DQ 1 Week4
You notice that your accounts receivable days outstanding have doubled in the first 6 months. Do you give someone a bonus or put him or her on probation? Why? Just because the accounts receivable days outstanding have doubled in the first 6 months does not mean that someone gets a bonus or is put on probation. There is not enough information given in this question to warrant such action. This type of action is jumping to conclusions and assuming without the evidence to substantiate such an action. What would warrant such action of probation would be if this has happened before, and the correct training has been provided, inefficiencies have been documented, and the employee(s) have been counseled verbally and written counsel has been documented. What this does mean is that there is a challenging issue and the root cause of this issue needs to be found. An investigation is in order to figure out and understand what is causing the accounts receivable to double. This also raises the question as to why it has taken six months to figure out that there is an issue. Since accounts receivable is made up of what monies are owed to the organization from such examples like the patients copayments or payments for service, insurance companies or third party payers, part of the investigation should include what is outstanding or what kind of credit has been given to raise the amount of outstanding days for the accounts receivable. Also before the investigation is closed and hopefully the root cause of this issue is found, policies and procedures may need to be revisited since it is evident that what is in place is either not working or not being followed.
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