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Article: Measuring accounts receivable performance: a comprehensive method.
- Article from:
- Healthcare Financial Management
- Article date:
- May 1, 1993
- Author:
CopyrightCOPYRIGHT 1993 Healthcare Financial Management Association. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Nonperforming assets, such as accounts receivable, are frequently cited as sources of financial difficulty for hospitals. Yet, many hospitals, relying on the traditional measure of accounts receivable--days revenue outstanding-- may not have a true grasp of the real cost of their accounts receivable. The author discusses the costs imposed on a hospital by accounts receivable and describes three cost components that must be calculated if the true cost of accounts receivable is to be determined and controlled.
One of the largest assets a hospital has is its accounts receivable. For a typical hospital, net accounts receivable may represent as much as one-half of ...