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Thursday, November 01, 2018

Healthcare Suppliers: How e-payments can shorten your DSO (and keep customers happy)

Day Sales Outstanding (DSO). It's on the minds of a lot of healthcare suppliers as of late. That's because the timeliness of your accounts receivables directly correlates to cash flow, which reflects the health of your business and ability to invest in more inventory, parts and people. Essentially, the number of days it takes to receive payments from customers can impact your ability to grow and invest in your business.

Adding complexity to the matter is that oftentimes healthcare providers would like to hang onto their cash as long as possible in order to improve their own cash position. Not to mention, the healthcare industry is navigating significant changes that can be felt in a number of ways. Many suppliers are feeling the pressure in cost containment, payment automation, credit card fees, provider demands and expectations, and the need for more efficient processes.

So, how can healthcare suppliers shorten DSO and keep their provider customers happy? Let’s first look at the unique payment needs for suppliers and providers.

Suppliers need:

  • Empowerment to affect the timing and terms of receivables
  • Predictable payment schedules in order to make smart business decisions
  • Improved cash flow for business investment and growth
  • Opportunities to maintain and improve relationships with their customers
  • Alternatives to expensive credit card exchange fees
  • Improved efficiency with an automated order-to-cash process

Providers need:

  • Improved cash flow and cash position
  • Opportunities to earn the greatest rebates and incentives
  • Options for payment in order to optimize payables
  • Improved accuracy and reconciliation of invoices and payments
  • Reduced burden on their accounts payable team through a more streamlined process
  • Improved efficiency from end to end in the procure-to-pay process 

There is really no denying that the payment needs of suppliers can be in contrast with those of healthcare providers. As with any vendor/buyer relationship, both parties must look out for their best interests, but it is undoubtedly more complicated in healthcare, and there is more at stake. That's why most payment solutions, even the newest and most innovative, aren't ideal for healthcare. Sure, they can automate and complete a payment transaction, but to truly nurture the relationship between healthcare suppliers and providers, you need a solution that honors both sides. 

GHX understands the complexities of the healthcare system and was built upon bringing providers and suppliers together to support the best interests of the industry as a whole.

Read more on invoice and payment automation for suppliers and providers on The Hub.

 

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