By Bill Wardwell
It’s expected that healthcare organizations will be there to take care of us when we’re at our most vulnerable, and that the care will be high quality, timely, and efficiently administered. Patients rarely realize that this type of care is only made possible by huge, complex engines that manage all of complicated logistics to running a healthcare organization. Take Accounts Payable as an example.
Consider all of the diverse supplies and services needed to keep a healthcare organization up and running smoothly – from the most minute supplies like cotton swabs and rubber gloves to imaging equipment to medications to cleaning and disposal services. Keeping those suppliers paid and paid on time is critical to maintaining a smooth operation, but it’s not necessarily easy to manage.
Broadly, some of the biggest payments challenges healthcare organizations face include:
- Managing large, varied vendor populations with unique payment demands
- Mergers and acquisitions that increase paper invoice volumes and come with disparate back-office systems and processes
- Meeting vendor requirements for detailed electronic remittance delivery
As healthcare organization AP departments struggle to overcome these challenges, they are also being pressured to increase efficiencies while protecting themselves from payment fraud.
So what can healthcare AP departments do in 2020 to meet all of the demands placed on them both internally and externally? One of the best courses of action healthcare organizations can take to alleviate their payment pain points is to implement an Accounts Payable automation solution, one that helps to make progress on every issue an AP department can deal with.
According to Paystream Advisors, nearly half of health system invoices are still being paid by paper checks. The process of paying with paper checks is cumbersome, difficult to track, and prone to fraud. The move to an automated payment process would make a big impact on the efficiency and consolidation of healthcare AP departments.
At first glance moving to an AP automation solution, while a logical next step, can be intimidating. That’s why it’s so critical to find a partner who has implemented automation for healthcare organizations in the past, because that experience is necessary to getting it right.
An experienced partner will enable an AP department to seamlessly transition from a paper-based process to an electronic one, leveraging your existing accounting systems and banking relationships to consolidate disparate invoice approval and payment across multiple departments and locations. Given how complex AP can be, that experience is one of the most important variables you ought to consider before moving ahead with any solution.
In addition, automating key AP functions can benefit your relationships with suppliers. Vendors appreciate being paid in a timely fashion and having access to enhanced remittance data they may not have access to today, including CTX and custom AR files. That kind of flexibility and detail allows your suppliers to more easily match payments to invoices and apply cash as soon as it’s received, which can’t hurt your reputation with that supplier’s AR department.
An AP automation solution also helps solve for the difficulties the ever-present possibility of mergers and acquisitions can present. Today’s cloud-based solutions can be easily accessed by AP and management users across multiple locations, creating centralized visibility and control despite multiple systems, locations, and payment methods. This provides a simple, flexible way to manage the integration of new processes brought in when those mergers and acquisitions do happen.
Last but certainly not least, an automated and easily auditable invoice-to-pay process can greatly reduce your organization’s fraud risk. AFP reports that nearly 80% of organizations experienced fraud in the last year alone. Some AP automation solution providers take the security benefits of sheer automation a step further, and include user behavior monitoring, payment risk scoring, and vendor bank account validation to help organizations minimize the risk of payment fraud that may result from Business Email Compromise (BEC) or social engineering attacks. When patient and financial data is at risk—and with increasingly sophisticated fraud being a part of life in healthcare, it is—this level of protection is truly necessary.
Manual to automated AP processes will go a long way to help healthcare organizations overcome their biggest challenges in 2020. With the right partner and the right processes in place, accounts payable can be at the forefront of a digital transformation that will take healthcare into a new era of efficiency, security, and flexibility.
Bill Wardwell is Vice President of Strategy and Product Management at Bottomline Technologies.
Healthcare Business Today is a leading online publication that covers the business of healthcare. Our stories are written from those who are entrenched in this field and helping to shape the future of this industry. Healthcare Business Today offers readers access to fresh developments in health, medicine, science, and technology as well as the latest in patient news, with an emphasis on how these developments affect our lives.