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Financial Consolidations for Multi-Entity Healthcare Organizations 3 In virtually any healthcare organization, corporate accounting is the custodian and curator of financial data to monitor and manage the organization and drive it forward to new levels of success� But as any controller or CFO of a multi-entity healthcare organization 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. The Challenge for Multi-Entity Healthcare Organizations The Challenges of Consolidation Today Consolidations are a staple of accounting of course, but their intensity and complexity have changed as the healthcare industry continues to undergo significant changes. Today, CFOs must contend with factors such as: • Expansion of facilities and service lines across regions and states� • The varying and changing nature of accounting rules as regulatory frameworks evolve. • Emphasis on growing the business through both organic new ventures or by acquiring others. • Increasing inter-relationships and inter-company activities between entities within the parent company. The timelines for consolidation are compressing and are driven by factors such as: • Tighter reporting deadlines and the desire to improve the timeliness and transparency of reporting to stakeholders. • Transparency of information for industry and government regulators. • The need for a well-documented and well controlled consolidation process that preserves and enhances financial reporting integrity. Consolidations–grouping together all related organizations under a single parent company's control–is an essential requirement to create a single "operational" view of the entire organization. Whether it's a multi-practice clinic, a group of long-term-care providers, a network of hospitals, or a chain of imaging centers, stakeholders want and need to understand various lines and businesses, allocate capital and fund the organization. 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 centers, 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 optimize the tax profile or through strategically driven initiatives like mergers, and acquisitions.