Key takeaways: Increased labor costs and labor availability in healthcare continue to create challenges in…
Fraud and theft associated with invoices and checks have been ever-present risks in the business world, and they show no signs of letting up any time soon. According to a 2021 survey opens in a new tab report issued by the Association of Financial Professionals:
- Nearly 75 percent of the 520 corporate practitioner respondents were targets of payments fraud attacks in 2020.
- After reaching record-high levels in 2018 and 2019, payments fraud activity declined slightly in 2020. Seventy-four percent of organizations were targets of an attempted or actual payments fraud attack last year, down from 81 percent in 2019.
- The accounts payable (AP) department was cited by 61 percent of respondents as the most vulnerable business unit targeted.
- The payment method most impacted by fraud activity was checks (66 percent).
Fraud and theft flourish where paper and outdated processes reign.
And where do paper and outdated processes reign in healthcare? One area without question is supply chain purchasing opens in a new tab. In fact, according to PINC AI™ opens in a new tab data, as many as 70 percent of all invoices in healthcare are paper-based and between 70 and 85 percent of supplier payments in healthcare are made via paper check.
Furthermore, additional data from the Institute of Finance & Management opens in a new tab (IOFM) indicates that healthcare organizations’ AP processes are outdated on the back end. This was perpetuated in part by the pandemic, where healthcare organizations were receiving more invoices electronically, yet AP process effectiveness didn’t markedly improve, likely due to system and process immaturity.
Paper is popular but prone to problems.
Clearly, healthcare providers and their supplier partners favor paper, but what they may not realize is that paper’s far less secure opens in a new tab than automated e-invoicing and e-payment solutions. Here are five of the most common ways paper and the outdated processes linked to it enable fraud and theft:
- Paper checks can be intentionally damaged or intercepted, duplicated or rerouted, forged and lost in the mail.
- Thieves can lift company and banking details straight off a paper check.
- Revenues can be siphoned off through fraudulent invoices or fictitious suppliers.
- AP staff that are manually processing hundreds, possibly even thousands, of paper invoices and checks a month can find it challenging to notice patterns, identify duplicate invoices or pinpoint errors in time to correct them.
- Overwhelmed AP departments often don’t have the time or the manpower to question the legitimacy of every invoice that comes in for manual processing.
E-invoices and e-payments are the first line of defense against invoice and check fraud.
Digitizing the supply chain purchasing process through an automated e-invoicing and e-payables platform significantly reduces the risk of fraud and theft. Here’s how:
- E-invoices are encrypted to ensure a safe exchange between supplier and provider, reducing the chances of fraud or document forgery. They can be transmitted directly from a supplier’s system to the provider’s integrated enterprise resource planning (ERP) system – all without human intervention.
- E-payables in the form of virtual card and enhanced Automated Clearing House (ACH) are, by their design, more secure than paper checks.
- An automated e-invoicing and e-payables solution also comes with the added benefit of updates automatically deployed by the technology provider, taking away the worry of having in-house staff manage the updates and concerning themselves with hardware, software and data security.
- Virtual card numbers are randomly created for a one-time transaction and a specific amount, and information tying back to a health system’s bank account is never exposed.
- As for ACH payments, these transmissions go through a clearinghouse that enforces rules and regulations while keeping account numbers confidential.
Teamwork and technology: two musts for a secure P2P process.
Creating workflow synergies between healthcare providers and suppliers, and digitizing fragmented legacy systems through technologies that are artificial intelligence (AI)-enhanced and cloud-based, are the keys to mitigating fraud and theft in healthcare purchasing.
The “perfect” order – touchless and secure from entry to payment – really is possible. But having everyone in the process on board is essential.
With the right e-invoicing and e-payables technology, the need for paper and most human intervention can be eliminated, freeing up staff to focus on what matters most – building stronger healthcare supply chain relationships to enable the delivery of high-quality patient care.
Ready to join the digital revolution and safeguard your invoicing and payables processes with tech-driven automation?