By Tony Carita
Itâs critical for life science companies to âget it rightâ when it comes to clinical trial expense accruals, and yet the process remains a pervasive, industry-wide challenge.
Why is it so important? Clinical trials account for a major portion of a companyâs expenses overall, and accurate financial reporting is dependent on accurate expense accruals. In fact, auditors routinely scrutinize clinical trial expense accruals as a category thatâs prone to errors.
Why is it so difficult to manage? Clinical trials have become increasingly complex in size and scope. Just one clinical trial can encompass a number of providers and clinical sites â all with their own individual contracts â generating expenses tied to operational data that may be affected by protocol amendments, variable timelines and differing criteria for what constitutes âwork performed.â Now imagine trying to manage and report accruals â with accuracy and expediency â relying on information from providers whose pressing focus is trial execution, not mapping your expenses to statements of work to support accruals and forecasts.
Whatâs missing is a distinct function â clinical finance â which merges finance and operational expertise with intimate knowledge of how clinical trials are conducted and the impact on costs. In the absence of a qualified clinical finance specialist and efficient process, organizations often struggle to meet their financial reporting requirements and create reliable accruals and forecasts.
Danforthâs clinical finance specialists solve this challenge from the inside. They partner with a clientâs finance and clinical operations groups and apply frontline knowledge of the companyâs outsourced clinical development programs, contracts and budgets â acting as a dedicated liaison where a functional gap typically exists. They replace inefficient, manual processes for gathering data with a model-based system that can be customized and replicated for multiple studies. Most importantly, they bring insight and analysis to the often unpredictable nature of accounting for clinical trial progress â something that software solutions alone cannot deliver.
Enlisting this one specialized resource can close a costly chasm between finance and clinical operations, unburdening internal resources from trying to work outside of their domain expertise.
Interested to learn more? Click here for information about our Clinical Finance services.