For many healthcare organizations, managing spend is a distraction, not a differentiator. Hospitals and medical facilities need to prioritize caring for the health of individuals. Tracking spend isn’t at the core of what differentiates organizations in the marketplace, but it is at the heart of running your facility efficiently and effectively.
As the healthcare industry grows and evolves, organizations are facing the reality that tracking spend data matters. In a shifting industry landscape, medical facilities are feeling growing pressures on operating costs and staff reductions—doing more with less—and quickly realizing the challenges that come with managing spend. Organizations are encountering new competition from Urgent Care centers and noticing a rise in non-evasive surgeries, meaning shorter patient stays. The number of Affordable Care Act (ACA) subscribers is rapidly rising, with 14 million subscribers and counting. On the clinical side, big data is helping to digitally unlock patient charts and details. With access to so much patient health data, it begs the question: shouldn’t healthcare organizations have the same leverage over their spend data to optimize the cash flow inside the organization?
There’s a lot of spend to manage!
Healthcare facilities’ primary mission is to help people and patient care. The task of improving processes within AP departments can seem minor and can often be deprioritized because it’s so far removed from patient care.
While it may seem like a low priority, organizations that do focus on improving processes and visibility within their AP departments are actually impacting the bottom line significantly, giving doctors and staff more time back to focus on what matters most, patient care.
And not only is hospital and medical facility spend increasing, but the way spend is managed is across various channels, including:
- Direct PO
- Indirect PO
- Indirect non-PO
- Expense reports
We’re seeing a lot of growth in these categories that has never been seen before. So as the spend landscape continues to become more complex and different forms of invoice spend become more difficult to centralize, how do healthcare organizations efficiently manage it?
In managing invoice spend, medical facilities are encountering a variety of pain points that hinder their efficiency. Ardent Partners discovered some specific pain points related to AP processes for hospitals, including:
- Resolving matching errors and managing exceptions
- Manual data entry
- Routing invoices for approval
- Lack of visibility across invoice-to-pay process
- Lost or missing invoices
- Inability to accurately forecast liabilities
Does any of this sound familiar? These are some pressing challenges for healthcare AP teams to solve. More importantly, many of these challenges are manifesting themselves into a slow process that’s costing hospital and medical organizations precious time and money.
Automation is key to efficiency
A key to effectively managing invoice spend is automating your AP processes. In a study from the Aberdeen Group, automating invoice processing dramatically reduces the average cost from $21.20 to $4.00, and processing time from 14.3 days to 3.7 days.
Although automation can dramatically improve time and costs associated with spend, there’s more to the AP process success.
But automation alone isn’t the answer
In a survey conducted by Ardent Partners, AP teams were asked what the most important factors are driving AP in the functions it can deliver on for its organization. The results are as follows:
- Reducing processing costs: 41%
- Increase invoice/payment data visibility: 40%
- Improve reporting and analytics: 28%
- Better collaboration with suppliers: 26%
- Better collaboration with procurement: 24%
While reducing process costs is top priority, the remaining factors center around gaining deeper data access on invoice. In all organizations, there’s a drive toward gaining better access and visibility into invoice data. With access to this data, organizations can collaborate much better internally and externally to drive efficiency. In addition, visibility into invoice data gives organizations better control and key negotiating abilities.
Automation provides the efficiency in AP processes, but visibility to invoice data is the next step towards healthcare invoice management success.
The solution for healthcare AP departments
Concur offers a solution that automates your invoices and integrates with T&E payments into a single system for managing all your healthcare spend. Concur captures paper and electronic invoices, so you can capture all your AP spending and simplify the entire process—from purchase requests to processing and payment.
To hear more on this popular topic, please watch the webinar: Healthcare Spotlight: Automating Accounts Payable with Concur Invoice or visit Concur Invoice Management.