Accounts receivable is defined as money which is owed to a company by a customer for products and services provided on credit. Several years ago Sheridan Memorial Hospital made it a goal to try and lower their accounts receivable significantly. Hospital Chief Financial Officer Ed Johlman says that in 2007 things weren't looking so good.
Johlman said that once an account becomes past due by more than 180 days, that money is usually never received by the hospital and it is written off as bad debt. Today, the Hospital's AR is dramatically lower than the almost $20 million it was at in '07.
There were a lot of people that contributed to the turnaround says Johlman.
Another aspect that helped lower the AR that may get overlooked is being more thorough when collecting patient information before the patient is checked into the hospital. By doing this, the hospital avoids any hangups with the insurance company that may come later during the billing process.