Local payment software innovation Nexion is allowing increasing numbers of GPs to improve their cash flow position, by reducing the cost of collecting receivables. It does so by generating significant savings on money currently spent on collecting funds in the traditional ways - employing resource-heavy accounts admin; chasing and sacrificing interest on delayed payments; writing off bad debts; and paying punitive bank costs.
Peter Melchior, the founder-MD and designer of Nexion, a single system for accepting, processing and reconciling all forms of payment, explains that the cost of managing accounts receivable is often overlooked when scrutinising cost efficiencies.
"A lot of focus is being placed on identifying cost savings to make the practice more efficient, but the cost of collecting funds entails much more than just the cost of the bank transaction or credit card fee. Doctors spend inordinate amounts on collecting funds in disparate ways, with different reconciliation methods for credit and debits cards, direct debits, cash, EFT payments and cheques."
Mechior says managing one's receivables through Nexion can make the difference between a marginal practice and a flourishing one.
The costs of collecting funds in the traditional ways are:
* The cost of funds themselves - missed interest on cash flow delayed.
* The high cost of bank charges.
* The cost of bad debt (writing off amounts).
* The high cost and bad PR of invoking debt collectors.
* The cost of staff and time spent on reconciling, balancing and tracking receivables, and sending statements.
* The lack of transparency into cash flow, and thus an inability to focus on problem areas.
* The cost of fraud, to which a disparate system is vulnerable.
Nexion alleviates these by:
* Giving practices the tools to be proactive about collecting funds at the point of service (minimising bad debts and speeding up cash flow).
* Requiring no upfront investment and managing payments at a competitive rate to current bank charges.
* Providing patient-friendly tools to pay on terms, enabling collection of old bad debt.
* Allowing practices to get commitments to pay prior to surgery, to collect shortfalls.
* Saving practices time spent reconciling and balancing to bank statements, with no additional spreadsheets and disparate systems.
* Providing visibility into cash flow, providing the tools to identify bottlenecks and allowing doctors to run their practice like a business.
* Minimising fraud risk by providing one source of receipts.
* Providing comprehensive reporting by profit centre or practitioner providing management information.
Mechior adds that Nexion is even more relevant in view of two distinct trends in healthcare - one being that fewer patients today have comprehensive coverage, the other that medical insurance does not always cover the full doctor's fee. "The result is that the doctor is left with the task of collecting fees or the difference between what the medical aids pay and what is due. Nexion provides the tools to alleviate the cost of those collections."
He notes that Nexion is not intended to replace good practice management.
It provides to tools to implement good practice management discipline without the need for onerous duplicated recording of transactions.
"It is part of good practice management discipline, in that it provides doctors with the tools to be proactive about money management, to run their practice like a business, and most importantly, to give them enough management information to identify problems."
A year since founding Nexion, Melchior has turned the increased financial success of his clients into a growth-sustained business of his own, on average growing 10-15% per month.