Accounts Payable in Healthcare: The Challenges and How to Overcome Them
Published on:16 September 2024
AP Automation for your
peace of mind- we got this.
As a healthcare company, you work with many vendors to keep things moving. From medical supplies and equipment to services and maintenance—they’re all vital to delivering quality care.
With so many invoices and different payment terms, staying on top of it all can get tricky. You need to keep things organized and compliant to ensure your business runs smoothly.
We’ve listed five challenges healthcare companies face in accounts payable management—and how AP automation can help. Let’s dig into it.
Contents
Read full article
5 Challenges Healthcare Organizations Face in Accounts Payable Management
Managing accounts payable in healthcare isn’t easy. From handling high volumes of invoices to staying compliant with regulations, AP teams face unique challenges every day. Here are five key issues that can complicate the process.
1. High Volume of Invoices
Healthcare organizations often face a flood of invoices from multiple sources—suppliers, service providers, and internal teams. Managing this amount of work by hand can be a heavy load. This is especially true for paper invoices. They require a lot of data entry and need physical storage space.
2. Manual PO Matching
Imagine having a pile of multi-pager invoices with hundreds of lines at your desk.
Matching those items manually takes a lot of time. You may also find price differences or issues with the goods receipt. These problems can cause delays in transactions and lead to even more manual work.
In other words, matching large amounts of invoices to purchase orders eats up a lot of time for AP teams in healthcare.
3. Managing Multiple Locations and Organizations
Healthcare organizations typically operate in multiple cities. So, it’s not surprising that managing utility bills and other recurring invoices manually for all facilities quickly becomes a painful mess. Ask any accounts payable department in healthcare what they think about routing invoices to the appropriate buyer or coding the invoice to the appropriate cost center. We’re sure they’ll get the shivers.
4. Late Payments
Organizations working with a paper-based AP process struggle with getting payments done on time. And for a healthcare provider, this problem might be more serious than in any other industry.
Missed or late payments can disrupt cash flow, lead to costly late fees, and strain relationships with suppliers—risking the delivery of goods and services on time. And ultimately, the care for patients.
Timely payments are essential for keeping your organization’s strong credit standing. This is important for healthcare organizations in a competitive market.
5. Staying HIPAA Compliant
The healthcare industry is regulated by the Health Insurance Portability and Accountability Act (HIPAA). For AP teams, that means keeping patient data protected—a task that can become a headache.
When handling invoices, any slip-up with protected health information (PHI) can lead to serious legal consequences and large fines. And if you’re still relying on manual processes, the risk of data breaches or unauthorized access only gets higher.
Read also: What is HIPAA
The Benefits of Automating Accounts Payable in Healthcare
Automating accounts payable in healthcare can transform how your organization handles invoices and payments. It speeds up processes, reduces errors, and frees up time for your AP team to focus on more value-adding tasks. Here’s how automation can make a difference.
Process Large Invoice Volumes Faster
Automating invoice capture and approval workflows frees up a lot of time for your AP team—especially if your healthcare organization is spread out across multiple locations.
An invoice capture solution like Rillion extracts data from both paper and digital invoice formats and handles the admin work so that you don’t have to.
Once an invoice is registered, it’s automatically routed to the appropriate approver who’s notified by email. When everything’s in order, the invoice is pushed to your ERP for recording and payment.
And unlike other solutions, Rillion doesn’t force you to change your existing workflows. You can customize approval workflows and account coding to suit your specific needs.
The result? Lower invoice processing costs and faster approval times.
Eliminate Time Spent on Po Matching…
Remember the multi-pager invoices with hundreds of lines? You can match those to purchase orders and goods receipts in minutes. Here’s how it works in Rillion:
- The purchase order is pulled from your ERP.
- The purchase order is matched at the header and line level.
- If there is missing or incorrect information, a workflow is automatically created based on the PO matching results.
- The approver immediately receives an email notification to sort out the exception with a click.
…And Invoice Coding
There’s no doubt that non-PO workflows also benefit from AP automation. In Rillion, you can let AI do the invoice coding for you.
Think of it as your AP assistant that makes your job a lot easier. It generates predictions based on historic invoice and coding data, reducing the risk of errors caused by manual work.
Faster Payments and Healthier Cash Flow
Automating accounts payable in healthcare speeds up invoice processing overall. Quicker approvals mean payments will be on time and leave your suppliers satisfied. And no more scrambling to avoid late fees.
It will also have a positive impact on your cash flow. With a payment automation solution like Rillion Pay, you don’t need to keep track of varying payment terms or worry about late payments, overpayments, reconciliation issues, and lost checks.
Read also: How Does Payment Processing Work with Rillion Pay?
Better Compliance and Fraud Protection
Automating your AP process doesn’t just make things faster—it also helps keep your organization compliant and secure. With Rillion’s AP automation solution, staying HIPAA compliant becomes a whole lot easier.
The system is built to protect sensitive patient data every step of the way, cutting down on manual data entry and reducing the risk of mishandling protected health information (PHI).
AP automation also protects you from fraud. With automated workflows, you get full visibility into the approval process, making it easier to catch any red flags before they become bigger issues.
Audit trails and secure storage give you peace of mind, knowing that unauthorized payments and potential breaches are kept at bay.
Your team can focus on what really matters: providing great care. You won’t have to worry about compliance or security issues.
Stronger Medical Supplier Relationships
It’s not only faster invoice approvals that help foster strong relationships with your suppliers. By automating payments, you can free up resources to focus on other aspects of vendor management, such as sourcing and performance evaluation.
Rillion also offers an analytics tool where you can easily identify patterns and trends in your vendor invoice payments. As with everything else, knowledge is power and you can use this information to improve vendor selection and negotiate better terms.
How two healthcare companies automated accounts payable with Rillion
WeCare
When WeCare switched from their previous accounting software to Dynamics 365 Business Central, they chose Rillion as their AP automation software.
With 54 healthcare center locations across the US, managing utility bills and other recurring invoices became too much of a hassle. They also struggled with visibility into their approval workflows and finding correct invoice data.
After implementing Rillion, WeCare has experienced smoother approval workflows and control over their invoices. They particularly like the cloud-based searchable invoice archive that has resulted in more visibility, less manual error, and manual work.
Kelly Cambre at WeCare says, “Being able to download a PDF of an invoice has been very useful. Using the comprehensive search function has saved me the most time.”
Smiles First
The accounts payable team at Smiles First was having issues with the volume of vendor invoices it was processing each month. The data from each invoice had to be entered manually into NetSuite and uploaded to Sharepoint. No wonder these processes took up a considerable amount of their time.
Luckily, with Rillion’s AP integration to NetSuite, they could speed things up big time.
Now, Smiles First has visibility into the invoice approval process and each practice has gained control over their expenses.
“I like that with Rillion you see a pie chart of the expenses. So, each month I can see where we’re at from a quick glance,” says Nikki Milian, Accounting Manager.
See What Rillion Can Do for Your Healthcare Accounts Payable Process
So, there you have it. Accounts payable teams in healthcare face challenges daily, but technology is on their side. With AP automation, healthcare organizations can worry less about supply shortages and lack of control. This allows them to focus on providing quality patient care.
Ready to see what Rillion’s AP automation solution can do for your healthcare organization? We’d love to show you! Book a personalized demo of Rillion and we’ll take it from there.
More exciting reading
