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HomeRCMHealthcare Revenue Cycle Management – An Entrepreneur’s Perspective

Healthcare Revenue Cycle Management – An Entrepreneur’s Perspective

By Gary Wakeford, Chief Executive Officer, SonoStik

In the early stage of managing and developing a MedTech startup, very few things present as many challenges or have the potential to create real-time crises as Revenue Cycle management.

The ability to raise capital and accurately forecast and manage cash flow will make or break your probability of success.

One of the single most important parameters any start-up must get right is the financial model or operating plan. The financial plan has an immediate and very real impact on all facets of the business. If the financial plan doesn’t work, the wheels will fall off all other parts of the business.

When it comes to raising capital, the key questions are:

  1. When do I start the process?
  2. When do I stop?

The answers are fairly simple…

  1. You start NOW.
  2. You NEVER stop!

While there is always a certain ebb and flow to the process, many entrepreneurs wait too long to start. They convince themselves that things are not quite perfectly aligned, and they feel as if they are not quite ready to ask for money. In reality, this is when you should start.

The important point to remember is never to wait until you need the money to ask for it. The first part of when to reach out to potential investors is before you need the money. Your initial goal is simply to inform them of your presence, show them the progress made to date and get on their radar. Your actions here will demonstrate to them that you are in charge of your business and have a specific road map for where you are going and how you will get there.

Getting this right will be tremendously helpful to your fundraising efforts. Getting it wrong will create serious doubts in investors’ minds as to your ability and competency to successfully develop the company and product into a successful entity.

Simple equation: NO CAPITAL = NO COMPANY.

Each company tends to have its own unique set of circumstances that must be factored into the individual operating plan. It is this element that is the main reason you really need to build your plan from the ground up. Trying to use a pre-existing template will likely miss important aspects unique to your company and may also send the message that you’re trying to take the easy way out.  Building the plan from the ground up will show investors that you have taken all pertinent issues into consideration, that you thoroughly know all aspects of your business, and that you have accounted for all possible scenarios.

This shows in a very convincing fashion that you know the business, you know the market, and you know exactly how and why you and your team will be successful.

Once the cash hits the bank, your next challenge is to monitor your cash and your collections as closely as your sales projections.  Having an experienced, professional, and articulate person to manage this process is key. Diligent and timely follow-up with all accounts and receivables can have a tremendous impact on your cash flow and balances.

There are many uncertainties in the financial markets today that are adversely impacting timelines for accounts receivable.  Having a dedicated person(s) in place to ensure the cash flow is keeping up with expectations is often the difference between success and failure.

As our world moves more towards automation and the use of artificial intelligence to manage such processes, it is especially important in the early going to add the human touch to the collection process can turn the tide in your favor. Assume nothing, managing your cash inflow is as critical as managing your outflow. Make sure you are giving this critical aspect of your business the attention it deserves.

Technology can be great at improving efficiencies, but when cash is king (and it always is), staying personally involved in the process will tend to pay huge dividends in ensuring your start-up becomes so much more.

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