Get Paid Faster by RCM Clients: A Proven Method to Transform Your Cash Flow

Getting paid faster by your RCM clients doesn’t have to be complicated. While the healthcare industry spends considerable time discussing collection strategies for insurance companies and patients, there’s a critical gap in addressing how billing companies can accelerate payments from their own clients—the healthcare providers they serve. The solution is surprisingly straightforward: invoice on the first of the month and initiate ACH payments three days later.

The Simple Formula for Faster RCM Client Payments

The process is elegantly simple: On the first business day of each month, send your invoice. On the fourth business day, initiate an ACH transaction. Within a few days, funds hit your bank account. This systematic approach eliminates the traditional payment delays that plague revenue cycle management companies.However, implementation requires more than just changing your billing schedule. Success demands strategic planning, client communication, and contract modifications to ensure smooth adoption across your client base.

Why Traditional Payment Cycles Are Costing You Money

Consider this common scenario: For April services, payments from insurance companies arrive around the 15th of the month. If you invoice clients on the 20th after completing month-end processes, give them 30 days to pay, and they actually pay in 40 days on average, you’re receiving compensation in July for work completed and paid for in mid-April.This creates a devastating cash flow gap that forces RCM companies to:

• Finance client operations by waiting months for earned revenue
• Allocate resources to chase payments for completed work
• Absorb opportunity costs from delayed cash flow
• Strain working capital unnecessarily

The traditional approach where billing companies received their percentage directly from insurance payments has largely disappeared for legal reasons, but the concept remains sound: when your client gets paid, you should get paid.

Overcoming Client Resistance: Proven Strategies

Contract Language and Initial Conversations

Begin by modifying your service agreements to include automated payment terms. Most clients will initially resist this change, but the conversation becomes easier when framed properly:“You’ve already received payment for the work we completed. There’s no logical reason for us to wait months to receive our small percentage while you benefit from improved cash flow from our efforts.”

The Funding Argument

When clients push back, position your company as their lender of last resort:“If you need us to fund your operations by delaying our payments, we’re effectively acting as your bank. As a high-risk lender, we’d need to charge approximately 30% annually for this service—or we can simply get paid when you get paid.”

Alternative Payment Solutions

For particularly resistant clients, offer these options:Credit Card Payments: Clients can pay via credit card, but they absorb all processing fees (typically 3-4% on large monthly bills). This option quickly redirects conversations back to ACH automation.Limited Account Setup: Create a dedicated bank account containing only the average monthly billing amount. This protects clients from over-withdrawal while ensuring automatic payments continue.

Technical Implementation and Risk Management

ACH System Safeguards

The Nacha system governing ACH transactions provides built-in protections. Clients can dispute charges, but unlike credit cards, disputed funds return immediately to the client while you pursue resolution through traditional collection methods.Implementation timeline:1. Day 1: Send detailed invoice with collections report2. Days 2-3: Client review period for disputes or questions3. Day 4: Initiate ACH if no issues raised4. Days 5-7: Funds settle in your account

Month-End Process Optimization

To invoice on the first of each month, you’ll need streamlined month-end reporting processes. This includes:

• Automated close procedures by midnight on the last day
• Real-time reporting systems for immediate invoice generation
• Standardized vendor selection processes for efficiency
• Clear communication protocols with clients about the new timeline

Measuring Success: Cash Flow Improvements

Companies implementing this automated payment system typically see accounts receivable improvements of up to 60 days. This dramatic reduction in collection cycles provides:

Quantifiable Benefits

• Improved working capital for business reinvestment
• Reduced collection costs from eliminated chasing activities
• Enhanced cash flow predictability for strategic planning
• Decreased bad debt risk through systematic collection

Operational Advantages

• Streamlined accounting processes with predictable payment dates
• Reduced administrative overhead from manual follow-up activities
• Better client relationships through transparent, systematic processes
• Increased competitive advantage through improved financial stability

Advanced Strategies for Implementation Success

Client Segmentation Approach

Not all clients will adopt automated payments simultaneously. Prioritize implementation based on:High-Value Clients: Start with your largest revenue generators where impact is most significant.Technology-Forward Practices: Target clients already using automated systems for other business processes.New Client Onboarding: Make automated payments standard for all new contracts.

Industry Best Practices Integration

Combine automated client payments with other revenue cycle optimization strategies including:

• Real-time eligibility verification
• Automated denial management
• Predictive analytics for cash flow forecasting
• Integration with existing practice management systems

Conclusion

Getting paid faster by RCM clients isn’t just possible—it’s essential for sustainable business growth in today’s competitive healthcare landscape. The combination of first-of-month invoicing and automated ACH initiation creates a systematic approach that benefits both billing companies and their healthcare provider clients.Success requires careful contract modification, clear client communication, and robust technical implementation, but the financial rewards justify the initial effort. Companies that embrace this approach typically see dramatic improvements in cash flow within the first few billing cycles, creating a sustainable competitive advantage in the revenue cycle management industry.The question isn’t whether you can implement automated client payments—it’s whether you can afford not to in an industry where cash flow directly impacts your ability to serve clients effectively.