In 2002, Receivables Performance Management, LLC incorporated. Their headquarters are in Lynnwood, Washington. Because it is a company with so much experience, when Receivables Performance Management reviews something, people have a tendency to listen. Most recently, they have completed a review on just what accounts receivables management actually is, and how these procedures relate to investing and other financial services. The company hopes that, through their research, there is a greater understanding of what accounts receivable is, and why it is so needed.
Receivables Performance Management Reviews the Process of Accounts Receivable
Accounts receivable is a form of art. It looks at how a company extends credit to their customers, and formulates when this money can be returned. Generally, the money owed is for a product or service. An example is a doctor who has treated a patient and expects to get paid for these services. Patients pay a proportion, and the insurance company pay another proportion. Because insurance companies are also involved in investing, they tend to wait as long as possible with making their payments, aiming to earn more from the money they have first.
There has been a lot of research into whether or not the way insurance companies reimburse is fair or not. Regardless thereof, the system is here to stay. And this means that any organization that expects payments from the insurance industry should place an emphasis on accounts receivable management as well. Of course, the same is true for any organization that does not immediately get paid for their services.
Companies like Receivables Performance Management are still reasonably new in this world, mainly because accounts receivable was traditionally a task completed by the finance department of a company. However, due to increasing complexities and government legislation, many businesses now outsource it instead. And they turn to Receivables Performance Management for this as an example of best practice.
Their staff members will research every payment made, as well as every non-payment, focusing particularly on why payments are late, partial, or non-existent. Often, there are issues with how a claim was filed, and this leads to delays. Staff at Receivables Performance Management is value for their strong analytical skills, their diligence, their attention to detail, and their patience. But mainly, they are valued for their ability to get the job done and to ensure payments are made.
One of the things the company does, and what they feel all accounts receivable management professionals should do, is create an aging report. These reports highlight moneys owed, breaking these amounts down in time periods, clearly showing which payments are late. The company always thrives to have an aging report where less than 5% of the total has been pending for longer than 30 days.
Clearly, this type of work is vital to the survival of any type of organization. This is why any advice provided by Receivables Performance Management is so valued. Many companies who do not outsource their accounts receivable regularly turn to them for help and guidance.