Take a bite out of profits
with Bruce Burns
Q.What area of my business can I focus on to improve earnings and cash flow and simultaneously prepare my business for sale?
A. Accounts receivable is one of the largest assets of a business and the most important to monitor. It not only provides the cash flow to keep the business alive, but if the claims are not submitted properly it can cause post payment audit, problems, cash flow shortages and major penalties that can cause extreme hardships on a business. The largest deal killer when it comes to selling a business is non-compliant accounts receivable files. If the files are not up to the standards of the buyer, it will be the responsibility of the seller to correct the files and in some cases complete new ones. This is normally a major project that can either delay a sale or push the buyer to walk away if they feel it is serious enough. It is important for an HME owner to have an outside reimbursement specialist perform periodic random audits, preferably every six to 12 months. The owner is responsible for all employees who may be submitting claims improperly or even illegally. In a couple of days, the specialist can tell you if there are problems that need attention and come up with an action plan to correct the problem. It is one of the best investments you can make that will give you more cash flow, earnings, and peace of mind your accounts receivable is compliant and functioning properly.
Bruce Burns is president of Affinity Ventures. He can be reached at firstname.lastname@example.org.