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Situation
A rapidly-growing client in the health care industry was experiencing problems with their accounts receivable. The success of the business hid the fact that accounts receivables were 160-180 days old until the owners noticed a significant decrease in their cash flow. Once the accounts receivable situation was uncovered, the client noticed a number of other financial issues that needed to be addressed. The client's financial staff was very lean, resulting in medical practitioners having responsibility for certain aspects of the financial operations.
Solution
Eide Bailly was hired to address bookkeeping and financial issues other than the accounts receivable problem, as it was determined that the organization should address that issue with its own personnel. We worked with the client to 1) restructure their chart of accounts; 2) introduce Quickbooks as a bookkeeping method; 3) train client personnel to accurately code invoices; 4) develop a system to track and reconcile cash; and 5) create monthly financial reports.
After several months of working on the above projects, the client was so pleased with the results attained that we were engaged to find a solution to the accounts receivable issue.
Results
- Accounts receivable has been reduced from the prior 160-180 days to 20-30 days after approximately one year.
- Client's internal bookkeeping systems are running much smoother.
- Client relies on Eide Bailly as a sounding board for management on many of the decisions they make for the business, not just for financial issues.
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