The healthcare industry lags others in payments digitization, especially when it comes to the procurement of bulk medical supplies and equipment.
While suppliers prefer automated clearing house (ACH) and direct deposit payments, their customers still make up to 85% of their payments by check or other paper-based methods, as reported in the “B2B Payments in Healthcare Tracker,” a PYMNTS and American Express collaboration.
Get the report: B2B Payments in Healthcare Tracker
The inevitable errors and late payments that result from using legacy payment methods lead to predictable frictions between business partners. And they can only be alleviated only through automation platforms that can digitize the entire procurement process straight through to payments.
Offering Modern Solutions
Across the business-to-business (B2B) payments space, there are a growing number of opportunities to innovate on top of existing and evolving payment rails for both buyers and suppliers, Trina Dutta, vice president and general manager, B2B payments automation, global commercial services at American Express, told PYMNTS in a May interview.
For solution providers, including American Express, Dutta said offering modern, “consumerized and intuitive solutions” that are seamless to implement and use every day will tie together accounts receivable (AR) and accounts payable (AP) interactions more closely than ever before.
On the buyer side, Dutta said the increasing adoption of AP-focused automation solutions will drive volumes in commercial cards, along with other forms of electronic payments.
For suppliers, there is a growing need to provide visibility, efficient processing and a simple way to close out their books across several payment types and receipts.
Automating the Procure-to-Pay Process
PYMNTS’ research found that automation of the procure-to-pay process, which involves digitizing requisition, ordering, receiving and payment on one platform, can help reduce paper and handle electronic payments such as ACH debit and virtual credit cards directly from a hospital’s enterprise resource planning (ERP) solution.
Automation can also give better visibility in the procure-to-pay pipeline, allowing suppliers to better predict when to expect payments and provide on-demand payment details for AR reconciliation.
By using technologies such as artificial intelligence (AI) and electronic data interchange (EDI), automation also reduces human error and digitizes the entire procure-to-pay process, enabling invoices with exception errors to get the quick attention needed.
Healthcare organizations looking for reasons to switch to automated payments operations would do well to have a conversation with chief financial officers (CFOs) from other industries. PYMNTS’ research found that 91% of CFOs across many sectors said payment process digitization improved business efficiency, 84% said it improved management of working capital and 56% said it provided greater transparency.
Automation of payment and invoicing processes can grant both healthcare organizations and their suppliers many benefits, among them better speed and predictability of payments, increased protection of sensitive patient data and more accurate invoicing and payment status.
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