5 Common SMB Errors When Buying Medical Billing Software

When claims pile up, staff feel stretched, and reimbursements slow, the right billing software can make or break a medical practice. Choosing one isn’t just another tech decision—it impacts cash flow, compliance, and patient experience. A misstep can ripple through operations and hurt your bottom line.

Whether your budget is $50 or $500 per month, focus on value beyond price. In this guide, we outline five common mistakes small and midsize healthcare organizations make when buying medical billing software—and how to avoid them. Plus, you’ll get a practical checklist and a framework to calculate ROI before you commit.

5 mistakes SMBs make when choosing medical billing software

Here are the top five mistakes SMBs make in their medical billing software selection process, so you know what to look out for.

1. Skipping compliance checks

Not all medical billing software is compliant with HIPAA by default. In reality, compliance varies from one app to another. Sometimes, the discrepancies stem from a lack of programmer knowledge. They may not know what to include or how to program it. In other cases, a compliance rule may have changed, and the dev team wasn’t made aware.

For example, a small dermatology practice may choose a low-cost billing application that handles claims but doesn’t provide detailed logs and role-based access controls. A few months later, there’s a problem. While undergoing a payer audit, the practice isn’t able to demonstrate who had access to patient records and when. They then face the possibility of getting hit with a fine.

2. Ignoring integration needs

Medical billing typically occurs within the context of a much larger set of procedures, each with its own tools. Ideally, you want a solution that integrates the data from as many auxiliary tools as possible, such as electronic health records, clearinghouses, and practice management systems. Unfortunately, some options don’t enable these kinds of integrations. And some may integrate with a few other apps, but don’t share data with apps you currently have or plan to get.

The result is data siloes that slow processes and increase the chances of manual errors. It’s more common than you may think; according to recent Software Advice survey data, over a third (35%) of physicians expect the integration of new software with existing systems to be a challenge in 2026.* 

Consider an example: A primary care clinic implements billing software that can’t integrate with its EHR system. As a result, clinical staff have to re-enter procedure codes manually. Every now and then, while understandably feeling the pressure of their heavy responsibilities, they make a mistake. Each slip-up raises the rate at which claims get denied, simply due to human error.

On the other hand, if the billing software is integrated with the EHR system, accurate information would be seamlessly ported into the billing solution.

3. Overlooking training and support

The most powerful, feature-rich software is only as good as the training that supports it. Staff are bound to struggle if training is inadequate, and it’s easy to underestimate a new solution’s learning curve.

This is especially common when you buy software from vendors that offer only one or two support options, such as email and online documentation. As staff members scour through the documentation, search fatigue can easily set in. Even when they email the provider, it may take days to get a reply.

Without thoughtful, systematic training, many staff may end up wasting more time learning the program than benefiting from its features.

4. Choosing based on price alone

There’s no arguing that cost is essential for SMBs. At the same time, choosing billing software based solely on price can result in a higher long-term total cost of ownership.

For instance, suppose a small practice chooses an inexpensive software option. Even though it has low monthly fees, it doesn’t provide automatic claim scrubbing, which catches many errors that can prevent denials. Over time, the practice ends up investing countless hours reworking claims. As a result, revenue collection rates slow, interrupting cash flow.

It’s better to choose a solution based on its ROI relative to your overhead, instead of its upfront cost. This way, you assess its net value from a longer-term perspective.

5. Neglecting scalability

There’s no telling how much your practice may grow in the future, but it’s common for managers to choose software that only meets current needs. Whether you end up adding another location or participating in a merger and acquisition (M&A) deal, any number of factors can necessitate a more robust solution.

For instance, what if a practice expands into another state? If their billing software doesn’t support multi-state rules, they may end up footing the bill for another solution. This could also force them to perform a costly data migration to ensure the new solution has the correct historical data.

Scalability should always be a top priority, especially given the healthcare industry's rapid growth.

Your SMB medical billing software evaluation toolkit

You can use this checklist to guide your vendor demos and discussions about which option will work best for your practice:

Compliance (HIPAA)

• Role-based access controls

• Business Associate Agreement (BAA) availability

• Audit logs

• Data encryption while information is in transit and at rest

EHR integration

• Bi-directional flow of data to and from your EHR

• A list of supported EHR systems that includes either your current or a future EHR

• Compatibility with the clearinghouse you use

Ease of use

• Simple, intuitive workflows

• Automations that minimize manual entry

• Dashboards specific to individual roles

• Customizable dashboards

Reporting and analytics

• The ability to track claim denials

• KPIs based on revenue cycle goals

• Customizable reports

• Reports you can export into your desired formats, such as PDFs, Excel files, or Word docs

Vendor support

• Onboarding assistance

• Employee training, either in teams or one-on-one

• Live support options during times your practice is open

• Dedicated account management, if necessary

Find unbiased reviews

• Check platforms like Capterra and Software Advice for genuine user feedback.

• Avoid reviews posted on a provider’s website.

• Get opinions from colleagues from other practices who’ve had experience with a solution you’re considering.

Talk to advisors for free on Software Advice

• Fill out a form to schedule a specific time you want to be contacted by an advisor on Software Advice to narrow down your options. 

• Our advisors specialize in helping practices like yours find the right software fit. 

Quick-reference scoring matrix

Use this simple scoring system during your demos. Rate each vendor on a scale of 1-5 for each criterion, then total the scores to compare options objectively:

Scoring guide: 1 = Does not meet needs | 2 = Partially meets needs | 3 = Meets needs | 4 = Exceeds needs | 5 = Best in class

How to calculate ROI for your billing solution

There’s a lot more to consider besides the monthly cost of a medical billing solution. The actual value depends on long-term improvements in efficiency and accuracy, as well as on expenses associated with the application.

Here’s a simple formula you can use to calculate the net ROI of software you’re considering:

(This should be applied to a quarterly or yearly benefit-cost analysis.)

Monetary benefits may include:

• A reduction in the number of days a payment spends in accounts receivable (A/R). This improves cash availability, helping prevent the practice from taking on unnecessary debt.

• Higher claim acceptance and payment rates. A solution with claim scrubbing may lower your rejection rate from 7% to 2%, for example, which would have a direct impact on revenue.

• Reduced labor and administrative costs. Software that uses AI or other automation to reduce manual data entry can help prevent you from having to hire additional personnel to handle billing. This could save you tens of thousands of dollars a year.

• Fewer revenue leaks due to missed claims. Patients may receive treatment without being billed for it, but billing software can reduce this risk, resulting in higher revenue.

Of course, the benefits for your practice may be different, but these are a good starting point.

Some costs to consider include:

• Monthly fees

• Data migration

• Hiring external trainers

• Paying for premium support from the provider

To get the net ROI of each billing software you’re considering, add up the benefits and subtract the quarterly or yearly costs.

Use your evaluation toolkit and ROI analysis to build a shortlist

Even though it’s easy to make mistakes while choosing medical billing software, you can avoid costly errors by using the evaluation toolkit provided above. This can prevent you from getting a solution that doesn’t meet your needs. And by performing a net ROI analysis, you get a clear view of how your options compare in terms of the monetary value they bring to the table.

To learn more about the benefits of medical billing software, check out these articles:

• Buyers Switch to Mental Health Software for Greater Efficiency and Functionality

• What Is Electronic Medical Records Software? Key Insights for New Users

• 4 Key Medical Practice Management Software Features With Top Products That Offer Them