In healthcare bookkeeping, managing accounts payable (AP) is among the most resource-draining tasks. When done manually, it not only eats up staff time but also increases the risk of payment delays and compliance issues, ultimately affecting the entire workflow. However, as healthcare accounts payable automation advances, professionals may delegate these tasks to software and concentrate on improving services. Below, we will discuss how automation affects back-office processes in medicine and how it is changing the sector.
The Unique AP Challenges in Healthcare
The medical sector faces non-standard difficulties that make healthcare accounts payable automation a critical investment.
- Medical institutions interact with payment documents from various sources, including counterparties, labs, and internal departments. Processing such volumes of information manually is problematic, especially when it comes to paper invoices. They require data entry and arranging a storage location.
- Clinics must comply with strict regulatory standards, including the Health Insurance Portability and Accountability Act (HIPAA). It involves preserving sensitive user data, a task that poses numerous challenges. Incorrect handling of protected health information (PHI) may lead to fines and reputational damage. If you use manual processes, the risk of information loss or illegal access increases.
Solving these problems enables a company to cut expenditures, minimize inaccuracies, and foster long-term relationships with vendors.
Benefits of AP Automation in Healthcare
Medical institutions handle a variety of paper documents, including client registration forms, explanations of benefits (EOB), and medical bills. Let’s discuss how healthcare accounts payable automation may positively impact hospital operations.
- Multi-entity management. Clinics may improve their AP operations for their divisions in different countries. You will be able to carry out financial operations worldwide with end-to-end automation, supporting companies with a branched organizational structure.
- Optimal invoice processing. The longer it takes to process each payment document, the higher the risk of late payments. This worsens interaction with counterparties and does not allow you to get discounts for fast settlements with counterparties. Automation means facilitating medical billing. Clinics get minimal processing expenditures, quick approval of invoices, and satisfied partners.
- Transparency of cash flow. Manual accounts payable management requires sorting through paper documents, tracking files, and managing physical storage. This makes it difficult and time-consuming to maintain a clear audit trail or determine payment status in real time. Healthcare AP automation suggests optimal reporting, auditing, and financial transparency for organizations.
Paper invoicing requires additional time and resources. AP automation systems with advanced security functions enable medical institutions to protect their personally identifiable information (PII).
Key Features of an Automated AP System
Modern AP software offers advanced functionality to simplify the work of accounting departments. Let’s analyze the most essential features.
- OCR and intelligent data extraction from documents. Optical Character Recognition (OCR) invoices is a procedure for collecting information from digital records, including invoices and other accounting statements and converting them into searchable and editable text. Such software scans read-only documents, including PDF files and images, recognizes and collects essential data, and then converts it into editable text.
- Approval workflows tailored to departments. Automated systems provide customizable workflows tailored to the unique needs of your healthcare institution. The software allows you to customize the process by department, expenditure center, and applicable standards, ensuring the right bills are approved by authorized specialists at the right time.
- Synchronization with EHR and ERP digital solutions. To provide maximum efficiency, healthcare accounts payable automation apps should be synchronized with existing systems, including accounting software, enterprise resource planning (ERP) systems, and electronic medical record systems (EMR). To eliminate manual data entry and boost data accuracy, an AP digital solution should be able to collect and process databases from such systems.
When selecting a suitable application, ensure it provides the capabilities listed above. Select software from reliable developers to interact with AP and accounts receivable (AR).
Compliance and Recordkeeping in Healthcare
Gone are the days when healthcare companies only had to address patient care-related issues, as they now have to address complex regulatory compliance and cybersecurity issues well beyond the medical field.
- HIPAA compliance for partner data. The act dictates national norms for protecting client information and ensuring that vendors comply with regulations. This includes implementing robust vendor management programs, signing Business Associate Agreements (BAAs), and utilizing advanced security systems.
- Automated audit trails for internal and external reviews. Ongoing AP auditing is crucial for several reasons, including detecting suspicious activity, ensuring compliance, and enhancing financial performance. Automated audit trail solutions maintain detailed records of all operations throughout the payment cycle, from ordering to sending money. This transparency facilitates both internal and external audits.
It is critical to comply with all applicable data recording and protection rules to prevent issues with regulatory institutions, counterparties, and potential fines.
Choosing the Right AP Automation Tool
Despite the many challenges in healthcare, the sector remains slow to embrace change. Telecommunications giant Vonage notes that medicine professionals are reluctant to adopt innovative technologies and tools. However, selecting the proper app improves the performance of AP departments.
- Vendor compatibility and software integrations. Your AP software should work together with your current accounting automation and ERP. Successful synchronization ensures unified coding and transparent data flow, decreases manual labor, and eliminates the risks of discrepancies between systems. Don’t neglect vendor onboarding, and explain to your counterparties how the automatization will improve your interactions.
- Cost, training, and user experience. Even the most popular software will not benefit your clinic if it is difficult to utilize. The interface should be clear and user-friendly. Ensure your team will not require months of training to start using it.
Do not forget to evaluate your budget as well. To select the best healthcare accounts payable automation application, ensure it is adapted to all the norms and requirements of the medical sector.
Implementation Tips and Considerations
If you decide to adopt automation in your clinic, we recommend following a few key guidelines.
- Staff training and change management. Employees must understand how to utilize the software to maximize its benefits. Managers must ensure that staff are familiar with the new software and understand how it will impact their activities. Upon completing the training, specialists should be able to process invoices, access information, and resolve other issues.
- Metrics to evaluate ROI and improvements. After the automation system is launched, it must be monitored and improved as needed. You must evaluate the ROI, that is, the return on investment that the clinic receives from utilizing software for healthcare accounts payable automation. It is also essential to regularly evaluate the data to define fields for optimization, analyze the app’s impact on main procedures, and address any other problems that may arise.
Consult with specialists before implementation to boost the system’s profits.
Closing
Although it may seem like an exaggeration to say that financial apps improve the patient experience, in reality, every hour saved can be spent by hospitals caring for their clients.
BooksTime specialists will take care of all AP-related questions and ensure healthcare accounts payable automation runs smoothly from day one. From setting up workflows to managing vendor communication and compliance, we help medical institutions free up valuable time and resources.
