In virtually any healthcare organisation, corporate accounting is the custodian and curator of financial data to monitor and manage the organisation and drive it forward to new levels of success. But as any controller or CFO of a multi-entity healthcare organisation 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 organisations under a single parent company’s control–is an essential requirement to create a single “operational” view of the entire organisation. Whether it’s a multi-practice clinic, a group of long-term-care providers, a network of hospitals, or a chain of imaging centres, stakeholders want and need to understand various lines and businesses, allocate capital and fund the organisation. 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 centres, 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 optimise the tax profile or through strategically driven initiatives like mergers, and acquisitions.