Healthcare News & Insights

5 symptoms your hospital accounts payable process needs a check-up

In a hospital, it’s common sense that providing top-quality medical care for patients is the No. 1 priority. However, the intricate workings of a hospital include many other aspects, like accounts payable (AP). These people are being asked to reduce cost and increase efficiency. In this guest post, Jessica Moran, general manager of a business payment automation company, tells you what to look for to figure out if your AP needs updating.

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Healthcare organizations provide an invaluable service to society. Whether a patient enters the doors of a facility because of an emergency, a planned procedure or regular preventive care, they’re receiving needed help at the hands of caring professionals.

For the organizations themselves, providing that care is just the tip of the iceberg. There’s so much more that goes on beneath the surface to make providing that care possible. Take the healthcare supply chain as an example: from state-of-the-art diagnostic machines to the hand sanitizer stations ever-present in a facility, healthcare organizations rely on an extremely complex network of suppliers to ensure they’re well-prepared for any scenario. Maintaining strong and reliable relationships with those suppliers is critical, starting with paying them on their terms and in their preferred method.

Add that to an environment where essential back office functions like AP are constantly being pressured to reduce costs and increase efficiencies, all while remaining compliant with ever-shifting regulations and protecting the organization against fraud exposure, it can be a difficult balancing act for any healthcare administrator to manager.

If your AP department is experiencing any of the following pain points, it may be time to make some changes:

  • AP staff processes so many checks that paper cuts are a problem
  • Value-add strategic projects are neglected due to time-consuming data entry
  • Suppliers clog phone lines with requests for overdue and missing payments
  • AP administrators are losing sleep over payment fraud and cyber attack risks, and/or
  • AP is missing out on opportunities to monetize spend with cash rebates.

If these sound familiar, the good news is that all of these symptoms can be remedied with the right technology partner and integrated payables solution.

Cut down on paper

Approximately half of healthcare organizations are still making most of their payments by check, even though paper-based payments are labor intensive and inefficient. AP employees in this type of scenario spend most of their time processing stacks of paper – printing, stuffing and posting for delivery. In addition to time and cost, the manual-based processes are inherently prone to errors, delays and fraud.

An integrated payables AP payment process eliminates the need for paper, printing and postage supplies which allows your organization to realize significant cost savings almost immediately. Plus, when payments are made electronically, you have the flexibility of paying with an automated clearing house (ACH) or a card depending on what the supplier prefers.

Give suppliers payment clarity

When most of your payments are made with paper checks, suppliers are left in the dark as to the status of their outstanding invoices. The use of paper-based payment systems means the knowledge of payment status resides solely with the AP department, leaving talented staff to spend hours fielding calls from anxious suppliers, in turn taking up more of their time.

The right integrated payables solution will have a built-in dashboard for suppliers that gives them visibility into payments wherever they’re in the payment cycle and provides detailed remittance in the format suppliers prefer (such as corporate trade exchange [CTX], a custom accounts receivable file or email), which speeds cash application on their end.

Protect against fraud

Did you know that 77% of organizations that experienced payment fraud were targeted through paper check transactions?  Many electronic payment platforms include sophisticated security monitoring technology that proactively identifies threats and stops fraudsters from intercepting and rerouting funds, significantly reducing the risk of fraud. Look for a solution that also verifies and maintains your suppliers’ bank information and securely stores the data, so you do not have to.

Make payments more quickly

Late payments to your suppliers not only put unnecessary stress on those relationships and penalize your organization with late payment fees, they also cause a lost opportunity to cash in on early pay discounts – often a sizable cost-savings opportunity. With the right payment partner, you’re also able to earn cash rebates on AP spend, which can turn your department into a profit center.

An integrated payables approach makes it possible for healthcare organizations to transform their AP department into a streamlined, cost-effective function, healing many of the common AP pain points they face including unnecessary expenses, process inefficiencies and exposure to fraud risk, all while generating rebates on AP spend.

If your healthcare organization is experiencing any of these symptoms, it’s probably time to reexamine your accounts payable processes and treat the underlying cause. Finding a holistic approach to integrated payables is the best way to move your organization’s AP function forward, and ultimately support the entire organization’s success.

Jessica Moran is general manager of Paymode-X Business Solutions at Bottomline Technologies.

 

 

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