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July 27, 2021
There is no shortage of data to track and measure, but tracking the right data is what matters – especially when measuring departmental and individual performance. Use these Key Performance Indicators (KPIs) to track, monitor, and measure a Health System’s AP department on efficiency, productivity, and cost savings. Top AP KPIs Invoice Cycle Time Invoice Cycle Time must be monitored and closely managed to avoid late payment penalties and allow the health system to take full advantage of all prompt pay discounts. Depending on your health system’s cash flow strategy, AP should aim to lower their invoice cycle time to […]
September 17, 2018
When organizations can but don’t take advantage of prompt pay discounts, they’re not practicing sound financial management. During a recent Discovery Review, we worked with a healthcare system who made early payments to a vendor. This may sound smart in theory, but the healthcare system gave up over $26,000 in unused discounts on just 23 invoices. This resulted in a $1,000+ loss per invoice. The health system processed approximately 120 invoices a year to the vendor, meaning a potential annual loss exceeded $120,000. How Unused Discounts Cost Your Organization So, what went wrong in the example above? From human […]
August 8, 2016
Issues: Many vendors offer cash discounts for invoices paid within a set number of days Payment terms may not be communicated to AP resulting in invoices being paid in full within the cash discount period Example: A vendor offered a 3% discount for invoices paid within 90 days Several invoices paid within 30 days, but the system did not apply the discount TAG contacted the vendor to request credit for missed discounts Vendor confirmed credit and agreed to deduct 5 months of discounts from the system’s next check run TAG Tips: Give highest priority to invoices offering cash discounts for […]
