One hospital’s accounts payable processing problems may sound familiar. It wasn’t just that their AP department couldn’t keep up—they were buried. Every month, invoices flowed in by the (mail) truckload and filled up their email inboxes, and their invoice processing procedures floundered.
This AP processing nightmare increased the risk of not closing the month out on time, processing duplicate invoices, and losing critical vendors unhappy with late or missed payments. This simply could not go on.
All Hands on Deck
With stacks of unprocessed invoices as the end of the month loomed, the AP department started to take an “all hands on deck” approach. In an attempt to stay current on accounts, everyone who worked in the department, including managers and supervisors, had to drop everything, ceasing any other work, and focus only on data entry into the accounting system at the end of every month.
This did help to get the job done, but it was problematic for many reasons. This “system” delayed other important tasks because employees were pulled away from their core responsibilities to frantically enter data. Racing through the work opened the door for a greater amount of errors and caused more than a bit of stress.
Another solution explored was to use temporary workers. More and more temps were brought onto the team. While they did help to cut through the workload, the problem persisted, and other issues arose.
Onboarding temps wasn’t efficient, and the number of new temporary personnel increased the risk for error, including double payments. Relying on temps wasn’t inexpensive either, as they contributed to rising operating costs, making it fiscally irresponsible to continue on in this manner.
As is the case with so many businesses and organizations today, another solution they tried was to rely on technology and explore outsourcing. This was by far the most successful solution.
The first part of this solution was for the hospital to find an experienced document management partner to orchestrate the transition from a paper-based system to a digital platform. They then outsourced the most time-consuming and manual tasks related to AP processing.
Vendors now send their paper invoices to a dedicated post office box and their electronic invoices to an inbox for daily monitoring and pickup by the hospital’s document management partner. The outsourced digital partner then preps, scans and indexes all paper invoices and captures data from the electronic invoices including vendor name, purchase order number and other invoice specific data. They then compare the digitized invoices to the hospital’s accounting system based on the purchase order number and if there is a match, they enter line item data from the invoice directly into the accounting software for immediate processing and payment. The processed invoices are then electronically stored in cloud document management software integrated with the hospital’s ERP system for archival purposes.
The hospital’s AP department now only needs to manually process invoices that don’t match the data in the accounting software. This is a miniscule amount compared to what they were wrestling with before.
Overall, this outsourced mailroom scanning, data entry and cloud document management process has proved to be far more successful than any other solution with invoice processing time going from weeks to days. The hospital’s AP department no longer relies on expensive temporary labor, the team can focus on their core responsibilities and invoices are processed both correctly and on time. Even better, the AP department is no longer fighting to attempt to keep up with invoices or struggling to close the month out on time.
Automated, outsourced invoice processing, including PO Box document scanning and indexing, turned this hospital’s accounts payable woes into a dream.Download Our Automation Guide