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Osteopath: Cash from debtors

'Cash from debtors' means any income you receive from account customers that you send an invoice to, usually at the end of the month. After they have been sent an invoice but before they pay, they are your debtors. When they pay you, the payment is referred to as Cash from debtors.

Your main account customers are likely to be health insurance companies. Some of your patients will pass you their completed claims forms when treatment has finished and you will then have to collect your fees from the insurance company. Once you have invoiced the company but before it has paid you, the company is your debtor - when they pay, the payment is Cash from debtors. It is a good idea to contact the health insurance companies you will be dealing with to see how long you will have to wait before receiving payment. If it is typically longer than 30 days, include projected income from insurance companies as Cash from debtors (that is, in the month after the treatment has been completed). If the delay is less than 30 days, treat such payments as 'Cash sales'. Alternatively you may decide that you do not want to wait so long for payment and require all patients to settle their fees immediately after receiving treatment and then reclaim the money from the insurance company themselves. (According to the General Osteopathic Council (GOsC), around 10% of all treatments are funded by private health insurance.)

If you treat NHS patients, you will be paid by the Clinical Commissioning Group (CCG) or Health Board in whose area the referring GP practises. (NHS patients are likely to be very much in the minority - probably less than 10%.)

You may also offer account terms to customers that you work for on a regular basis, such as local businesses, sports clubs or fitness centres.

Payment terms

Agree payment terms with your account customers so that there is no confusion as to when invoices should be settled. You might, for example, require all accounts to be settled every month, perhaps by a particular day of the month. Alternatively, you might state on your invoice that payment must be made within, say, 28 days of the invoice date.

Make an estimate of the amount of income you are likely to receive from account customers each month. Enter the amount in your cash flow in the month in which the money is due to be received.

Consider what steps you will take to recover any overdue amounts and whether interest will be charged on these.

Your business stationery

Have some invoices printed for your account customers. A good printer will be able to advise you on layout, style and even content.