11 Jan 2002
NEW YORK, NY—Tranquilmoney, a provider of an Internet-based platform for the management of receivables and management of related securitization deals, announced that it is accepting applications through February 28, 2002, for a free pilot of their retail Pharmacy Receivables Reconciliationprogram. “Our current clients switched from reconciliation programs from other vendors, and found their over-90-day receivable reduce dramatically,” said Karun Philip, Chairman and CEO of Tranquilmoney. “We would like other chains to see how effective we are and how our service pays for itself.”
Raj Palaniswamy, VP of operations at Tranquilmoney adds, “We are the only receivables management provider that promises to take responsibility for reducing unapplied cash to zero. This means more accuracy in the collections data, and greater ability to follow up with the third parties who have not paid.”
“Many chains have around 10% of their cash and receivables classified as ‘unapplied’ due to reconciliation problems. Our value proposition is simple—reduce unapplied cash to zero, and you will have the correct information you need to increase recoveries to 100%,” says Bert Lee, VP of Business Development for Tranquilmoney. “Industry studies show the average pharmacy is losing about 2% of revenues due to errors in reconciliation. Our services pay for themselves even if a fraction of that is recovered, and our data shows that not more than 0.5% is truly un-collectable.” Receivables management represents the first phase of Tranquilmoney’s targeted relationship with the healthcare industry. The second phase will lead to the online securitization of the third-party receivables of retail pharmacy chains and other healthcare providers. Harpal Maini, President of Tranquilmoney adds, “By selling the receivables asset off the books as an asset-backed security, a retail chain can access additional capital for long term projects at a reasonable cost of money. Securitization therefore brings a whole new financing option to the healthcare industry as long as the data can be managed in a timely and accurate manner by an independent third party.”
The potential of the largely untapped healthcare securitization market has been conservatively estimated at between $400 billion and $800 billion. To date the high marginal utility and labor costs associated with the accurate processing of healthcare receivables has made it difficult for healthcare organizations to garner any benefits from the sale of these short-term securities. Through customized information technology, Tranquilmoney can fully automate the account reconciliation and receivables management process. As a result, financial institutions can work with healthcare organizations easily and efficiently to pool small-ticket receivables, transforming them into viable instruments for the securities markets.
“Healthcare and retail pharmacy companies can greatly improve cash flow through the sale of their receivables on the secondary securities markets, while simultaneously reducing internal costs of reconciliation and increasing recovery of receivables using Tranquilmoney,” said Harpal Maini, President of Tranquilmoney and former bond trader in Deutsche Bank’s Asset Securitization Group.
Tranquilmoney was founded in April 2001 with a purchase of assets from Imagine Technologies, Inc., a Boston-based company that has provided back office services for retail pharmacy securitization for three years, servicing customers including Condor Corporation, McKesson, Costco, and others. In 1998, the company was called in by the courts to clean up the mess of data at the Pharmacy Fund, which went bankrupt in 1998 due to inadequate receivables management technology. Tranquilmoney’s patent-pending Cortex™ platform is being applied in partnership with major investment banks to other asset classes including general health receivables and more traditional asset-backed securities like equipment leases, credit card receivables, etc.