January 11, 2022

How to Ensure Vendor Compliance at your Health System

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 […]
October 18, 2020

5 Tips for Collecting Vendor Statements

Collecting your vendor statements is essential to holding healthcare vendors accountable and ensuring the accuracy of pricing, inventory, supplies, and services received. Reconciling vendor statements allows your Accounts Payable (AP) department to monitor accounts and prevent potential credit holds. Statement collection may be the only way to capture missed credits that were not correctly sent to your organization. Periodic statement collection ensures you capture all available credits, preventing vendors from unauthorized use or escheatment to the state, and saving your AP team from time spent chasing unclaimed property. While the benefits of vendor statement collection are vast, health systems do […]
September 28, 2020

6 Essential Clauses to Include in Healthcare Supplier Contracts

US Healthcare supply chain overspends by $25.4B each year, equating to 30 percent of total spend in the industry. Healthcare supply chain leaders must be proactive to eliminate the causes that contribute to this overspend, starting with the first line of defense – supplier contracting. Healthcare systems must review their general agreements and additional clauses to ensure they include the information below to protect against overcharges and other causes of leaked funds. Freight Charges Freight charges must be addressed in each supplier contract to include the party responsible for paying the freight. Organizations are encouraged to negotiate freight charges to […]
September 10, 2019

Five Reasons to Perform a Vendor Master Cleanse

On average, health systems work with over 27,500 vendors at a given time with seven percent of those vendors changing their name, affiliation, or standing on an annual basis. With such a large number and variability of vendors, managing vendor data can quickly become cumbersome for an organization’s Accounts Payable (AP) department creating exposure to payment errors, fraudulent charges, and risk of noncompliance. To minimize these risks, AP departments or the parties responsible for the vendor master must keep their master file current and free of errors by performing a vendor master cleanse and maintain the file on a quarterly […]
January 24, 2019

Changing POs to Match Invoices Can Lead to Fund Loss

Purchase Orders are widely used by hospitals and health systems. To follow best practices, Accounts Payable departments should always use POs to prevent duplicate payments, ensure correct pricing on invoices, and, in turn, save your organization money. When purchase orders are not used correctly, it can cost you. Purchase Order Malpractice: Changing POs to Match Invoices We recently worked with a health system that was in need of a process improvement when it came to purchase orders. They did not have a system in place for Accounts Payable to consistently use POs. As a result, during our Discovery Review, we […]
January 14, 2019

Are You Managing Your Purchasing or Allowing Vendors to Manage It?

Hospital purchasing contracts exist to protect an organization’s funds by clearly defining suppliers’ terms. Not having a contract on a regularly purchased item can lead to higher pricing, as one of our hospital clients discovered after a vendor rep left.   The hospital had a verbal agreement with the manufacturer’s representative for textile products, which were purchased through a distributor. After the rep left the company the distributor began charging the hospital the manufacturer’s list prices because it had no vendor agreement for the rep’s discounted pricing. Since the hospital also lacked a contract in its system for the discounted […]
December 26, 2018

4 Steps Toward a Best-in-Class Vendor Management System

The relationships between vendors and healthcare organizations are highly complex and data-intensive. In a perfect world, each of these relationships would be documented and maintained in a hospital’s vendor master list–without fail. Although we don’t live in that perfect world, there are still many steps your health system can take to achieve a best-in-class vendor management system. 1. Make Vendor Management a Priority The first step toward building a better vendor management system is recognizing the inadequacies of your current process. If your system is noticing errors like duplicate payments and returned payments, then there may be a gap in […]
4 Steps Toward a Best-in-Class Vendor Management System
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