Achieving client objectives:
- Documenting the current state of revenue recognition and performing a gap analysis to assess and identify the root causes of material adjustments
- Designing future-state processes in revenue cycle management, month-end reporting and contract management
- Supporting management in standing-up their contract management system by identifying the contract attributes critical to overall management and revenue recognition
- Reviewing nearly 800 contracts and performing quality assurance checks on the new system to ensure data integrity
- Identifying root causes of significant adjustments and building a month-end revenue recognition tool using Alteryx and SSIS to calculate and post month-end revenue entries
- Developing a month-end model in SQL Server Integration Services (SSIS) to assess the quality of accounts receivable and calculate the required period-end reserve amount
- Supporting the company in determining annual revenue impact and restating monthly revenue for the prior fiscal year
Building and integrating a contract management system into revenue recognition
The team also reviewed contracts to gain an understanding of what part of the company’s revenue should be based on contractual rates with payers and populated that information into a contract management system. The contract management system was then integrated into an automated model that accurately calculates the revenue imported into the company’s general ledger.
Collaboration for a strong public company foundation
The collaboration between Protiviti and internal stakeholders helped this healthcare client identify the root causes of material excess write-offs and opened the doors to recalculating and restating the previous two years’ revenue. The company eliminated unexpected bad-debt write-offs and improved the accuracy of revenue recognition by developing an accounts receivable (AR) model that enabled AR monitoring and receivables risk on a real-time basis. The real-time view gave confidence in the sustainability of the model and the automated processes for revenue recognition.
The company reduced its risk of financial restatement by increasing accuracy and can now quickly produce financial statements that can withstand the scrutiny of an audit. Upgrading revenue recognition processes brought expedited financial reporting and reduced the time of the financial close from 15 to five days, providing more time to analyse results and outputs. This increased the PE firm’s confidence in the portfolio company’s reporting, contributing to the value creation goals of the PE firm.
In sum, effective revenue cycle management, contract management and month-end financial reporting brought automation, accuracy and sustainability to the company and contributed to its value. With one major improvement accomplished, the company continues to collaborate with Protiviti on building its public readiness infrastructure. This includes Sarbanes-Oxley (SOX) compliance initiatives, improving internal process documentation and supporting month-end optimisation — all toward building a strong public company foundation.