In virtually any healthcare organization, corporate accounting is the custodian and curator of financial data to monitor and manage the organization and drive it forward to new levels of success. But as any controller or CFO of a multi-entity healthcare organization can tell you, financial consolidations remain one of the key hurdles. The time-intensive nature of information assembly, validation, and reporting for many accounting groups can sometimes be measured in weeks–rarely just days.
Consolidations–grouping together all related organizations under a single parent company’s control–is an essential requirement to create a single “operational” view of the entire organization.
Whether it’s a multi-practice clinic, a group of long-term-care providers, a network of hospitals, or a chain of imaging centers, stakeholders want and need to understand various lines and businesses, allocate capital and fund the organization. Consolidation eliminates all inter-group activities and balances to report transactions with external third parties as if the entire group of companies was operating as a single entity.
Different legal entities (clinics, diagnostic centers, medical labs, and practices) are created by a parent company for a range of reasons and purposes. Some are legally driven to limit liability exposure, while others are created to optimize the tax profile or through strategically driven initiatives like mergers, and acquisitions.
Watch the brief video below to learn more: