Duplicate Payments, Overcharges and Returned Goods constitute more than two-thirds of all TAG recovery claims. The lack of a proper vendor tracking program can result in hidden financial waste in a hospital’s procure-to-pay process.
If the Vendor Master File is not updated regularly, discrepancies in invoices and Purchase Orders may go approved without researching root causes, leading to overcharges. When vendor mergers or acquisitions occur, duplicate payments are more likely to occur due to duplicate vendor numbers that appear to be separate entities. ERP systems often cannot catch these duplicate payments across multiple vendor numbers even when the invoice number, date and amount all match to a previous payment.
Imagine your health system has two active accounts for the same vendor, one for the vendor and one for the vendor’s pharmacy division. The pharmacy division account number was initially chosen and payment was made to it. A week later, another check was sent to the vendor that issued the invoice, leading to a duplicate payment. That, combined with other process breakdowns, creates tens of thousands of dollars in losses when your healthcare system does not post the credit from the duplicate payment back into its accounts.
To avoid ending up in a similar situation, TAG recommends taking steps to improve your vendor tracking:
The first step to better vendor management is having an effective vendor tracking program. If your accounts payable department struggles with returned goods, overcharges or duplicate payments, give us a call. We’ll work with your team to improve your tracking program and recover more money–all without losing any productivity.