Whether you’re a chief financial officer overseeing a group of medical facilities or a physician at a smaller practice, this scenario may sound familiar: You arrive at work each morning to find an avalanche of invoices awaiting your approval.
Why are invoices so time-consuming? It’s not just to keep track of cash flow – it’s also because the finance team needs to understand exactly how to allocate the costs. Every medical facility has a unique set of suppliers, cost centers, and accounting requirements. Complexity grows if a business has multiple corporate entities (e.g., a legacy of mergers and acquisitions (M&A) or ambitious expansion). But underpinning and amplifying complexity even further are regulatory challenges.
If you had the time to step back and contemplate how you got here, you’d probably organize the challenges of your accounts payable (AP) domain into five broad categories:
- Regulatory compliance:It’s difficult to maintain precise records and ensure regulatory compliance, and especially so when AP processes are manual and decentralized. But you have to be exact: Any errors encountered during invoice processing could result in noncompliance, potentially leading to fines, penalties, and damage to the practice’s reputation.
- Complex corporate structures: Medical facilities with multiple locations often operate within complex multi-entity corporate structures. Each entity may have its own set of suppliers, cost centers, and budgeting requirements, all of which need to be accurately tracked and reported in the AP process. This complexity can lead to errors in expense allocation, approval bottlenecks, and overall inefficiency.
- Overwhelmed managers: Office administrators and physicians are often needed to approve invoices or provide additional context. They can easily become inundated with paperwork and requests. They often struggle to access necessary invoice details, or lack the tools to conveniently approve payments while on the go. This not only burdens these valuable team members but also delays the entire AP process.
- Ever-changing landscapes: Organizational expansion, new facilities, or mergers and acquisitions bring new challenges. AP teams are continually dealing with different rules, regulations, and processes for each new entity, making it challenging to maintain accuracy and efficiency in invoice processing and approvals.
- Resistance to technical change: Some health care professionals may be hesitant to transition from their established systems and methods. They may operate under the assumption that enhancing their AP processes will require substantial computer development, which can delay or even prevent organizations from attempting to fix their AP issues.
Understanding the true cost of manual AP
Accounts payable processes are often labor-intensive, error-prone, and expensive. This challenge is quite common across industries: In Stampli’s 2021 survey, AP Today: Bottlenecks, Benchmarks, and Best Practices, over 40% of businesses reported that they still process invoices manually.
For the reasons outlined above, the costs of manual AP are especially high in medical facilities. To help you calculate these costs, Stampli has prepared a comprehensive guide that details the ROI of AP Automation for Medical Facilities. Not only does this report explain the challenges and opportunities in greater detail, but it also provides the necessary framework and formulas to quantify how much your existing processes are costing you (and to estimate the savings that comes from automation).
Accounts payable automation at LTC Ally
The experience of LTC Ally demonstrates the value facilities with complex multi-entity corporate structures can derive from AP automation software. LTC Ally is a back-office services provider for more than 400 skilled nursing and assisted living facilities. They use AP automation software to digitize paper invoices and create automatic workflows for approvals, matching and payment processing.
LTC Ally often onboards up to 30 new facilities a month. Each individual facility represents its own entity with unique accounting needs, including managing distinct vendor relationships, coding preferences, approvals workflows, and distinct compliance requirements. Each new facility’s accounting data must be integrated into LTC Ally’s Sage Intacct environment, which requires a detailed mapping of accounts and a deep understanding of each entity’s financial operations.
This is not an easily standardized process: Each entity is a unique puzzle requiring specialized solutions, creating a substantial challenge in terms of scalability and efficiency.
Stampli, LTC Ally’s AP automation software, has enabled the firm to grow without a proportional increase in staff. Stampli syncs over all relevant data from the enterprise resource planning (ERP) for each entity, streamlining the detailed mapping of accounts without overlooking the unique characteristics of each entity’s financial operations. The automation not only speeds up the process but also ensures accuracy, eliminating the scope for human error. Once an entity is up and running, Stampli’s built-in artificial intelligence (AI) learns each entity’s unique AP processes, speeding up invoice processing while ensuring accuracy and eliminating human error
With Stampli, the ratio of employees to facilities decreased significantly, allowing them to onboard more nursing homes rapidly and pass cost savings on to their customers.
LTC Ally considers Stampli as more than just an accounts payable solution — it serves as a catalyst for their business growth. “We’re able to onboard more nursing homes more rapidly, and this has directly impacted our bottom line,” explains Sam Pirutinsky, partner and vice president of finance at LTC Ally.
Eyal Feldman is founder and CEO of Stampli, an AI-powered accounts payable automation solution that makes AP departments far more efficient, without requiring them to rework their ERP or change their existing processes. Stampli’s unique approach centers all AP-related communication, documentation, and workflows into one place for complete visibility and control.