Accounts receivable

Accounts receivable is a vital element of a company's financial well-being, representing the outstanding amounts owed by customers who have purchased goods or services on credit. This aspect is a significant indicator of a company's liquidity and overall financial stability. Effective management of accounts receivable is essential for maintaining a consistent cash flow. It involves issuing invoices promptly, diligently tracking and following up on outstanding payments, and establishing clear credit policies to minimize delays or defaults. Proper management ensures that a company has enough working capital to meet its financial obligations and seize growth opportunities. Additionally, it helps in early detection of potential cash flow challenges, allowing proactive measures to be taken. A low accounts receivable turnover ratio indicates prompt payment by customers, which reflects positively on the company's financial health. Overall, managing accounts receivable efficiently is crucial for sustaining cash flow, ensuring financial stability, and fostering long-term growth.

Accounts Receivable

Accounts Receivable in a billing company refers to the outstanding amounts of money that are owed to healthcare providers by patients or insurance companies for the services provided. Managing AR is a crucial aspect of medical billing, and billing companies play a vital role in ensuring that healthcare providers receive timely payments for the services they render.

Here are some key functions of AR in a billing company


Billing and Claims Submission: The billing company is responsible for generating accurate and timely bills based on the services provided by healthcare providers. This involves coding procedures, submitting claims to insurance companies, and sending invoices to patients.

Follow-Up on Unpaid Claims: After submitting claims, the billing company monitors the status of these claims. If a claim is denied or not paid in full, they initiate the necessary follow-up actions to rectify any issues and ensure proper reimbursement.

Payment Posting: When payments are received from insurance companies or patients, the billing company posts these payments to the corresponding accounts. This involves accurately recording the amounts received and adjusting the account balances accordingly.

Denial Management: AR specialists in billing companies work on resolving claim denials. This involves investigating the reasons for denial, correcting errors, and resubmitting claims to ensure that healthcare providers receive the maximum reimbursement.

Patient Communication: Billing companies may also handle communication with patients regarding outstanding balances, payment plans, and other financial matters. Clear and effective communication is essential for resolving billing issues and ensuring timely payments.

Efficient management of Accounts Receivable is crucial for the financial health of healthcare providers. Billing companies play a significant role in optimizing revenue cycles by minimizing delays in reimbursement and improving overall cash flow.

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