Client Overview

This healthcare and diagnostic services provider had established itself as a dependable service provider when we collaborated with them, but operational bottlenecks were being caused by financial inefficiencies:

  • Annual revenue of ₹20 Crores
  • Network includes four diagnostic facilities providing a variety of imaging and medical testing
  • Team of more than 120 workers, including technicians, medical personnel, and administrative staff
  • Solid connections with insurance companies and corporate clients

While patient volumes were growing, operational and financial systems were unable to keep up with scaling demand.

The Challenge

The company faced serious cash flow problems due to delayed payments from insurance providers and corporate clients. Payroll and operating expenses were due on a weekly basis, but claims frequently took 60 to 90 days to settle, resulting in an imbalance between inflows and outflows.

Cost allocation for the different services provided was lacking. Because revenue from basic tests, high-end imaging, and bundled packages was not tracked independently, it was unclear how profitable each service type was. Because of this, pricing decisions were made without data, which caused some high-demand tests to lose profit.

Additionally, the corporation experienced irregular GST reporting. The GST payments from insurance providers were delayed, and the company was unable to reconcile input tax credits effectively, resulting to missed possibilities for tax savings and compliance issues.

The Solution

At Sharda Associates, we addressed the key issues by:

  • Tracking profitability by test type, imaging service, and packaged offerings using service-wise costing models
  • To cut down on delays and simplify receivables, computerized invoicing for insurance claims and follow-up procedures was used.
  • created a rolling cash-flow estimate to balance projected incoming payments from corporate and insurance clients with operational outflows.
  • Simplified GST reconciliation procedures and put in place mechanisms to guarantee prompt input tax credit use and refund claims

We also worked with the client on pricing strategies, ensuring higher-margin services were priced more accurately and optimized for profitability.

The Impact

  • Cash flow improved by 30% through faster invoicing and better receivables management
  • Margins improved by 18% due to accurate costing and optimized pricing strategies
  • GST refunds processed 40% faster, boosting working capital
  • Decision-making speed improved by 25% with better visibility into costs and revenue

Conclusion

We assisted the healthcare and diagnostic provider in scaling operations profitably and efficiently by simplifying invoicing, cost allocation, and cash flow management. They now have the financial certainty to confidently plan and grow thanks to our strategic actions.

Sharda Associates’ virtual CFO services can help you regain control and promote long-term, sustainable growth if your healthcare or diagnostic services company is experiencing problems with cash flow, compliance, or margin erosion.