2846.D东莞出口企业应收账款问题的探讨 外文1

1、avoiding potential problems when selling accounts receivable - accounts receivable financinghealthcare financial management,may,1996 by donald hayers, timothy.kincaidpatient accounts managementaccounts receivable financing is a potential tool for managing a provider organization's working capita

2、l needs. but before entering into a financing agreement, organizations need to consider and take steps to avoid serious problems that can arise from participation in an accounts receivable financing program.for example, the purchaser may cease purchasing the receivables, leaving the organization wit

3、hout funding needed for operations. or, the financing program may be inordinately complex and unnecessarily costly to the organization. sometimes the organization itself may fail to comply with the terms of the agreement under which the accounts receivable were sold, thus necessitating that restitut

4、ion be made to the purchaser or provoking charges of fraud.these potential problems should be addressed as early as possible - before an organization enters into an accounts receivable financing program - in order to minimize time, effort, and expense and maximize the benefits of the financing agree

5、ment.prior to the late 1980s, accounts receivable purchase programs were of limited use and availability to provider organizations because retrospective reimbursement practices dominated the healthcare industry. accounts receivable financing programs began to appear when prospective reimbursement po

6、licies forced provider organizations to become more adept at managing their financial resources. the drive toward managed care only has accelerated the need for creative financing mechanisms to improve cash flow as well as fund asset acquisitions and joint ventures.the growth of accounts receivable

7、purchase programs initially was slow, in part because executives believed the sale of accounts receivable would be perceived as a sign of financial weakness in their organizations, and in part because this type of financing mechanism was not well understood in the industry. since 1990, however, ther

8、e has been a market for accounts receivable purchase programs among healthcare providers that recognize the need for a vehicle for improving cash flow. an increasing number of nursing homes, home health care providers, psychiatric/alcohol and substance abuse facilities, and acute care hospitals are

9、entering into receivables purchasing programs.benefits for providersthe objective of an accounts receivable purchase program is to provide immediate funds to healthcare providers so they do not have to wait to obtain capital until receivables are collected. the resulting acceleration of cash flow al

10、lows the provider to reduce payables, prepay accounts to obtain discounts, or pay off tax liens and other debts that threaten the financial stability of the business. it also improves the balance sheet. with a properly structured sale of accounts receivable, a provider can remove from its balance sh

11、eet the receivables that have been sold and substitute cash without recording any significant liability other than the liabilities that may arise as a result of failure to comply with the terms of the sale agreement.(a) in addition, accelerated cash flow provides a source of funds from which the sel

12、ler can make acquisitions of other businesses, real estate, or equipment.the availability of this type of financing also is important to providers because it provides funds when existing covenants restrict additional funded debt or when other sources of financing are unavailable because of the organ

13、ization's poor financial condition. the financial condition of a provider organization is significantly less important to a purchaser of receivables than it is to a lender. unlike a loan from a lender that is secured by accounts receivable, the purchase of receivables insulates the purchaser fro

14、m a provider's bankruptcy. for example, accounts receivable that have been sold are not part of a provider's bankruptcy estate. the purchaser therefore does not have to adhere to the automatic stay that is imposed by bankruptcy laws. the purchaser also is not subject to the loss of any overc

15、ollateralization that may have been structured into the financing program.program structureaccounts receivable purchase programs differ in complexity and cost; however, from the perspective of the healthcare provider, their basic structure is fairly standard. under a purchase program, a provider org

16、anization sells its accounts receivable to an entity that has been established for the sole purpose of purchasing the receivables. usually, the purchasing entity is controlled by the bank or firm that sponsors the program, and the entity funds purchases by using the receivables as collateral for loa

17、ns or investments from third parties or from an affiliated company. the purchasing entity on occasion may be controlled by the healthcare provider. in such circumstances, the entity obtains funds for the purchase of receivables through loans made by the program sponsor.typically, as a result of the

18、sale of accounts receivable, a provider receives a sum ranging from 50 percent to more than 80 percent of the expected value of the receivables upon closing of the sale. all or a portion of the remaining expected value of the receivables is handled in one of four ways: as a (1) deposit in a reserve

19、account that is controlled by the purchaser; (2) subordinated participation interest in the receivables that now are owned by the purchaser; (3) secured or unsecured claim against the amount that is to be collected by the purchaser; or (4) a combination of these options. in programs utilizing reserv

20、e account deposits, the amount received by the seller at closing plus the amounts that are deposited generally are equal to 97 percent or more of the expected value of the receivables.any amounts in excess of the expected value of the accounts receivable that are collected by the purchaser are treat

21、ed in the same ways. these amounts are paid to the seller upon collection; the sums are reduced by program costs and other factors related to the terms of the particular program.purchasers of accounts receivable require providers to assure, through representations and warranties, that the receivable

22、s are collectible and to repurchase, replace, or pay for losses sustained when a receivable is not collectible. purchasers nevertheless stop short of requiring providers to guarantee that the receivables will be collected. a guarantee raises questions as to whether the transaction is a purchase and

23、sale or simply a loan that is secured by the receivables.from the standpoint of the purchaser, it is important for the transaction to be treated as a purchase and sale (and not as a loan to the provider that is secured by the receivables) in order to assure that the bankruptcy of the provider does n

24、ot interfere with the purchaser's rights to the funds collected. such assurance may be more theoretical than practical, however, when collections are delayed in a bankruptcy pending a ruling by the court as to whether the transaction is indeed a "true sale."potential pitfallsalthough a

25、ccounts receivable purchase programs offer benefits to the seller, they pose risks to both the seller and the purchaser. the financial effect of these risks to providers may be substantive when the purchaser stops buying accounts receivable, the purchase program is too complex and costly, the provid

26、er terminates participation in a program too precipitously, or the provider fails to comply with the requirements of purchase.cessation of purchasing. the proceeds from a sale of accounts receivable usually are used by the seller for designated purposes within a relatively short period of time. coll

27、ection of a purchased receivable may provide some additional funds for the seller, but those funds are subject to reduction for offsets, fees, and other charges imposed by the purchaser and usually are insufficient to provide for the daily cash needs of the business.accordingly, the seller generally

28、 needs to continue selling accounts receivable to support its ongoing working capital needs. in recognition of this need, the purchaser customarily provides some assurance that it will continue to purchase the seller's receivables.the purchaser will cause the provider to suffer considerable fina

29、ncial strain if it does not purchase receivables on a regular basis. the purchaser nevertheless may stop purchasing receivables for several reasons. one reason is to compel the seller to comply with the terms of the sale agreement. a purchaser may stop buying receivables, for example, if the seller

30、fails to send required financial statements after repeated warnings. a purchaser also may suspend purchases if the seller does not deliver funds received from payers on receivables that have been acquired by the purchaser. failure to deliver funds has criminal implications. sellers of accounts recei

31、vable can avoid this problem by recognizing the importance of complying with the obligations that have been imposed on them under the terms of the sale of the receivables.another reason a purchaser may suspend purchases is if a lien is placed on a seller's accounts receivable by a third party, s

32、uch as the internal revenue service. if the purchase of accounts receivable occurs 45 days or more after a lien is filed, the sale is subject to the lien. the only remedy for purchasers that do not wish to assume such risk is to stop purchasing receivables until the problem is resolved.while they ar

33、e participating in an accounts receivable purchase program, provider organizations consequently need to be especially cautious of the possible imposition of a lien. they should pay outstanding debts or act to remove the lien as soon as possible. providers also may ask lienholders to subordinate thei

34、r liens to the interest of the purchaser. this type of arrangement may be acceptable if the purchaser agrees to pay a portion of the sale price for the receivables directly to the lienholder until the lien is discharged. lienholders are more apt to agree to subordinate their liens if they are convin

35、ced they will not collect the full amount they are owed in the event the provider declares bankruptcy due to filing of the lien.yet another reason a purchaser may stop buying a seller's accounts receivable is because it has depleted its financial resources or cannot continue borrowing funds from

36、 a third party to fund the purchases. purchasers that rely entirely on a single outside source of capital are particularly susceptible to restrictions on the availability of additional or ongoing funding imposed by the third-party lender. to ensure a steady stream of purchases, providers should cond

37、uct due diligence before they agree to participate in an accounts receivable financing program with a particular purchaser. sellers should be cognizant of the purchaser's source of funding, the stability and commitment of the funding source, as well as the track record and reputation of the purc

38、hasing entity.program complexity. accounts receivable purchase programs may be difficult to understand and administer, particularly by provider organizations that are unfamiliar with the operation of such programs. closing documents often are lengthy and complicated. operational difficulties may ari

39、se with regard to the way in which breaches of representations and warranties concerning the collectibility of receivables are handled. for example, is notice of a breach of representation or warranty given to the provider organization, and if so, when and how is the provider organization required t

40、o respond? must receivables that breach representations or warranties be repurchased, and if so, what is the procedure for doing so?further problems may arise from the way in which posting errors are handled, payments are processed upon collection, and funds are returned to the seller. additional co

41、mplexities may be created when the purchaser contracts with a third party to handle the servicing of the purchased receivables.another problem is the tendency of some purchasers to understate the complexity of their programs in their marketing efforts or to quote "best case" terms that are

42、 seldom, if ever, implemented. as a result, providers may come to the closing table with unrealistic expectations.such problems can be minimized if sellers understand fully all aspects of the program and develop strong communication links with purchasers prior to the commencement of the program. the

43、 seller's legal counsel should ensure that all closing opinions and other documentation requirements are clear and fully understood by the seller. the seller's representative who negotiates the terms of the purchase should be familiar with all the terms of the contract. he or she also should

44、 continue to pursue alternative financing arrangements until the closing occurs on acceptable terms.communication links between the provider and the seller should exist both at the operational and at the managerial levels in order to assure that maximum operational efficiencies are obtained. some pu

45、rchasers offer hands-on training sessions so that the seller's operational staff can learn how to handle the complexities and nuances of their purchase programs. however, other purchasers rely on third parties to service the purchased receivables. additional time and attention needs to be devote

46、d to maintaining proper communication links between these purchasers and sellers.voluntary termination. sellers may wish to terminate their participation in an accounts receivable purchase program for a variety of reasons. for example, a seller may no longer wish to sell accounts receivable because

47、its financial condition has improved and, as a result other, more attractive financing has become available. or, because of a change in top management, the seller may decide it no longer wants to pursue the sale of accounts receivable. or, the seller may terminate because a particular sale and purch

48、ase program may not have functioned as anticipated.however, several factors restrict the ability of sellers to terminate their participation in an accounts receivable purchase program. one of the most important is fundamental economics. a seller that is contemplating withdrawal from an accounts rece

49、ivable purchase program needs to ensure that it will have sufficient funds to meet its working capital needs. these funds must come from a source other than accounts receivables because collections on receivables belong to the purchaser and collections from newly generated receivables will not be im

50、mediately forthcoming. additional sources of working capital will have to be identified to cover current operating expenses.a seller may have difficulty meeting the requirements for new financing to bridge this gap, however. in particular, if the new financing source requires a first lien on account

51、s receivable, the prior interest of the original purchaser must be released. in order for this to occur, the original purchaser must be repaid in full for all amounts that are due on previously purchased receivables, including those that must be repurchased by the seller because representations or w

52、arranties have been breached. the purchaser must retain its security interest in the receivables until payment is received in full because it typically has no other source from which to recoup the amounts it has paid out (including costs and expenses).communication links between the provider and the

53、 seller should exist both at the operational and at the managerial levels in order to assure that maximum operational efficiencies are obtained. some purchasers offer hands-on training sessions so that the seller's operational staff can learn how to handle the complexities and nuances of their p

54、urchase programs. however, other purchasers rely on third parties to service the purchased receivables. additional time and attention needs to be devoted to maintaining proper communication links between these purchasers and sellers.voluntary termination. sellers may wish to terminate their particip

55、ation in an accounts receivable purchase program for a variety of reasons. for example, a seller may no longer wish to sell accounts receivable because its financial condition has improved and, as a result other, more attractive financing has become available. or, because of a change in top manageme

56、nt, the seller may decide it no longer wants to pursue the sale of accounts receivable. or, the seller may terminate because a particular sale and purchase program may not have functioned as anticipated.however, several factors restrict the ability of sellers to terminate their participation in an a

57、ccounts receivable purchase program. one of the most important is fundamental economics. a seller that is contemplating withdrawal from an accounts receivable purchase program needs to ensure that it will have sufficient funds to meet its working capital needs. these funds must come from a source ot

58、her than accounts receivables because collections on receivables belong to the purchaser and collections from newly generated receivables will not be immediately forthcoming. additional sources of working capital will have to be identified to cover current operating expenses.a seller may have diffic

59、ulty meeting the requirements for new financing to bridge this gap, however. in particular, if the new financing source requires a first lien on accounts receivable, the prior interest of the original purchaser must be released. in order for this to occur, the original purchaser must be repaid in fu

60、ll for all amounts that are due on previously purchased receivables, including those that must be repurchased by the seller because representations or warranties have been breached. the purchaser must retain its security interest in the receivables until payment is received in full because it typica