Clinical trial financial accruals require close coordination between clinical operations and finance departments. Unfortunately, many organizations suffer from misaligned processes, unclear roles, and inconsistent reporting.
Why the Disconnect Around Clinical Trial Financial Accruals Exists
Clinical and finance teams often work with different goals in mind. Clinical staff prioritize patient recruitment, site performance, and trial timelines. Finance teams, on the other hand, are focused on budget accuracy, cash flow, and monthly close deadlines.
This misalignment creates situations where:
- Clinical teams don’t report activities on time, leading to under-accrual.
- Finance teams request cost estimates without understanding how studies are operationalized.
- No one takes ownership of reconciling trial progress with financial reports.
When both clinical and finance teams understand the goals of clinical trial financial accruals, collaboration becomes more effective.
Consequences of Poor Collaboration
Inaccurate Financial Reporting: Without timely and accurate input from clinical teams, finance departments may guess, or delay, their accruals, affecting external audits or investor confidence.
Budget Overruns: Lack of transparency can cause clinical programs to exceed budgets before leadership realizes there’s a problem.
Operational Bottlenecks: Time wasted on chasing down data or correcting accrual errors takes valuable attention away from study execution.
Strategies to Strengthen Cross-Functional Collaboration
Establish Shared Language and Goals: Develop a basic financial literacy program for clinical teams and help finance staff understand how trials progress. Align on key metrics that matter to both sides, such as cost-per-visit or site activation timelines.
Hold Regular Joint Planning Sessions: Don’t wait until a problem arises. Schedule recurring meetings where clinical and finance leads review trial milestones, spending to date, and accrual estimates.
Use Integrated Systems and Tools: Centralized clinical trial management systems (CTMS) that feed into finance systems can reduce manual reporting errors and create a single source of truth.
Define Roles and Responsibilities: Clearly outline who is responsible for reporting site activity, updating vendor timelines, and submitting forecasts. Remove the guesswork from collaboration.
Document Accrual Assumptions: Create audit trails and documentation for how accruals were estimated. This provides transparency and allows for better review in future months or trials.
The Result?
Proactive collaboration around clinical trial financial accruals leads to more accurate budgets, greater cross-functional trust, and improved trial efficiency. Looking to bridge the gap between clinical and finance teams? Danforth Advisors provides fractional finance support tailored to biotech and life science companies. We help teams align around accruals, budgeting, and forecasting for greater operational efficiency. Contact us today.