Financial Leadership for Healthcare Tech Company

Background

A leading healthcare technology company needed help — a recent vacancy in financial leadership soon after an acquisition had left the company with an ever-increasing amount of unresolved issues. As a leading provider of biomedical and diagnostic imaging service solutions, the company needed someone with the experience and energy to assess the situation, and get to work immediately. That’s when an E.L.I. partner stepped in.

Situation

The E.L.I. Partner’s job was to provide financial leadership at the divisional level, with dual reporting responsibilities to the corporate SVP, Chief Accounting Officer and the divisional CFO. The acquisition of a complimentary services company had recently occurred and the integration was stalled. Questions arose concerning the due diligence, controls, and accounting processes of the acquiree and the E.L.I. Partner was asked to address each of these concerns. The E.L.I. Partner assessed critical financial reporting practices and controls. In addition, the E.L.I. Partner was to assess personnel, mentoring or replacing staff as required. As the E.L.I. Partner investigated current practices they identified issues in a number of areas. Software upgrades had not been appropriately handled across the division and when prepaid service contracts were terminated early or modified, communication had been muddled between the field, supply chain, accounting, and payables, leading to confusion and errors in the receivables. With the E.L.I. Partner’s leadership, both issues were swiftly identified and resolved. The financial staff was assessed and where appropriate talent recruited to fill critical roles. In addition, the E.L.I. Partner was asked to assist the new Chief Financial Officer execute his first-100-days plan.

Solution

The E.L.I. Partner developed controls, policies, and practices to correct SOX compliance deficiencies. They also developed analysis tools to assist with internal audits and review of third party vendor contracts, which included revenue recognition and expense adjustments. The E.L.I. Partner worked with supply chain, accounts receivable and payables departments on the review and collection of outstanding prepaid services that were cancelled prematurely; and they ensured that proper accounting for vendor service contracts were completed both retroactively and on a go-forward basis — representing approximately $125 million of revenue annually.

Results

The E.L.I Partner led the financial team in completing, on a timely basis, the integration of the acquired company. Areas of concern relative to processes and controls of the acquiree were remediated. SOX compliance deficiencies were resolved and the E.L.I. Partner improved the financial function’s overall organizational structure, processes, and talent. This improvement in the client’s financial function and controls environment assisted the client in its successful completion of an initial public offering.