Business Basics in the New Normal
on June 26, 2020
By: Miriam Lieber, Lieber Consulting
This article was originally featured in the 2nd Quarter 2020 issue of Essential Advantage.
In these unusual times, life for Essentially Women is nothing short of challenging. As essential service providers, most of you work directly with customers. During a conversation with a boutique owner, she mentioned that she is carefully evaluating every single expense. In addition, we discussed how she can hone her business practices, ensuring she is operationally as efficient as possible when this emergency is over. Here are some opportunities to firm up your operation as you navigate this new normal:
- A/R COLLECTIONS - Know how much money is outstanding in accounts receivables. Make sure the receivables do not exceed (or even approach) timely filing limits. Segregate the outstanding monies by the largest and oldest balances first. Determine which of the payers have short time limits by which you must resubmit the claim and work on those first. For any and all claims that remain unbilled, work to submit the claims in the same way -- before they reach timely filing limits. To determine which is the oldest and largest, sort your AR by payer, dollar amount, and date of service. Work, as mentioned, in descending balance order. Add up the net amount expected to receive and track it accordingly. Prior to submission, ensure the claim is payment worthy – documentation requirements are met and all of the needed documents are on hand. Set a goal to have the most vulnerable accounts worked by a certain date.
- INVENTORY CONTROL – One of the keys to operating efficiently is to use just in time inventory. Work with vendors who are willing to work with you. Especially during the pandemic, vendors are more willing to extend dating. Also, evaluate the best way to get the product to the patient. Perhaps you will now drop ship or offer curbside delivery. Some will offer free shipping. Regardless, having too much inventory is costly to the bottom line. Review which products you move the most and stock accordingly. With dropship, it reduces the amount of stock on hand. Staying close to your inventory needs will make you much more efficient and will help you reduce one of your two most costly expenses. Now is the time to do an inventory count and review your needs.
- KPIs (key performance indicators) – Once you shore up your receivable collections, and maintain optimal inventory control, you should establish goals and metrics against which to measure your progress. First, you must know how much you can accomplish, know what is expected on a daily, weekly, and monthly basis. For example, how many new orders will you receive each month? How long does it take to process the order? Set KPIs accordingly – How much in outstanding receivable dollars do you carry? What is your days sales outstanding (DSO)? Measure the number of denials you receive and how long it takes to resolve them. Measure how long it takes to get an order processed from intake to billing and from billing to collection. How much money is outstanding in unbilled revenue, for how long and for what reasons (e.g. no doctor order)?
- DOCUMENT PROCESSES FOR TRAINING – As you hone your processes, such as collections and even how you protect you and your staff during COVID-19, document this. Memorializing your processes is key for training purposes and to ensure you provide consistency in your company policies. Referred to as SOPs (Standard Operating Procedures), developing these will not only shore up your operation but you will meet accreditation requirements along with establishing basic business protocol. Load them onto a shared drive so staff has access and you can easily update them as needed.
- REVENUE SOURCES – Once you hone your operational processes, look for ways to garner new revenue. Look for new referral sources and offer complementary products to bolster incremental sales. Adding revenue to each patient is a great way to grow your business with existing customers.
- SOCIAL MEDIA – As you attempt to expand your revenue sources, use social media and other outlets to enhance your marketing efforts. Calling on plastic surgeons, oncologists, physical therapies, breast surgeons and other healthcare providers in the traditional way to generate revenue. While this is a primary way to gain referrals, use additional methods such as posting on social media, writing articles for associations and newsletters/magazines to bolster your presence and visibility and more. To add social media marketing efforts, consider hiring an intern who is savvy with this. Many college students have extra time and may even be studying digital marketing and most importantly, will be able to create posts for you and monitor your Facebook, Instagram, LinkedIn, Twitter and other accounts.
As you can see, there are many ways to fortify your company during this time. Whether you employ one or more of these ideas, look forward to improving operational efficiencies and effectiveness. You will feel productive and most importantly, it should help you remain sustainable. Thanks for all you do for your patients to help improve their quality of life as you risk your own health and well-being to do so.
Lieber Consulting LLC
- essentially women
- women's health