- Healthcare providers and suppliers may have untapped working capital locked away in their manual, paper-based accounting processes.
- By automating their accounts receivable (AR) and accounts payable (AP), organizations can unlock these potential extra dollars for investing in future growth opportunities.
- With its new Cash Flow Optimizer (CFO) technology, Remitra® is enhancing its automation capabilities and advancing the way providers and suppliers transact, enabling new levels of efficiency, accuracy and profitability, which leads to better patient care.
If you uncovered an underutilized $10 million for your organization, what could your organization do with it? If you’re a healthcare supplier, would you use it to invest in operations and mitigate rising costs of energy, transportation and manufacturing that are perpetuating global supply chain disruptions? If you’re a healthcare provider, would you use it to address labor challenges your facilities may be facing and the significant costs in recruiting and retaining staff?
If the idea of ‘finding extra working capital’ has piqued your interest, now you’re probably wondering where the money could be hiding and how you can unlock it. Hint: If you’re a supplier, look to your organization’s accounts receivable (AR) processes, and if you’re a provider, look to your accounts payable (AP) processes.
According to one report, finance leaders recognize ‘increasing working capital’ as the next value driver and automating AR is a potential major source of opportunity. If your organization hasn’t yet embraced the power of automation in your AR and AP departments, there might be opportunities for working capital optimization hiding in your inefficient, paper-based ordering, invoicing and payables processes. Money is wasted when providers and suppliers can’t smoothly transact from source to settle.
Remitra®, Premier’s automated procure-to-pay (P2P) platform, is working to solve these issues for suppliers and providers alike, helping to unlock working capital in healthcare supply chain with its new Cash Flow Optimizer (CFO) technology.
Remitra® CFO enables finance leaders on both sides of the healthcare supply chain to optimize their payment cycles, which could generate working capital. When predetermined conditions are met, Remitra® CFO offers fast-term, aggregated payments to suppliers while extending payable timelines for providers.
Remitra® CFO also streamlines the dispute management process by stepping in as a single point of contact when match exceptions between providers’ purchase orders and suppliers’ invoices occur. Match exceptions pull invoices out of the normal processing queue, delaying payments to suppliers and delaying shipments of supplies to providers.
Here’s how suppliers can get ahead with Remitra® CFO:
- Reduce Days Sales Outstanding (DSO) and Past Due AR – DSO is the length of time it takes a supplier to get paid, which is governed by the time it takes a provider to pay its invoices. Late payments contributing to past due AR are a real problem for suppliers, with 66 percent of those responding to a recent Remitra® supplier survey saying it’s their number one pain point. Remitra® CFO helps suppliers get paid on time every time by aggregating and making payments to suppliers on the behalf of participating providers.
- Increase Predictability of Cash Flow – The Remitra® survey cited above also revealed that the inability to see where invoices and payments are along the P2P continuum is a major source of frustration for suppliers, with 27 percent of those surveyed reporting that the resulting ‘cash flow unpredictability’ is highly impactful to their businesses. Remitra® CFO provides the visibility suppliers need with one centralized location to view the status of payments and invoices.
- Achieve Productivity Improvements – Remitra® CFO delivers one payment that’s digitally enhanced and integrated into the supplier’s enterprise resource planning (ERP) system. This eliminates the burden of suppliers receiving several thousand paper checks and credit card payments that need to be manually processed, freeing up AR staff to focus on more value-add activities.
Here’s how providers can get ahead with Remitra® CFO:
- Extend Days Payable Outstanding (DPO) – DPO is the length of time it takes a provider to pay its invoices. According to a recent Remitra® provider survey, the majority of providers, regardless of size, have DPOs that exceed contract terms (net 30 in most instances), leading to extended DSOs for suppliers. Remitra® CFO can make payments on behalf of providers within contract terms, extend their payables timelines by up to 30 days and reduce the number of payments across multiple suppliers. This gives providers additional bandwidth to maximize their working capital rather than paying by the contract date.
- Improve Supplier Relationships – The easiest way to improve supplier relationships is to make timely or early payments. Healthy vendor relations ensure a smooth and secure supply chain as well as help to increase trust and reduce friction between parties. With Remitra® CFO, interfacing with suppliers becomes smoother and consistent alongside faster, cleaner and more efficient payments.
- Avoid Credit Holds and Strengthen Supply Chain Resiliency – When suppliers aren’t paid on time, providers are put on credit hold, which has a direct impact on their ability to provide patient care. Remitra® CFO helps to eliminate the problem of late payments, keeping the flow of critical supplies from suppliers to providers on schedule so that health systems’ supply chains can remain robust and care delivery isn’t negatively impacted.
The New Horizon in Supply Chain P2P
It’s time for simplification, accuracy and efficiency in healthcare P2P. Streamline your efforts while optimizing working capital for future growth opportunities by taking advantage of:
- Payments made when predetermined rules are established by suppliers and providers.
- Payment cycles optimized simultaneously for both suppliers and providers.
- Aggregated payments that are digitally enhanced and consolidated.
It’s time for Remitra® CFO.
For more on this topic:
- Check out the power of Remitra® and see how its full suite of automated financial solutions built for healthcare can benefit your organization.
- Learn how AP automation is driving savings, revenue and more in healthcare supply chain.
- Discover five reasons to go digital with your supply chain payment methods.
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