The healthcare sector is transforming at a rapid pace. Many hospitals and health systems are making the shift from fee-for-service to value-based care, and there is a greater financial incentive to reach optimum performance standards and provide high-quality care at the lowest cost possible. Naturally, we’re seeing this mindset extend to accounts payable as well.
Healthcare organizations are increasing emphasis on optimizing cash flow and operational efficiency. In an environment where back-office operations are often on tight time constraints and under pressure to cut costs, outdated systems and manual processes are no longer cutting it. As an organization, it’s important to recognize and be aware of the potential accounts payable problems that may be slowing you down.
Common Accounts Payable Problems in Healthcare: 5 Signs To Look For
Here are some of the common accounts payable problems currently facing the healthcare sector and signs that your organization’s AP process might need a revamp.
- Paper-Intensive Processes Are Slowing You Down
Is your organization receiving and processing paper invoices and cutting paper checks? Paper-based methods can cause drawbacks like data entry errors and increased processing time. Additionally, the cost of paper, printing, and postage materials can add up. This process is resource intensive and can make processing slow and tedious for all parties. Not to mention, if checks are consistently arriving late, your suppliers may become frustrated and these relationships could suffer.
With electronic invoices and payments, you can expect your AP process to speed up significantly, often by up to 80%. This transition can also save your healthcare organization money, decrease the risk of manual errors, and mitigate fraud.
- Matching Errors Keep Happening
Another common problem your hospital or health system may run into is matching errors. When you receive an invoice it’s important to make sure the information on it is accurate and reflective of the goods or services you received. However, this can become a guessing game if you have a disorganized system in place and are left searching for purchase orders under a pile of papers.
Many automated AP systems help with this critical step by automatically matching invoices to purchase orders that sync from your accounting system. This speeds up the approval process and adds another layer of validation that helps enforce your internal controls.
- You’ve Accidentally Made a Duplicate Payment
Without a digitized system in place, it becomes easier to make mistakes. Human error is natural, and often there are inconsistencies in regard to manually inputting invoice data or coding. These errors may result in duplicate or erroneous payments. And if your company uses multiple accounting systems, it’s even easier to accidentally pay an invoice twice.
Using an automated AP solution completely eliminates this risk. Many automated invoice systems have sophisticated detection capabilities that immediately flag any duplicate invoices in the system and stop the process to alert AP managers of the inconsistency before payments are issued.
- You’ve Paid Invoices Before Receipt of Service or Product
Have you ever paid off an invoice before actually receiving a service or product? This is a sign of disorganization caused by a traditional AP system. It’s important to ensure that products or services have been received in the manner by which they were presented in the contract and have arrived before making a payment — paying bills before they’re due can have a negative effect on cash flow.
An automated system helps your healthcare company improve workflows by streamlining the process. Invoices are recorded as they come in, matched with purchase orders, and payments are scheduled so that they’re on time or so you can capitalize on early-pay discounts.
- Data Entry Errors Are Happening More Often
Are you finding your company is making more data entry errors than usual? Maybe you’ve put in the wrong invoice number or paid too much for an invoice. This will negatively affect your company’s cash flow and can result in financial damage if the mistake is costly enough. It also takes additional time and effort from the AP team to correct these mistakes.
With an automated system, data entry errors are a thing of the past. Invoices are automatically captured with a high degree of accuracy and are posted to your accounting software and all information is automatically digitized and tracked throughout the entire AP process.
Why Use an AP Automation Solution?
MineralTree’s AP automation solution was designed with these common AP challenges in mind.
Designed to easily integrate with your ERP system, an integrated payables solution automates the end-to-end accounts payable process and seamlessly incorporates all payment types into a streamlined workflow that completely eliminates the need for paper and the tedious work that is typical of a manual system.
Are you ready to start moving away from paper checks and manually coding invoices and chasing down approvals? Learn more about MineralTree’s Invoice-to-Pay solution here.
Check out our E-Book about Payment Automation in Healthcare!