Collecting your vendor statements is essential to holding healthcare vendors accountable and ensuring the accuracy of pricing, inventory, supplies, and services received. Reconciling vendor statements allows your Accounts Payable (AP) department to monitor accounts and prevent potential credit holds. Statement collection may be the only way to capture missed credits that were not correctly sent to your organization. Periodic statement collection ensures you capture all available credits, preventing vendors from unauthorized use or escheatment to the state, and saving your AP team from time spent chasing unclaimed property.
While the benefits of vendor statement collection are vast, health systems do not always consistently receive statements from their vendors creating a bottleneck in the reconciliation process. Use these tips to ensure you are getting the vendor statements you need.
Your health system likely works with thousands of vendors each year. AP should establish criteria for a target group of vendors and develop a list that is deemed high risk due to factors such as missed credits, aged invoices, and available prompt pay discounts.
When targeting vendors, track the accounts that you have reconciled as well as the contact information and account numbers for each. This ensures you are not starting from scratch each time you request new vendor statements.
While compiling your target list, note any vendors that have caused issues in the past such as withholding certain documents, especially credits. Further, be sure to have a timely collection of statements from vendors that are known to apply credits or excess payments without your authorization. AP must watch for vendors that may hold invoices a few days after issuance to minimize honoring prompt pay discounts.
Ensure you are using keywords when requesting statements such as a “full, detailed AR aging report” and an “open item statement” that communicates you want every open item, not just invoices. Other vendors tend to care more about getting payments and clearing past-due invoices than about disclosing credits and unapplied payments.
When possible, request complete downloads of open items in an Excel or CSV format as opposed to PDF documents. This allows for easier comparison with the health system's ERP and imagining systems to capture missing documents.
Ask your vendors to send monthly statements to a dedicated AP email address to collect all statements in a central location. Utilizing the same account allows the vendor to become familiar with the contact and shorten response times on requested items. Once a statement is received, utilize a repository (shared drive, imaging system, etc) that allows for the reconciliation of open items and acts as a way to keep notes on the statement so you may follow up with the vendor for any documents not yet received.
Collecting vendor statements requires a consistent approach. Often times, you will find missing items on a statement one month that were not on previous statements. Having the repository mentioned above allows you the opportunity for a quick comparison to determine average processing time for vendors as well as a chance to identify your problem vendors as noted in Tip #2. And most importantly in this step, you’ll find requesting a statement once or twice is not enough, it often takes 3+ requests.
Is your AP department lacking resources or sufficient staff to focus on all of your vendors, or worse, sacrificing the essential step of collecting statements? We’re here to help. Contact us today and learn how you can outsource statement collection for your health system.