Working Capital Policy

Alternative Working Capital Policy

Elijah Heart Center (EHC) is an organization that has the mind set to reach success, yet faces financial difficulties, just as any other business. The current situation indicates that the financial difficulties if not fixed can lead to the demise of the business. Many factors are going into the organization in terms of trying to reduce costs, make adjustments and at the same time, plan for expansion. These types of goals require intense work on what is the best way to reach the end result without affecting patient care. In actuality, EHC wants to provide exceptional care to be a leader amongst its peers. Aspects to be reviewed include: short-term financing, accounts receivable and inventory, risk and performance measures and implementation of a policy.

Short-term financing

It is necessary for EHC to obtain short-term financing to overcome the financial woes of the moment and to allow them to continue to provide and effective staff, obtain machinery and have a positive flow of income. The short-term financing options available to EHC include short-term loans that would allow the current financial dilemma to be solved while waiting for the additional Medicare payments, making changes to staffing and changing responsibilities of the current staff on board to help alleviate both burden and unnecessary salaries. A short-term loan with payments allowed as soon as the money is received from Medicare is the best option for EHC to both take care of the current need and avoid paying longer and higher interest over time.

Aside the loans, the idea of removing the contractors is a great option to save money spent on the excessively high salaries paid to said individuals. By removing the contractors, the facility can research and see where the staff was needed and not needed and work with their internal employees to staff or hire part time or full time but avoid the expense of contract employees. Along the same lines, is the...