Series: Steps to Ensure Provider Sustainability (COVID-19 be Damned)

This is the second installment of this series, where we explore ways to ensure sustainability of your company. In this second focus area of the series, we are going to focus on accounts payable and cash access.

Accounts payable

Given the current economic environment, now is the time to begin to focus on the terms you currently have with vendors. During this time you should be exploring opportunities to extend payment terms for leases, services, and contractor payments. This will allow you to maintain your cash for as long as possible, to allow cash flow become more in line with your account receivable and collection processes. Landlords and other key service vendors are in the midst of lease defaults and customers cancelling their agreements, therefore this is the time to utilize the current economic circumstances to renegotiate payment terms now and for the future.

“As uncertainty looms, it is important to shore up your cash position as much as possible………….”

Cash access

As uncertainty looms regarding how long the pandemic will last, when the world will return to “normal”, if there will be another round of quarantine and social distancing, it is important the ensure that your company has access to cash now. Providers should consider looking at accessing lines of credit, government loan and disaster programs such as the popular Economic Injury Disaster Loan, the Payroll Protection Program, the Provider Relief Fund, payroll tax deferment and other programs outlined in the CARES Act, and reach out to private pay customers, commercial payors and governmental payers to determine if there is an opportunity to expedite payment for services.

As uncertainty looms, it is important to shore up your cash position as much as possible to allow you to weather an even more intense economic crisis and these are just a few options that you should be exploring and implementing to ensure sustainability for your company.