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January 11, 2022
Ensuring vendor compliance at your health system may seem like a daunting, impossible task that never ends. You’re not wrong. Managing thousands of vendors and holding them accountable is complex and requires attention to detail and a timely dedication your Procurement and Accounts Payable (AP) staff may not have. The results of not doing so can be catastrophic to your health system’s bottom line, costing the healthcare industry $1.7B* annually. To battle this, your health system must create a comprehensive vendor compliance management policy and process. What to Consider in your Vendor Compliance Process Bring AP and Supply Chain Departments […]
November 18, 2021
Returning unused or unwanted products at your health system is unavoidable making a well-defined returned goods process an essential asset. Industry-leading returns processes directly reduce millions of dollars in exposure to risk– $7M annually at health systems in the USA*. No health systems are alike making it difficult to design a one process fits all approach to the industry’s returned goods issue. However, there are several elements that are critical in a successful returns process including: Interdepartmental communication and accountability Clearly defined responsibilities and policies Ownership, accountability, and oversight Leveraged Technology such as a returned goods log Reconciliation Tracking of […]
July 16, 2020
Blanket purchase orders (POs) are often used to help reduce system costs, operate with only necessary inventory, and increase purchasing power. Nonetheless, blanket POs are often a source of lost funds for a healthcare system. Typically, TAG recommends limiting or eliminating the use of blanket POs because of the associated risks. We recognize, however, that some situations necessitate the use of a blanket PO. When those circumstances arise, your system should consider the following risks and implement preventative measures to reduce those risks. 1. Lack of Required Information Blanket POs often lack many of the standard controls found within traditional […]
June 9, 2020
Healthcare systems return an average of 4% of the products they purchase each year. Of that amount, 7% of the amount returned never gets credited back by the vendors totaling a loss of $700,000,000 annually.*no-repeat;left top;;auto in returned goods credits lost each year$700Mvertical Why does the Returned Goods Process Lose Millions? The returned goods process is an incredibly important area, spanning multiple departments of every health system. In theory, it is a relatively simple concept – return unused products and get your money back. However, the repercussions of mismanaging the process are significant. Organizations that mismanage their returned goods processes […]
September 5, 2018
In our many years reviewing health system cash flow, we’ve found that returned goods are one of the largest areas of claims identified and recovered. Significant money may be lost during the return process, due to lack of proper communication between the Accounts Payable, Purchasing, and Receiving departments. Ideally, a health system’s returns policy would require all departments to return items through the Receiving (or Shipping) department, with persistent follow up by Accounts Payable or Purchasing. This back and forth communication is crucial to ensure no funds are lost. These communications should be properly documented, and departments should task one […]
July 17, 2018
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. What This Means to Hospitals and Healthcare Systems 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 […]
