CASE STUDY

Introduction
A rapidly growing Health-Tech Startup in the home healthcare industry sought to streamline its financial operations to support its expanding service offerings across multiple states. With a mission to improve the quality of life for patients and caregivers, the company needed a robust financial infrastructure to manage complex billing cycles, multi-state compliance, and payroll processes efficiently.
Global Finance Teams (GFT) partnered with the company to design and implement comprehensive financial systems that ensured accurate reporting, operational efficiency, tax optimization, and compliance with ASC 606.
Challenges
The Health-Tech Startup faced the following key challenges:
Complex revenue recognition processes due to multi-state operations and Medicaid reimbursements.
Inefficient accounts payable (AP) workflows leading to delayed vendor payments.
Manual reconciliation of payroll data and financial transactions, increasing the risk of errors.
Fragmented financial data due to the use of multiple systems.
High tax liabilities due to overhead costs concentrated in high-tax jurisdictions, such as California.
A need for investor-ready financial reports to secure Series B funding.
Solutions Provided by Global Finance Teams (GFT)
1. Financial Organization and Reporting: GFT developed a structured finance organization to optimize financial operations, including:
Establishing roles such as Head of Finance, Assistant Controller, and Revenue Manager to strengthen financial oversight.
Implementing QuickBooks Online to manage general ledger data across multiple entities, ensuring accurate and consolidated reporting through Joiin.
Aligning revenue recognition processes with ASC 606, ensuring compliance and accurate revenue reporting for home healthcare services.
2. Revenue Cycle Management: To address revenue recognition challenges, GFT enhanced the company’s revenue cycle by:
Implementing an automated system that tracked billable CNA (Certified Nursing Assistant) hours and ensured revenue was recognized in alignment with documented service delivery.
Developing a robust claims management workflow to track Medicaid submissions and manage denials, ensuring adjustments were made based on historical data and expected recoveries.

3. Accounts Payable Transformation: GFT improved the accounts payable (AP) process by:
Streamlining vendor onboarding with a verification process that included W-9 forms, payment method preferences, and validation of banking information.
Automating invoice approval through Slack integrations and utilizing Ramp for payment scheduling and execution, improving payment accuracy and efficiency.
Implementing weekly AP aging reports to monitor outstanding invoices and prioritize vendor payments.

4. Payroll and Benefits System Overhaul: GFT revamped the payroll system by integrating clinical operations with payroll processing:
Ensured CNA hours were accurately recorded in AbbyOS and transferred seamlessly to Rippling for payroll processing.
Implemented a review and escalation process involving Registered Nurses (RNs) to address discrepancies in logged hours before payroll finalization.
Enabled timely payroll disbursements and tax compliance by mapping payroll data to the general ledger and uploading it to QuickBooks for financial reconciliation.

5. Financial Tech Stack Integration: To unify financial operations, GFT integrated the following systems:
Rippling for payroll and HR operations.
Ramp for corporate expense management and credit card transaction tracking.
Mercury for operational banking disbursements.
QuickBooks Online for 10 entities to hold the general ledger data.
Joiin for consolidated financial reporting across entities.
AbbyOS as the primary platform for tracking clinical services and payroll hours.
Snowflake for data warehousing and analytics.
Excel PowerQuery to automate data formatting and acting as an intermediary for uploading data from one app to another.
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6. Transfer Pricing for State Tax Optimization: To address the company’s high tax liabilities in California, GFT implemented a strategic transfer pricing framework:
Allocated overhead costs, such as IT, legal, and management services, from the California headquarters to affiliate entities operating in states with lower tax rates.
Used the Comparable Profits Method (CPM) to determine an arm’s-length markup on the allocated costs, ensuring regulatory compliance.
Ensured the allocated costs reflected the actual value provided to affiliates, aligning with IRS guidelines and minimizing the risk of audit issues.
By redistributing overhead expenses, the company reduced taxable income in California and optimized its overall tax position across all jurisdictions.
7. Investor-Ready Financial Reporting: Recognizing the company’s strategic goal of securing Series B funding, GFT:
Prepared comprehensive, board-ready financial statements that highlighted key performance metrics, operational efficiency, and revenue growth trends.
Created detailed financial models and projections to showcase the company’s scalability and profitability potential to investors.
Ensured that the financial reports aligned with GAAP and presented a clear, data-backed narrative that inspired investor confidence.
Results
Secured $35M Series B Funding: The investor-ready financial package played a crucial role in helping the company raise $35 million in Series B funding.
Increased Efficiency: The automation of key processes, such as invoice approvals and payroll reconciliation, reduced manual work and processing times.
Improved Compliance: Aligning with ASC 606 ensured accurate revenue recognition and reduced the risk of non-compliance with GAAP standards.
Enhanced Financial Transparency: Consolidated reporting across multiple entities provided leadership with a clear, real-time financial overview.
Reduced Tax Liabilities: By reallocating overhead costs through the transfer pricing strategy, the company significantly reduced its state tax burden.
Reduced Vendor Payment Delays: Streamlined AP processes improved vendor relationships by ensuring timely and accurate payments.
Conclusion
Through its partnership with Global Finance Teams, the Health-Tech Startup achieved a scalable and compliant financial infrastructure capable of supporting its growth and operational goals. By implementing a robust transfer pricing framework and optimizing financial reporting processes, the company not only secured $35 million in Series B funding but also significantly reduced its tax liabilities—empowering it to focus on its mission of delivering exceptional care while maximizing profitability.
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