The future of healthcare is impacted heavily by insurance, regulatory compliance and other major factors. Thus, hospitals, clinics, and other patient care networks across the country are looking for means to become more financially stable. As part of this, they are trying to become more efficient in using every dollar to improve patient care. For the healthcare industry, much of this effort is focused on digitizing patient records to reduce the cost of record-keeping, decreasing the wait time for patients, a. It has been successful, but limited, effort.
Discover Discounting
The new source of funding now is the same one that other industries use, dynamic discounting. Reduce the payment time to vendors (medical suppliers) in exchange for a discount on that payment. Since half of all hospitals still issue paper checks, AP Automation for health care supports this just as easily in the health industry as it does with light manufacturing and other industries.
Stepping Away from Paper
Accounts Payable for healthcare organizations and networks are still mostly on paper. A survey from PayStream Advisors revealed that these groups receive almost 75 percent of their invoices through the mail, FAX, and email. That is one of the highest numbers still out there. For those that think they have an electronic invoicing system, it often turns out to be part of their original ERP (Enterprise Resource Planning) tools or people in the AP department think that entering everything into an Excel spreadsheet somehow makes it an E-invoice.
Let’s go back to paper checks for a moment. There is nothing useful about them anymore. Just getting payment out to a vendor can take several days even after the invoice is approved. Hospital AP clerks must get approval to cut a check and then wait for someone in finance to process the information manually. Like paper invoices, checks get lost, accidentally shredded with an envelope, or get coffee and tea spilled on them. Or maybe none of those happen because it got lost in the mail in the first place.
AP Automation for Health Care
AP Automation for health care lets the Hospital AP and Finance departments pre-approve payment depending on the trustworthiness of the vendor, amount of the invoice, and other factors that they tailor to their healthcare organization. Once the invoice shows up in their system, payment processes in minutes. That gives AP and Finance the leverage to ask for a payment discount. Vendors across every industry have agreed to this discounting. Since vendors have their payment more quickly, which allows them to expand their business with more confidence.
The same applies to the healthcare organization. Payment schedules are tighter which means that budget projections can be more accurate and based on actual money on-hand. For any hospital, clinic, or other patient care organization, developing an AP Automation Health care process is the key to increasing their profitability and patient care.