Key takeaways: Increased labor costs and labor availability in healthcare continue to create challenges in…
- Common misconceptions about accounts payable (AP) automation are holding many healthcare organizations back from capturing the full benefits automation provides.
- Those that see beyond the myths and adopt tech-enabled invoicing and payment processes can gain opportunities to drive business forward amid today’s challenging economic environment.
- Remitra®, Premier’s cloud-based, procure-to-pay (P2P) platform, is helping healthcare organizations achieve better financial health by offsetting inflation, optimizing cash flow and combatting labor shortages.
The need for greater operational efficiency, cost reduction and workforce productivity in our economically uncertain environment continues to push companies toward accounts payable (AP) automation adoption opens in a new tab in their finance departments.
One business sector falling short in embracing the benefits of AP automation opens in a new tab is healthcare. Many hospitals and health systems still use manual, outdated AP processes that are slow and prone to error, which can lead to discrepancies between purchase orders (POs) and invoices, and credit holds that result from late payments to suppliers.
It’s no secret that AP automation can help streamline the entire procure-to-pay (P2P) process – from PO delivery to invoice receipt and approval routing to payment processing – saving healthcare organizations both time and money while freeing up AP staff to focus on more value-add activities that positively impact the bottom line.
And that’s where Remitra – Premier’s cloud-based, P2P technology that’s designed to seamlessly automate financial processes to reduce waste and increase efficiencies for both healthcare providers and suppliers – comes in.
So, what’s keeping so many hospitals and health systems from fast forwarding into the 21st century and implementing this vital technology? Conversations our Remitra team has had with healthcare leaders and finance professionals reveal a consistent set of myths that lead to roadblocks and questions, hampering AP automation adoption in their organizations.
To help separate fact from fiction, below are five AP automation myths we regularly hear from healthcare providers — and the truths behind them.
Myth: It’s impossible to go paperless.
Fact: Providers can eliminate paper and PDF POs, invoices and paper checks with Remitra.
The electronic data interchange opens in a new tab (EDI) capabilities of Remitra enable providers and their suppliers to conduct business on a common platform by integrating their enterprise resource planning (ERP) systems. This helps create much-needed standardization between providers and suppliers; helps eliminate human error and expense associated with the manual processing of POs; and helps ensure invoices are accurate and paid on time.
- With the Remitra Exchange tool, providers’ electronic POs are converted to email format and sent to non-EDI-capable suppliers.
- Suppliers’ paper invoices are received in the Remitra digital mailroom where they are opened, scanned, translated into electronic format using Optical Character Recognition (OCR) technology and delivered to the workflow or directly to the provider’s ERP.
- Providers can replace paper checks with electronic payment options such as automated clearing house (ACH) and virtual credit cards, which help streamline and safeguard the payables process.
Myth: Electronic payment methods aren’t secure.
Fact: Paper checks are more prone to fraud and theft than Remitra electronic payment methods.
With each check a provider sends out, they’re also sending out sensitive data like the name of their banking institution, bank routing number and account number that could all wind up in the hands of thieves. In addition to being stolen, paper checks can be forged or get lost in the mail, never making it to the suppliers they’re intended for. Using Remitra electronic payment methods, providers can maximize opportunities for efficiency and minimize opportunities for check fraud and theft opens in a new tab.
- Virtual cards and ACH make payment more efficient by eliminating processes like data entry and by streamlining reconciliation.
- Remitra virtual cards utilize an exact pay model whereby a unique security code is randomly created for a one-time transaction and a specific amount, helping to avoid the exposure of a provider’s bank account information.
- Through a partner organization, Remitra enables ACH payment transmissions, which go through a clearinghouse that enforces rules and regulations while helping to keep providers’ account numbers confidential.
Myth: Automating AP processes costs too much.
Fact: Remitra AP automation can help reduce expenses and generate dollars back to the healthcare organization.
As inflation persists and costs for labor, raw materials, transportation, services and supplies have not returned to normal, forward-looking healthcare leaders are reimagining the supply chain and how incorporating AP automation can address ongoing financial pressures. Here are just a few ways Remitra can help:
- A health system that processes 60,000 invoices annually and pays its suppliers via virtual card could potentially yield an average of approximately $718,000 in cash back rebates over three years. Combined with the average annual hard cost savings of eliminating those paper invoices ($840,000, which doesn’t include the reduction in labor costs), this could lead to a total net gain of over $1.5 million, according to a Remitra prospect opportunity analysis.
- Hundreds of millions of dollars in working capital may be unlocked with the new Remitra Cash Flow Optimizer (CFO) technology — dollars that can be optimized to invest in operations and back into communities, offset rising costs and declining Medicare reimbursements, address labor challenges and more.
- Time and expense associated with manual invoice and payment processing can dramatically be reduced with Remitra AP automation. On average, it takes 14.3 days to process a paper invoice versus 3.7 days to process a digital invoice. The difference in the cost of a paper invoice versus a digital invoice is $12. And when it comes to electronic payment transactions versus check payments, the savings is $3 per electronic payment [on average].
Myth: Any planned upgrades to the ERP system should be completed before starting other process or technology changes.
Fact: Remitra AP automation technology can be implemented any time, but if an ERP upgrade is planned, addressing both at once can be advantageous.
One of the best ways to improve efficiency within a healthcare organization is to implement AP automation technology, and if an ERP system upgrade or transformation is planned, providers should consider accomplishing them simultaneously. Doing so enables the organization to manage finances more effectively and improve business operations overall, not to mention addressing both at once can save a lot of time and effort and keep bad data and processes from migrating into the new ERP system.
- Remitra AP automation tools are both ERP- and group-purchasing-organization (GPO) agnostic, standardizing supply chain data flow between providers and the suppliers they do business with.
- Incorporating Remitra AP automation can enhance an ERP system upgrade, providing near real-time reporting and improved accuracy that gives AP teams visibility into supply chain spend.
- Remitra tools can also help reduce costly PO/invoice match exceptions by having common invoice line errors auto-corrected or auto-rejected before they hit the ERP system.
Myth: Automating AP will lead to staff layoffs.
Fact: Remitra AP automation is designed to act as a ‘labor extender’ in the finance department.
AP automation can be a powerful tool for healthcare organizations grappling with workforce issues opens in a new tab in their finance department, acting as a labor extender that enables AP teams to do more with less by helping to maximize their resources and productivity.
- By automating administrative accounting tasks, employees can refocus their efforts on activities that contribute to the delivery of patient care and drive business forward in a more rewarding way (e.g., building stronger supplier relationships, sourcing new prompt-pay discounts and other financial incentives from suppliers, and rebates from credit card processors).
- Automation affords employees the flexibility of a remote working environment, which can support a healthy work-life balance while increasing employee engagement and satisfaction.
- Automating invoice processing, approvals and payments with the Remitra platform means that the AP team can be located anywhere. Staff gain 24/7 access and 100 percent control and visibility over the P2P process.
Follow the facts – don’t let these AP automation myths hold your healthcare organization back.
Gone are the days of excusing your hesitancy to tech-enable outdated, manual AP processes based on these myths and misperceptions.
They’ve been debunked.
Discover all that Remitra AP automation can do for your healthcare organization.