Accounts Payable Automation for Healthcare Organizations

Accounts Payable Automation for Healthcare Organizations

Healthcare is one of the most heavily regulated industries. From a strictly operational perspective, the healthcare industry’s Accounts Payable (AP) can either sail efficiently down or barely make it downstream. However, AP automation can help healthcare businesses improve operational efficiency while reducing their costs and staying compliant with strict regulations like HIPAA.

Not just this there are so many benefits of adopting AP automation for healthcare organizations. For instance, automation can help process invoices early and receive early payment discounts, automatically adding more dollars. It is estimated that AP automation can help capture up to almost 100% of available early payment discounts, whereas capture rates for manual processes stand at only 20-30%​​. And the list does not stop here; it goes on and on.

Let’s take a look at how AP automation is going to change the face of healthcare:

Benefits of AP Automation in Healthcare

1. Improved Efficiencies and Accuracy: Traditional AP processes are labor-intensive and riddled with inherent errors; for instance, duplicate invoices and data entry errors. On this note, AP automation reduces these errors by adopting technology. Optical Character Recognition is used to digitize and extract data from invoices for faster processing times with fewer discrepancies.​

2. Cost Savings:  Automation of AP is an efficient way to reduce labor costs and eliminate expenses resulting from manual data entry errors. Furthermore, healthcare organizations can gain early payment discounts and avoid late fees by streamlining invoice processing and approval workflows​.

3. Enhanced Compliance and Security: Healthcare organizations face heavy regulation, and AP automation provides end-to-end process transparency and audit trails while processing sensitive financial information securely, thus minimizing the chances of compliance breaches and subsequent related fines. ​

4. Improved Vendor Relationships: AP automation runs off timely payments to vendors, which helps maintain good vendor relationships. Although this is true in every case, it’s of life-and-death importance in the case of healthcare—or at least to a reliable supply chain, which is a lifeline of the operation. Faster—but correct—payments significantly improve the satisfaction and trust of vendors​.

Steps to Implement AP Automation

1. Assess Current Processes: Review your AP process to identify pain points and understand exactly what may be automated. This includes the volume of invoices being processed and common pain points​.

2. Choosing the Right Solution: Choose the perfect AP automation solution for your healthcare institution’s needs. The features to look for are invoice capture, capturing data extraction, approval workflows, compliance management, etc. Ensure that it integrates with existing ERP systems​. 

3. Configure and Train: Customize the AP automation system to the specific workflows and policies at your organization. Provide in-depth training so that users in your organization can use the new system properly​.

4. Test and Deploy: Test rigorously to find out the glitches and fix them. Deploy the system gradually; during the transition period, the existing system should run in parallel for some time to support a smooth transition into the new system.

Challenges in Implementing

A few problems can hamper AP automation in healthcare, such as staff resistance to change in the learning pattern and then there is the complexity of integration with existing IT systems. There is a need for efficient solutions to all these problems, which demands effective means of communication and planning. Showing the benefits being carried to work, such as less workload and accuracy, helps to get buy-in from stakeholders​.

Due to these implementation challenges, many companies prefer outsourcing Accounts Payable. However, the use of automation or outsourcing the process depends on the scale of complexity and available resources.


AP automation gives a healthcare organization a strategic edge in terms of enhanced agility, cost-cutting, and compliance. While accounts payable automation can streamline processes and improve efficiency, managing it effectively requires ongoing expertise and resources. Outsourcing accounts payable services offer a seamless alternative for businesses seeking a comprehensive solution without the hassle of in-house maintenance. 

At OBS, we specialize in outsourced account payable services for Healthcare organizations to enhance operational efficiency. Reach out to our experts for tailored solutions and unparalleled support!

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