. Since the accounts purchased from Kinum never expire, therefore do not hesitate to buy more accounts to get the benefit of lower pricing.

We are licenced to collect in 49 states of USA and Puerto Rico. Only in Massachusetts, we perform collections through a local collections partner, which essentially gives us a nationwide coverage.

For each account assigned in the CONNECT phase, we send up to 5 collection letters, which have been crafted by an expert attorney. We perform free “Change of Address”, “Bankruptcy” and “Litigious Debtor” scrubs which help us improve our collections process.