Most businesses don’t like billing. It’s tedious administrative work that costs them time and money. In fact, some businesses hate billing so much they’ll pay you to do it for them. That’s a potentially profitable, low-overhead business opportunity.
You can run a billing service from home full-time or part-time, with little specialized knowledge beyond the ability to use a computer. Adding a billing service is a great way for an accounting or secretarial service to expand its offerings. Of course, as with any business, the ability to market your service is the key to success.
There are two main types of billing services: those that serve health-care providers and those that serve small businesses (see “Billing-Software Companies”). Start-up costs for a general business billing service are significantly lower than those for medical billing services. If you already own a computer and printer, you can get started for less than $500 ($300 for software, $150 to $200 for stationery supplies). Start-up costs for medical billing services range from $4,000 to $10,000. In either case, a high-speed, wide-carriage dot-matrix printer is recommended for producing duplicate copies, along with a fast computer (preferably a 386).
GENERAL BUSINESS BILLING
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“Our research shows that small businesses in the service sector, such as landscapers and janitorial companies, lack the staff needed to generate invoices promptly and to adequately track payments and receivables,” says Scott McIntire, president of the American Association of Billing Professionals and owner of BlueJay Systems, which sells small-business billing software.
Lori Ende, who lives in Minnesota, chose to add a billing service to her home-based secretarial business when several of her existing clients asked for such assistance. She looked at several types of software before settling on the Basic Billing program ($289) developed by BlueJay Systems. (If you’re comfortable with database or accounting software, you can design your own billing system.) “Then I contacted the businesses that had previously expressed an interest, as well as others I thought were good prospects,” says Ende. “Eleven of the 50 businesses I spoke to agreed to try the service free for one month, and all signed on as clients.”
Ende received so many referrals from her original accounts that she was forced to turn away several prospective clients. The 45 to 50 hours she devotes to her billing service each month produces a gross income of about $2,400.
MEDICAL BILLING SERVICES
Medical billing primarily involves transmitting claims from doctors and dentists to insurance companies. Demand for medical-billing services, already strong, is expected to grow as pressure mounts to streamline the American health-care system. “Medicare in particular wants to see more efficiency,” says Art Streim, supervisor of support and training at AR Professionals. “Transmitting claims electronically can reduce processing time to as little as 7 to 14 days, whereas by mail it can take two months or more.”
Currently less than 10 percent of the more than six billion insurance claims filed annually are electronically processed. “Despite the pressure on health practitioners to file claims electronically, fewer than half of practitioners have computers,” says William J. Sarracini, president of National Healthcare Support Corporation in Mission, Kansas, “This gives the billing-service operator a considerable advantage in marketing his or her services.” Another key selling point is that a billing service can reduce a doctor’s overhead and improve cash flow by speeding claims.
The potential income from a medical billing service is determined by the number of claims filed. Some operators charge per claim, and other charge a percentage of the amount billed or flat monthly fees. “Most people charge $1.50 to $2 per claim,” says Merry Schiff, owner of Health Software Systems, although some services charge as much as $3 per claim. “Once you get going, it’s possible to make $10,000 a month.” That’s the case for Linda Jones, who runs Our Billing Service in Sebastopol, California, and has processed as many as 11,000 claims in one month (at $1.80 per claim).
Medical billing is more complex than general small-business billing. The method for filing insurance claims can vary from state to state. Thus, the training and ongoing support that a billing-software company offers is just as important as the software itself. When choosing a software package, ask for references of doctors who have worked with a given system; doctors are more likely than operators to give you an honest appraisal.
“Both types of billing services offer outstanding opportunity and income potential,” says McIntire. “But remember that you are the one who has to market the service. Your success depends on how much effort you put into it.”