Case-study

Cashflow Process and Finance Transformation for a Senior Care Group

SLKone took over the cash management process, month-end close, and finance functions at a senior care organization with more than 100 centers, helping the organization to avert a negative total liquidity while gaining visibility of the hurdles ahead

Situation

  • A private equity portfolio company had a limited line of sight of future cashflows & large cash commitments
  • The Revenue Cycle Management (RCM) process was highly manual and had inadequate visibility, resulting in slow collections (DSO 50+ days)
  • Management was expecting negative liquidity by the end of the month after exhausting their revolver facility
  • The accounting team lacked fundamental skills to close the month, complete treasury tasks, and reconcile balance sheet accounts

Bespoke Solutions

  • Enhanced the 13-week cashflow forecast model and coordinated the capture of all cash outlays
  • Develop an RCM dashboard to enhance visibility of key opportunities to reduce DSO by payor and center
  • Setup a cash disbursement process to stretch non-critical spend
  • Worked with key suppliers to extend payments
  • Enhanced reconciliation process, balance sheet review, development of accounting team, and treasury function

Leading With Results

  • Generated 6.3x higher liquidity than expected as a result of a controlled cash disbursement process and the implementation of a vehicle lease program
  • Improved collections forecast accuracy to +/-3% from the analytics performed on payor payment profiles
  • Corrected key balance sheet accounts after reviewing several fiscal years of transactions and completing updated reconciliations
  • Enhanced visibility of collection progress using an RCM dashboard triggering corrective actions by payor/center (=> DSO 38 days)
  • Evaluated the banking relationship to facilitate a new clearing house and automated RCM process