When organizations can but don’t take advantage of prompt pay discounts, they’re not practicing sound financial management.
During a recent Discovery Review, we worked with a healthcare system who made early payments to a vendor. This may sound smart in theory, but the healthcare system gave up over $26,000 in unused discounts on just 23 invoices. This resulted in a $1,000+ loss per invoice. The health system processed approximately 120 invoices a year to the vendor, meaning a potential annual loss exceeded $120,000.
So, what went wrong in the example above? From human error to technological limitations, there are a number of factors that your organization should be aware of. In this specific example, The Audit Group found that:
If the root-causes above sound all too familiar for your health system, try the tips below to make sure you are taking advantage of cost-saving discounts.
The Audit Group is a the only healthcare consulting firm that combines cost analysis, process improvement, and team development to grow your organization. Contact us to learn more about how our Discovery Review can improve your bottom line.