By PRN Funding

*Medical Coding Factoring

Terminology

*Introduction Into Medical Coding

Factoring

*Medical coding factoring is a financing technique that offers fast funding for medical coding firms. Medical factoring companies purchase your outstanding invoices and convert them into available cash. Before factoring, it’s good to be familiar with some of the terminology associated with medical coding factoring.

*ACH (Automatic clearing house)

*ACH is a function used by the factor to electronically fund the Account Creditor, making cash available to them in one business day after ACH initiation.

*Account Creditor

*The Account Creditor (you) is the medical coding firm that starts the factoring process.

*Accounts Receivable

*Amount of cash that is due to the Account Creditor for providing medical coding services to their clients.

*Account Debtor

*The Account Debtor (Your Customer) is the client that receives medical coding services from the Account Creditor and is liable for paying the invoice.

*Cash Flow

*This is the influx and outflow of cash through the medical coding company.

*Collateral

*This is the influx and outflow of cash through the medical coding company.

*Discount Fee

*A fee issued by the factoring company based on the invoice value, time it takes to collect, and the Account Debtor’s (customer’s) creditworthiness.

*Medical Coding Factoring

*A funding method involving the purchase of a medical coding company’s unpaid invoices in exchange for a cash advance of equal value.

*Non-Recourse Factoring

*A more expensive invoice factoring method whereby the factoring company assumes the risk and remains liable for invoice payment should the

customer fail to pay.

*Notification

*This occurs when the factoring company informs the Account Debtor that their accounts receivable

have been factored and payment terms are established between the parties.

*Recourse Factoring

*A less expensive invoice factoring method whereby the Account Creditor remains liable for the invoice payment should the customer fail to

pay.

*Reserve

*A portion of money held by the factoring company that is released once the customer pays the invoice off. (Advance Rate + Reserve = 100%

of Total Invoice)

*UCC

*A Form UCC1 report filed to perfect a security interest in collateral.

*Contact

*Becoming familiar with medical coding factoring terminology will help your company as it seeks to improve its cash flow with factoring. To start the process, contact PRN Funding at 216-504-1000 and visit us at http://www.prnfunding.com/medical-coding-factoring.