Hospitals, clinics and physician locations all over the country are scaling at increasing rates, and it has become necessary for providers to invest in systems that can sustain the companies’ growth. Large healthcare providers have recently reported they could benefit from the reduced operating costs, streamlined workflows, expedited payment processes and maximized efficiency that comes with integrated technology like accounts payable (AP) automation.
Before getting into why this is important, let’s define Accounts Payable.
What is Accounts Payable (AP)?
AP is defined as money owed by a company to its creditors, or in the case of business payments, vendors or suppliers. AP departments are responsible for tracking what is owed and sending out payments. Historically a paper-heavy department, choosing to automate AP processes can eliminate manual data entry, reduce paper-intensive processes, increase operational efficiency and automatically update reporting for easy reconciliation. AP automation aims to provide an easier and more effective way to handle payments, improve supply chain management and reduce time and costs spent on processes, all while creating enhanced experiences for businesses and their vendors.
What problems do healthcare providers face that AP automation can solve?
Healthcare providers aim to provide not only an optimal experience for their clients and patients but also for their vendors and suppliers. With this goal comes a few challenges.
As providers grow, so does their reliance on vendors and the number of paper checks that providers will have to send to them. This is alarming since the payment delays and errors associated with paper checks seem to be the leading factor in why most payments are not received on time, leading to additional efforts to correct payment errors. The necessary steps it takes to send out checks - from writing, collecting signatures, cutting and mailing them - are both tedious and unreliable.
Automation supports digital payment methods, such as virtual cards and ACH, eliminating excessive amounts of paper to expedite payments and reducing the cost and risk associated with checks. The money saved by automating and digitizing this process can be reallocated to other parts of the business.
Time-Consuming and Costly Manual Processes
Another problem healthcare providers face is tedious manual filing and bookkeeping. Manually maintaining records requires a great amount of time and effort and can often be unreliable, running the risk of inaccuracies due to human error. Transitioning from manual processes to using all-in-one integrated platforms offers a compelling solution that can additionally safeguard payment data. Protecting sensitive information and ensuring data consistency across several platforms is critical to monthly reconciliation, year-end forecasting and tax reporting.
Implementing AP automation will ensure on-time payments and reduce dependency on manual labor. This change helps healthcare providers avoid payment errors and protect every payment made through digital channels.
Strained Vendor and Supplier Relationships
Undoubtedly, payment delays have consequences that can deteriorate relationships between businesses and their vendors and suppliers. A survey obtained by PYMNTS found that “73% of companies have strained corporate relationships due to payment delays.” Enhancing vendor relations is an essential solution because vendors keep businesses running smoothly, so providers and staff have access to necessary medical supplies. Investing in integrated payment automation will decrease vendor and supplier tensions and greatly optimize cash flow operations and efficiency.
Lack of Business Insights
Automating AP can streamline internal processes by preventing duplicate and erroneous payments while providing better tracking and management of payments. This aspect grants healthcare providers access to clear, consolidated reporting within their existing system. Offering a single source for payment tracking and management assists in providing insight-driven forecasting for improved budgeting.
Unhealthy Bottom Line
Businesses can enhance their bottom line by increasing cash flow using virtual cards. When healthcare providers send vendor payments using a virtual card, they receive rebates back from the money spent. Rebates allow healthcare providers to take funds earned and put them towards other business expenses. Completely digital, virtual card implementation requires almost no additional labor or complicated efforts.
The Bigger Picture: AP Automation
Overall, AP automation technology benefits healthcare operations - whether a clinic, hospital or therapy center - by offering a simpler way to process outbound vendor and supplier payments. From saving time through an effortless integration to promoting back-office efficiency and offering valuable rebates from virtual card spend, every business can benefit from the automation of manual processes.
Payment automation providers such as REPAY specialize in creating customizable AP automation tools fit for any healthcare provider.
Get started today with digital payment systems designed to elevate the way you do business.