Boost Efficiency in Healthcare Accounting
Accounts payable is a cumbersome task without automation. For already strained businesses in the health industry, AP automation offers an easy win to improve efficiency in healthcare accounting operations. Let's find out how healthcare accounts payable software can help.
Healthcare organizations like hospitals, clinics, suppliers and private practices were affected by the COVID-19 pandemic as a front-line industry. Care providers had to act quick to pivot their services to support telehealth appointments, and deliver treatment plans and prescriptions remotely. More than a year later, healthcare organizations are facing ongoing financial challenges.
“International hospitals and healthcare facilities are facing catastrophic financial challenges related to the COVID-19 pandemic,” said the National Institutes of Health. The article added that American hospitals and healthcare systems face an estimated $202.6 billion in lost revenue.
"Reducing manual tasks in back-office functions is a key priority and AP is a good place to start."
With razor thin margins and shrinking budgets, accounting departments in healthcare facilities are looking for ways to cut costs and improve efficiency more than ever. For medical practices and clinics, doctors don't want to be businesspeople, they want to be doctors. In all cases, reducing manual tasks in back-office functions is a key priority and AP is a good place to start.'
Why AP Is So Important to Healthcare Accounting
In the simplest terms, your cash flow is money coming in and money going out. When the way you process and track your spend is wrought with inefficiency, the entire cash flow accounting process suffers. AP can also impact your business's credit rating and vendor relationships when bills are not paid on time. A lack of traceability and fraud prevention in your AP process can also impact your financial security. Now let's look at how you can improve your healthcare business's accounting efficiency by focusing on accounts payable.
Common Causes of Inefficiency in Healthcare Accounts Payable
If your healthcare organization is struggling with month-end closings and frustrated with inaccurate or incomplete accounts payable data, it may be caused by any or all of the following.
- Sluggish and/or manual data entry
- Data entry errors
- Invoice exceptions
- Re-keying invoice data into spreadsheets by hand
- Printing paper checks
- Waiting on vendors to cash paper checks
- Chasing down CFOs and managers for approval signatures
- Manual Collation
- Manual filing and paper file storage
- Stuffing envelopes and waiting on snail mail
How AP Automation Can Streamline Healthcare Accounting
- Automated capture of invoices
- Automated workflow for invoice & payment approvals
- Anytime-anywhere approvals
- Flexible payment method options including same-day ACH
- Audit traceability
- Multi-entity management integration
- Integration into your ERP or accounting software
Metrics to Track and Boost Healthcare Accounting Efficiency
Now that we've identified the pain points that automation can improve, let's look at some of the key performance indicators to track so you can improve efficiency. Of course total processing time and cost per invoice are important metrics for AP departments to track, but let's break it down. Here are 5 KPIs to think about.
- Time spent on invoice data entry
- Number of errors per clerk per month
- Number of exceptions per clerk per month
- Time between approval submission and signature
- Number of lost invoices per month
If you are finding inefficiencies on all of these points, it may be time to automate, or update your current AP automation solution. If you haven't automated your AP process, tracking these metrics is probably very difficult or even impossible. What's worse, you might be burning money on manual processing.
5 Keys to Choosing Healthcare Accounts Payable Software
1. Ease of Use
Is the solution simple to use and does it offer a familiar user experience to software you're already using? This will impact time-to-value and return-on-investment for any software.
2. Accounting Integrations
If you are using an enterprise resource planning (ERP) or other accounting management software, it is critical to get an AP automation tool that integrates seamlessly with your ERP.
This isn't just about the cheapest, it's about most bang for the buck. While a large one-size-fits-all vendor can offer competitive pricing, they might not offer concierge level support, or the solution might not be purpose-built for your specific accounting system. It's all about balancing the price of the solution, and the value of the service offering and integration.
The last thing you want is to be stuck on hold or be unable to get a support representative with deep knowledge of your solution when your team is going through a stressful period closing. What does everybody on support mean?
5. Fraud Prevention Features
Payments fraud is a growing problem. Assess your risk management needs before you implement any healthcare accounting software. The best AP automation software for your business is always going to offer robust security.
At Fidesic, service is our top priority which makes our Net Promoter Score (NPS) our key metric. Our current NPS places above 70% of other software vendors, and we're still improving. We are always working to exceed customer expectations. We have seen insights on what segments of our products people love and what we can improve.
Dynamics GP user? See what Fidesic AP can do for you.