Accounts Receivable and Allowance for Uncollectible Accounts

9 Months Ended

Sep. 30, 2011

Accounts Receivable and Allowance for Uncollectible Accounts [Abstract]

Accounts Receivable and Allowance for Uncollectible Accounts

ACCOUNTS RECEIVABLE AND ALLOWANCE FOR UNCOLLECTIBLE ACCOUNTS

Base fees and incentive payments are billed to customers quarterly. Base fees received prior to when services are delivered are classified as deferred revenue.

The Company assesses its customers’ creditworthiness as a part of its customer acceptance process. The Company maintains an estimated allowance for doubtful accounts to reduce its gross accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, its assessment of each customer’s ability to pay, the length of time a balance has been outstanding and the status of any ongoing communications with each applicable customer.

The Company performs quarterly reviews and analyses of each customer’s outstanding balance and assesses, on an account-by-account basis, whether the allowance for doubtful accounts needs to be adjusted based on currently available evidence such as historical collection experience, current economic trends, past due status and changes in customer payment terms. The Company considers a receivable to be impaired when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the agreement. In accordance with the Company’s policy, if collection efforts have been pursued and all avenues for collections exhausted, accounts receivable would be written off as uncollectible.

Activity in the allowance for doubtful accounts is as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2011			2010		2011			2010
Balance at Beginning of Period	$	1,746		$	82	$	1,582		$	82
Charges	281			—		524			—
Deductions	(193		)	—		(272		)	—
Balance at End of Period	$	1,834		$	82	$	1,834		$	82

In July, 2011 the Company notified one of its customers that it was exercising its dispute resolution rights due to, among other matters, the customer's delay in paying outstanding accounts receivable. In October, 2011 the parties came to an agreement to resolve the matter with respect to the outstanding accounts receivable. As a result of this agreement, no allowance for uncollectible accounts at September 30, 2011 was recorded. Per the agreement, the Company expects full payment of the outstanding accounts receivable in the fourth quarter of 2011.