Healthcare Accounts Payable Automation: Everything You Need to Know

NetSuite has industry-specific healthcare accounting software and other ERP modules for the healthcare and life sciences industries. Without automated checks, healthcare AP is vulnerable to fraud schemes and duplicate payments. Simple matching errors can result in paying the same invoice twice or falling victim to phishing attacks. Regularly track accounts receivable to ensure your healthcare business’ financial well-being.

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• When cash reserves are strong, leaders may choose to accelerate payments to strengthen vendor relationships or secure future pricing advantages.
• Rolling out AP automation in healthcare requires a solution built for your sector’s complexity.
• These widely dispersed suppliers often introduce distinctive invoicing structures, currencies, and payment terms into the mix.
• As part of its unified platform of financial automation software, Tipalti also offers Procurement software and advanced FX products for cross-border payments called Multi-FX and FX Hedging.
• These systems allow hospitals and clinics to manage accounts receivable and payables, as well as billing and payments.
• AP systems help hospitals and clinics to streamline their payments, automate processes, ensure accuracy, and avoid errors.

Automating payments can help reduce the incidence of fraud by 10x, and automated invoice processing can red-flag issues before you must deal with them. A manual-based healthcare AP process doesn’t just encompass paper payment transactions. A manual process also includes paper tracking documents and storage files — all of which make it difficult and time-consuming to follow an audit trail or determine real-time status of a payment. The process begins with invoice capture, where the AP automation system collects invoices from various sources. Invoices can arrive in multiple Foreign Currency Translation formats, including paper, email, or electronic submissions through a vendor portal.

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Automated approvals and contract-matching free up finance teams to focus on vendor relationships instead of chasing down signatures and correcting errors. Timely and accurate payments are fundamental to maintaining healthy relationships with vendors. Automated AP systems facilitate this by enabling electronic payments, which are faster and more reliable than traditional checks. Additionally, features like dynamic discounting allow healthcare organizations to take advantage of early payment discounts, benefiting both the provider and the vendor. Such advantages are particularly important in the healthcare industry, where the timely availability of medical supplies and services can directly impact patient care. According to research by PayStream Advisors, duplicate payments, late payments, missed discounts, and high processing costs are the biggest challenges facing healthcare payables teams.

Are You Interested in Improving Compliance with AP Automation?

When a hospital orders medical supplies, the resulting supplier invoice becomes an accounts payable. Within the accounts payable department, that invoice is entered, approved, and scheduled for payment turning invoices and payments into recorded liabilities on the balance sheet. Optimizing AP processes for efficiency and cost reduction is essential when resources are limited and workloads are high. A patient receives a bill for $500 from a healthcare provider after their insurance company has processed the claim. The patient is responsible for paying a portion of the bill, let's say $100, while the remaining $400 is covered by insurance.

Risk, controls and compliance

• NetSuite has industry-specific healthcare accounting software and other ERP modules for the healthcare and life sciences industries.
• A sophisticated AP transformation partner will have built-in security monitoring technology to identify threats and stop unauthorized transfers of funds.
• As BrightView saw very soon after implementation, MineralTree carries several advantages over legacy systems and manual invoicing.
• Additionally, you may not qualify for high-quality business rewards credit cards that can help you earn rebates and put money back into your business.

How often does your entire payables process come to a grinding halt as a result of one individual being out of the office or away from their desk? Given the number of invoices a healthcare organization deals with, this could add up to tens (if not hundreds) of thousands of dollars. Healthcare is one of the most highly regulated industries, given HIPAA and other compliance requirements. Many more eyes are on the financials of healthcare organizations than in any other industry. Robust financial controls are often extremely difficult to implement for a company with as many compliance regulations as those in the healthcare industry.

Can accounts-payable automation in healthcare be scaled as the organization grows?

Let’s identify the top accounts payable analytics that many health systems find useful. Managing a health system is complex, and technology can answer whether your healthcare accounts payable are on track or holding you back. Tipalti specializes in multi-entity payment processing across the globe, providing consistent vendor onboarding with a self-service system. The platform allows you to focus on strategy rather than just making sure people are paid on time.

• Get complete visibility into the status of every bill and payment so you can accurately forecast cash flow and ensure bills are paid when you want them paid.
• With Tipalti's Mass Payment solution, Legends of Learning has reduced payment processing time from one day to 30 minutes.
• Optimizing payables is a critical strategy for healthcare providers seeking to improve cash flow, reduce costs, mitigate exposure to risk, and strengthen supplier relationships.
• Above all, your AP partner should protect your payments from being intercepted and offer expertise to help your team avoid sophisticated fraud attempts.
• However, the true value lies in the tremendous cost savings with healthcare AP automation that often far exceed the initial investment!
• Delays are caused when your team must stop their workday to research the exception, determine next steps, and identify the process for a single invoice.

Improved Vendor Relationships

By leveraging our industry knowledge and cutting-edge technologies, healthcare organizations can optimize their AP operations and benefit from proven strategies. Handle monthly AP cases to ensure timely payments and maintain positive vendor relationships in the healthcare industry. Organizations working with a paper-based AP process struggle with getting payments done on time. And for a healthcare provider, this problem might be more serious than in any other industry.

Healthcare Accounts Payable Automation 101: Everything You Need to Know

Organizations that treat AP as a financial control hub, rather than an invoice processing function, are better equipped to manage economic pressures and sustain their mission over time. I was highly impressed with the professionalism and responsiveness of the entire SAS team. The A/P recovery audit was well managed, minimally disruptive to operations, and identified unexpected recovery dollars and patterns enabling further tightening of controls and processes. The lead on the engagement was highly proficient with the software we balance sheet use and required no training on our systems. Maintain Clear Patient Communication Provide clear, understandable billing statements and explain payment policies to reduce confusion and encourage timely payments. Partnering with Vinali Group means gaining access to comprehensive financial strategies and expert guidance, helping you optimize your accounts payable and receivable operations while minimizing financial risks.

GTIL is a non-practicing, international, healthcare accounts payable coordinating entity organized as a private company limited by guarantee incorporated in England and Wales. Services are delivered by the member firms; GTIL does not provide services to clients. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. This Grant Thornton Advisors LLC content provides information and comments on current issues and developments. It is not, and should not be construed as, accounting, legal, tax, or professional advice provided by Grant Thornton Advisors LLC. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this content.

Accounts Payable vs. Receivable: Why Understanding Both is Essential for Healthcare Financial Success

These benefits translate into smoother operations, healthier margins, and stronger support for patient care. For deeper insights on how AP automation integrates with broader cost accounting efforts, see our blog on cost accounting in healthcare. The provider reviews the denial, corrects the error, and resubmits the claim. Once the claim is approved, the $2,000 becomes part of the accounts receivable balance until the insurance company reimburses the provider. Besides, it is a financial metric that enables providers to oversee revenue streams for a steady cash flow.