Large healthcare organizations can have thousands of active vendors. Every day, purchases are made, contracts are signed, and items are returned. All of this activity can cause details to slip through the cracks, making it very important to closely monitor rebates and discounts offered by vendors. Don’t let an opportunity for cost-savings go missed.
Oftentimes, vendors will offer promotional discounts and rebates based on the large volume that their healthcare clients purchase during a pre-set time frame. Over time, if your health system is not taking advantage of rebates, the amount of money lost grows.
We recently worked with a large health system, who had entered into a contract with Sodexo Inc. & Affiliates. The vendor agreed to volume discount rebates if the system purchased more than a certain threshold within a given quarter.
The health system met its quota to receive a rebate in two quarters. Sodexo honored the contract and applied the rebate in both instances, as a credit to the organization’s account. Sounds great, right?
However, the health systems Accounts Payable department was not monitoring rebates outlined in contracts. Because AP was unaware of the rebate credits on the account, the health system never deducted the available credit from future invoices.
During our Discovery Review with the health system, the Audit Group identified the outlying credits. We were able to offer vendor management recommendations to the organization, to improve rebate and discount tracking.
To avoid leaving money on the table, your Accounts Payable department should have a smart system in place for monitoring rebates and discounts from all vendors. Implement the tips below in your Vendor Management process to make sure no funds are lost:
If your organization is due for a review of your vendor master list and associated processes, contact TAG to learn more about our Discovery Review process and the money we can recover for healthcare organizations like yours.