Clinical Trials Revenue Cycle

Client Situation

A top-ten rated pediatric hospital was unable to determine profitability / loss from clinical research activities overall and / or on an individual contract basis. Further, an internal review of recent activity revealed a significant number of commercially-sponsored projects with large deficits at account close-out. McAllister Consulting was called upon to conduct an assessment of accounting practices, procedures and internal controls.

Core Competency: Accounting / Finance, Research Operations & Strategy Development

Consulting Objectives:

• Assess the impact of various operational and financial activities on the client’s profitability from the research enterprise.
• Develop and implement a strategy for the client that will allow it to achieve an advantage in the midst of a rapidly changing competitive environment.

Approach:

• Conduct financial analyses of all fund accounting reports to determine trends in revenue, cost and expense categories.
• Reengineer the current budget and forecast methodologies to ensure all variable and fixed costs are captured prior to executing the contract.
• Create accounting practices and procedures to accrue revenues and expenses based on actual enrollment.
• Develop and implement a system of internal controls and periodic monitoring procedures for all commercially-sponsored research accounts.

Outcomes:

• A system of investigator accountability was established and deficits were virtually eliminated across all ongoing research accounts.
• New research projects are generating 19% to 22% net income.

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