Over the past decade, we’ve seen a growing trend of accounts payable departments investing in technology and innovative process improvements to increase efficiency and reduce costs. Healthcare leaders are demonstrating they can save significantly on their overall AP spend, thus shifting the perspective that support organizations must be cost (not profit) centers. Unfortunately, many of the traditional investments and improvements in supplier payments fail to realize optimal savings potential.
Recently, while analyzing large healthcare organization’s cash flow and payment processes, we discovered an innovative approach to payment optimization that quickly and easily maximizes savings potential without disruptive change to existing business processes. This solution, provided by Viewpost, can be implemented whether you’ve invested in an electronic payment initiative or if you’re still sending paper checks.
Despite remarkable efforts to eliminate paper-based payments, the healthcare industry has come to accept a typical mix of 15% card payables, 35% ACH payments, and 50% paper checks as a success. This leaves significant savings opportunities on the table. When you look closely at the technology and processes implemented by traditional banks and service providers, the shortcomings are clear:
But, if the industry views these results as a success, why challenge the paradigm? More importantly, if your organization has already invested time and resources in the electronification of payments, why take a closer look? Simply put, if you haven’t evaluated a payments optimization engine, either as a stand-alone solution or as a complement to an existing program, you could be missing out on millions in savings and exposing your organization to unnecessary financial risk.
A large healthcare organization in the Southeast was burdened with $1.4 billion in annual payments to suppliers. In efforts to convert this spend from paper check to ACH and electronic card (virtual credit card), the company was required to employ a team of 13 to manage vendor enablement, information collection, and maintenance related to ACH and card payables. After years of effort, they reached $100 million of card payable spend and 30% adoption of ACH payments — the operational overhead had been accepted as a cost of business and the savings were believed to be fully mature. But there was much more to be gained.
After review of the company’s payment file, Viewpost discovered an enormous opportunity to drastically increase revenue-producing spend and dramatically decrease costs attributable to a paper check, ACH and card administration. After its initial post-launch supplier enablement campaign, Viewpost added more than $150 million of additional card payables spend, resulting in a seven-figure, perpetual revenue stream. This was achieved without disrupting the incumbent relationship.
Companies like Viewpost have proven that you can, and should, get more from your AP automation investment. Viewpost delivers on all of the best practices for payment optimization services, plus add unique technology and innovative processes that set them apart from large banks and other providers.
Here are a few things to think about as you consider your payment optimization strategies:
If you’re interested in learning more about payment optimization, contact a TAG consultant or reach out to a Viewpost representative today.