Suppliers want to improve receivables performance, while providers need to manage payment flow and access all available discounts and rebates. Is there a way for both sides to win?
In life, and in business, enduring relationships require a commitment to transparency and trust.
When it comes to buyers and sellers, the bond can be delicate, especially in matters of cash and working capital performance—or payment. In fact, there is no bigger priority for healthcare suppliers over the next year than improving receivables performance, according to a recent survey of 100 financial leaders at major healthcare suppliers by Institutional Investor Custom Research Lab. It is also the hardest area to influence.
Not surprising, this interest in improving receivables performance—and respondents’ awareness of the challenges involved—are paramount since order-to-cash improvement often rests on a company’s ability to influence their customers’ timing and mode of payments. Rising interest rates, growing competition and the monumental shift for providers from the traditional fee-for-service model to value-based reimbursement are only adding to the challenge.
Is there a solution that is simple, seamless and easy to implement?
A growing number of suppliers and providers have found that using a common epayables platform that seamlessly connects the vast community of healthcare buyers and sellers, while also automating the payment process through a single portal, accomplishes the goal. By aggregating spending across a vast community of providers, suppliers are able to leverage dynamic discounting while also seeing total receivables across the entire market.
Many hospital AP departments still use paper-based processes, which can be costly and inefficient. The more vendors a hospital contracts with, the more cumbersome and costly its payment process. Checks may be lost or stolen, which can lead to even more expenses, and this labor-and time-intensive payment process is not beneficial to cash management or to trading partner relationships.
A best-value payment solution
By deploying an ACH-based payment exchange that negotiates the most favorable terms and conditions via multiple payment ‘rails’ or options, providers reduce AP costs and gain revenue through increased rebate capture.
Suppliers, on the other hand, are able to remove costs by gaining scale across the base of providers they serve—as overall volume grows among provider organizations, fees decrease based on achieving tier volumes. This allows both sides of the equation to shift labor resources to higher priority projects, which is increasingly necessary as mergers and acquisitions continue to be the norm throughout healthcare.
A common payment platform means there is only one epayables format to deal with, providing a standardized process for payment and far simplified reconciliation. Providers now can streamline all phases of the invoice-processing workflow by securely consolidating multiple payments into a single electronic file. This expedites payments on a controlled schedule and lowers the cost of processing invoices.
Today’s healthcare finance executives want more sophisticated, in-depth financial performance analytics to drive business forward.
They also want secure solutions. Using a common payment platform means suppliers only have to share confidential bank information once instead of sharing it with each individual provider they serve.
A common payment platform is the most complete and effective procure-to-pay and order-to-cash solution. It also facilitates trust and transparency between providers and suppliers—the formula for enduring relationships.