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Article: Avoiding potential problems when selling accounts receivable. (accounts receivable financing)
- Article from:
- Healthcare Financial Management
- Article date:
- May 1, 1996
- Author:
CopyrightCOPYRIGHT 1996 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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PATIENT ACCOUNTS MANAGEMENT
Accounts receivable financing is a potential tool for managing a provider organization's working capital needs. But before entering into a financing agreement, organizations need to consider and take steps to avoid serious problems that can arise from participation in an accounts receivable financing program.
For example, the purchaser may cease purchasing the receivables, leaving the organization without funding needed for operations. Or, the financing program may be inordinately complex and unnecessarily costly to the organization. Sometimes the organization itself may fail to comply with the terms of the agreement under which the ...