Return Documents in Healthcare: Why Purchase Order Acknowledgements, Delivery Notes and Invoices Are Increasingly Becoming a Digital Priority

Greater transparency, lower error rates, more efficient processes – when healthcare providers receive return documents such as order acknowledgements or delivery notes electronically, they gain several benefits. It is hardly surprising that, as part of the transformation of their procurement processes, more providers want to track the status of deliveries digitally. This increases the pressure on suppliers, who must meet their customers’ requirements to remain competitive in the future.

Healthcare providers lack digital return documents

Manual procurement processes cost time and money

To illustrate this, let’s consider the worst-case scenario and outline an example in which a provider still relies entirely on manual procurement processes – a scenario that is time-consuming and prone to errors:

1. Requisition: The individual departments of a hospital draw up requisitions, usually on a sheet of paper, which is sent to the purchasing department by fax or internal post.
2. Ordering: All requisitions are collated in the purchasing department, where they are manually checked, amended and consolidated into orders, which are then sent to the individual suppliers, also by fax or email.
3. Order verification and dispatch: Suppliers receive unstructured orders, which they must first laboriously check before the goods are picked and dispatched with a manually generated delivery note and invoice.
4. Goods receipt: Logistics staff must reconcile delivery notes with orders, check quantities and verify package contents, if necessary, in consultation with the purchasing department, which is involved in the event of queries regarding orders.
5. Invoice verification: If the invoice is sent by fax, email or post, the invoicing triggers a further verification process at the hospital, during which the accounts department checks the contents of the invoice against those of the delivery note, re-examines the goods received and verifies whether the prices on the invoice correspond to the order.

These processes are highly inefficient, as they involve an unnecessary number of resources and the potential for risk is immense. Manually assigning and transferring information – from the order to the delivery note and on to the invoice – leaves the door open to human error. If data is passed on incorrectly or goes missing, people on both sides of the supply chain must pick up the phone to clarify queries. Orders, delivery notes and invoices thus pass through several hands, costing two things that are traditionally in short supply in the healthcare industry: time and money.

Without return documents, no efficiency in downstream processes

The good news is that more providers are relying on electronic data exchange to process their orders digitally. Instead of reaching for pen and paper or picking up the phone, they generate standardised messages from their ERP systems or inventory management systems – where suppliers’ product data is stored – which can be processed electronically by the supplier. Provided the data is synchronised, the supplier can dispatch the goods without having to carry out a time-consuming check of the order – and far more quickly than in the worst-case scenario described above, where unstructured orders must be processed manually.

The catch is that it is only the orders that are processed electronically. Whether order acknowledgements, delivery notes, invoices or credit notes – in the healthcare industry, return documents are in most cases still sent out in the ‘good’ old-fashioned way. The workload for the so-called downstream processes in the hospital therefore remains enormous. Unnecessary resources are consumed, particularly in goods-in and accounting departments, which is costly.

Improving operational efficiency through electronic purchase order acknowledgement

It is therefore hardly surprising that demand for return documents is on the rise. Given the increasing cost pressures facing healthcare providers, it is essential to streamline processes and thereby boost operational efficiency. If, for example, the purchase order acknowledgement is also sent electronically, the provider knows in advance which items are currently available and, ideally, when they will arrive. This not only allows storage capacity to be planned accordingly but also enables the provider to determine whether operations can be carried out as scheduled.

The benefits associated with electronic return documents naturally also depend on the information provided by suppliers. If, in addition to the usual item information such as the GTIIN, batch numbers and expiry dates are also included, the relevant data finds its way into the inventory management system in real time – through deep integration without human intervention, but fully automated.

Electronic return documents increase transparency for healthcare providers

By providing electronic return documents, healthcare providers not only gain greater transparency regarding the status of their deliveries but also receive additional product information that enables specialist departments to work more efficiently. From the person placing the order on the ward, to the picker in the goods-in department, right through to the accountant in the finance department – virtually everyone involved in the supply chain benefits when they no longer must manually transfer and compare information. This leads to a lower error rate and, consequently, fewer queries regarding orders, which can be processed more easily and paid for more quickly.

The fact that electronic return documents have a positive impact on financial statements is particularly evident in accounting. If orders and invoices are posted automatically in the background, the time required for invoice processing can be significantly reduced, enabling healthcare organisations to meet discount deadlines. The best example is Düsseldorf University Hospital, which has been receiving invoices from its suppliers in digital form since 2020 and has been saving six-figure sums annually ever since.

Suppliers must meet their customers’ requirements

The increased demand for electronic return documents from healthcare providers naturally has an impact on the industry as well. To remain competitive, suppliers have little choice but to provide order acknowledgements, delivery notes and invoices via digital interfaces. It will not only be a matter of electronically transmitting the return documents containing the most important information – from availability and delivery times to additional attributes such as GTINs, batch numbers or expiry dates – but also of structuring the data in such a way that it finds its way into the providers’ materials management systems without human intervention.

The overarching goal of providing better patient care at lower costs can only be achieved if both sides of the supply chain work together, ideally via a business network that adheres to global standards. Instead of relying on disparate individual connections, providers and suppliers should recognise the potential for scaling. Connecting to a central digital platform enables both sides to process all transactions (order, order acknowledgement, delivery note and invoice) automatically with all connected business partners – without significant manual effort, but quickly, securely and with minimal risk of error.

James Vanstone

Key Account Manager

James Vanstone, Key Account Manager at GHX Europe, is a proven expert in the strategic optimisation of supply chain processes in the healthcare industry. Drawing on his extensive expertise, gained from over 15 years’ experience in the SaaS sector and advising stakeholders within the healthcare ecosystem, James Vanstone supports healthcare providers, suppliers and manufacturers in the healthcare industry in increasing their operational efficiency and improving patient care.