Corporate governance is a set of practices and controls whose objective is to have a transparent and equitable administration aligned with the interests of its shareholders, having as a premise to prevent conflicts of interest and possible abuses, as well as the impairment of its investors’ equity.
Revenue cycle management is a technique for processing payments, collections, and sales on a large scale. This perspective differs from other corporate governance styles because of its holistic approach; an analysis is performed, and strategies have been developed that span the entire payment cycle, from customer capture to final payments. The ultimate goal is increased profits and more excellent reliability.
A revenue cycle starts from the moment the product is finished and in the warehouse. For it is at this point that it truly becomes a tradable asset.
It is also possible to argue that the revenue cycle can start much earlier when it comes to production to order or when merchandise is traded.
In the latter two cases, the revenue cycle begins when the order is received, regardless of where the product is in the process. In the case of trading with third-party products, the cycle starts at the moment of purchase.
The cycle can be closed quickly since it ends when the product or lot is paid in full and the sale is recorded in the accounting records.
The revenue cycle is the vehicle to guarantee the stability of a business or company in terms of financial liquidity. However, we know that there are fixed and variable costs and expenses; therefore, it is necessary to be clear about the cycle that the income will follow to not fail with the responsibilities in payments of any kind.
The scope is the main differentiating factor between revenue cycle management and other similar techniques. Because it does not divide business procedures into production cycles and sales cycles, the holistic view of revenue cycle management is more readily applicable to certain industry types.
Revenue cycles should be calculable based on the sales dynamics established by the company. That is, whether you sell on a pay-as-you-go, credit, or installment basis and if in installments, how much each installment is and the value of each payment. This makes the revenue cycle predictable and allows for better strategic planning at the production and financial levels concerning margins on sales totals.
Payment delays by a buyer can create financial uncertainty in terms of revenue cycles. This is especially true for small and medium-sized companies.
Various solutions lead to business efficiencies and offer tangible benefits, such as outsourcing billing functions to avoid the high cost of on-site billing. The key to achieving robustness in the revenue cycle is to keep denial rates low and collection rates consistently high. A holistic approach to revenue cycle management better addresses the regulatory and financial pressures providers are experiencing by ensuring comprehensive automation of claims handling. The latest tools for healthcare revenue cycles, such as remittance processing solutions, are designed to maximize revenue capture and restructure the billing and collection process with electronic claims management, direct Medicare claims entry, automated secondary billing, electronic remittance posting, and document image retrieval for searches and dispute resolutions along with contract and denial management.