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# The Therapist Practice Series - Part 6: Managing your Cash flow

Therasoft Webmaster
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June 29, 2016

In previous articles, we talked about how to prepare your practice for success. From structure, to marketing, to client management. This week, we talk about a central part of your practice: cash-flows. The business of therapy has a different structure than traditional businesses. As a therapist, your revenue comes from two main sources: clients and insurance companies. In this blog post, we will go over best practices to get paid depending on your structure and who pays you.

### Receiving money from your patients

Once your patient sets up an appointment with you, you must decide when to request for payment. The best time to receive payment is before the day of the session. The second best time is at the office right before or right after the session. Avoid postponing payment after the day of the session. Your chances of getting paid will decrease as days pass.

Requesting payment ahead of the session has several main benefits. It improves your cash-flows, of course. It also limits chances of no-show - people are more likely to come to a session they already paid for. And finally, it separates the financial transaction from the doctor-patient relationship. If you don't have to talk about money the day of the session, you can focus on your patient's problems.

The only way to receive payments ahead of the session is by enabling online payments on your website. A payment solution like TSecurePay will let you do just that. It saves your patient's credit card information when they become a customer. You can then link that payment solution to your online calendar. Your patient will be able to make an appointment and pay directly from your website with one click.

### Receiving payment from third-parties

Sometimes, payment doesn't come from the patients themselves. Employers can pay for an employee's session. A family member may be paying a session for a loved one. These payers are generally not present during the session. That's why it is crucial to provide them with a solution to pay online. It also increases your chances to be paid on time.

### Receiving payment from insurance companies

The delay to receive payment from insurance companies can vary from 7 to 90 days. Whether you get paid within a week or three months will depend on how convenient your payment process is.

A paper process will take much longer than an electronic process. You must mail paper claims, which takes time and resources. Plus you take the risk of making mistakes when filing it. What if you miss a number in your patient's group ID? You won't be aware of it until the insurance company notifies you via mail several weeks later.

If you use an online therapist platform like Therasoft, you can file a claim with one click. Electronic claims are more accurate and sent much faster to insurance companies. It will notify you within minutes if an insurance company rejects a claim.

Another thing that can delay insurance payment is a change in your patient's insurance. Like spelling mistakes, outdated insurance details will postpone payment by several weeks.

Every time your patients visit your office, ask to verify their insurance information. If a change happened, record the change immediately in your system.

Preventing mistakes and delays when filing insurance claims is crucial for your practice. It will improve your cash-flow, but also guarantee that you actually get paid. All insurance companies have time-limits to submit claim after a therapy session. If you miss the deadline, they will not accept your claim, and you will not get paid.

### What about Group and Large Practices?

Group practices are usually managed by one person, the owner. The owner, who is also a therapist, receives all the revenue of the practice. He or she then takes care of redistributing it to each member of the group. Here are a few things you can do as a group owner to maximize cash-flows:

- Deduct the operating costs from the revenue before distributing it. On average, a group practice takes 30 to 50% of a therapist's revenue to pay for expenses. These expenses include rent, internet and phone, electricity, marketing efforts, accounting, and more.
- Only pay therapists revenue that you've already collected. Don't pay for billed revenue that you haven't received yet. It will encourage members of the group to make sure they file accurate claims for fast payment.

Large practices with thousands of patients usually hire therapists as part-time employees. They have a different structure and area of expertise than smaller practices. Because of that, most of their revenue comes from insurance companies.

As an owner of a large practice, it is crucial that you spend resources in filing claims everyday. We recommend hiring a full-time employee to attend to this task. This will help free up time in your schedule to take on more patients. Plus, you will limit chances to have unfiled claims which never get paid.

In Part 7 of this Therapist Practice Series, we’ll talk about the benefits of using a tablet during your sessions. Subscribe to our newsletter to receive the next article directly in your inbox. And follow us on Facebook, Twitter or LinkedIn for more useful resources for therapists!

Did you enjoy this article? Check out the rest of the series:

Introducing The Therapist Practice Series
Holistic Strategy for Success - Part 1
Marketing a Counseling practice in 2016 - Part 2
Counseling and Content Marketing - Part 3
Managing Client Interactions - Part 4
Managing your workflow - Part 5