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How automated invoice processing saves time and money

By Rusty Zosel on Wed, Jun 13, 2012 @ 11:00 AM

iStock_000009700656XSmall-resized-600I would like to introduce Rand Johnson as the author of this, our latest blog. With over 33 years in Long Term Care serving in such roles as administrator in facilities ranging in size from 35 beds to 388 beds, consultant, Senior Vice President of a prestigious LTC-focused reimbursement consulting firm, and Marketing Director for Prime Care Technologies, Rand contributes a broad as well as deep perspective to our team of bloggers. In today’s blog, Rand focuses on how automated invoice processing saves time and money. While he addresses LTC in particular, the content can readily apply to any business.

With a slow economy compounded by increasingly restricted reimbursements, cash flow management for LTC providers is a must. To accurately manage cash flow, executives must be able to accurately track spend to date in order to reliably forecast future spending. Automated invoice processing enables providers to manage cash flow to the vendors/suppliers and to accurately track their spend in real-time.

I’ve been in the LTC business for a good looooonnnnng time starting in the days when expense management was disjointed and departmentalized. Everything was by hand - the creation of purchase orders, the weekly calls to the vendors to place orders, the creation of endless forms and reports, the weekly spend-to-budget “fudge-it” reports (Really, how many actually reconciled these reports with the general ledger? Who had the time?), the handling of reams of POs attached to the invoices, the batching of same to be shipped to the corporate office, etc. Every link in the chain was under such a strain that a break was not an “if,” but a “when.” It was laborious at best and rife with risk for errors and unpleasant surprises. (I’m sure some administrators remember finding a batch or two of invoices which had yet to be processed in the former Business Office Manager’s desk drawers. That’s the stuff sleepless nights are made of.)

Those days are and should be long gone – a necessary evil in the evolution of business office workflow management. There is hope and it’s called automatic invoice processing. And it’s available today. The IT revolution has become more than data processing. In reality, it is a useable and useful tool especially in the form of procurement automation. Here are some of its features with their explicit and implicit benefits. Automated invoice processing:

  • Automatically tracks spending for proper accounting, real-time reporting, accountability, and spend forecasting
  • Affords complete control of invoice processing – you set the rules, such as approvals, contract compliance, workflow, etc.
  • Delivers time and money savings - because the process is fully automated, it requires little to no manual steps in the workflow
  • Reduced processing errors – the less humans are involved, the fewer the errors
  • Automated processing of all types of invoices

Automated invoice processing also facilitates and reports on reconciliation of invoices to purchase orders and contract terms. It also aids in the tracking of back-ordered items and only paying for what you receive.

As I mentioned earlier, the automated payment process is not dependent on human intervention with its inherent distractions and shifting priorities which are too often moving targets. Invoice processing is automatic, reliable, and - through its reporting features - actionable as needed.

You should really look into and consider automated invoice processing to save time and money, to reduce errors, and to get some much-needed restful sleep. You owe it to yourself.

Topics: Procurement Automation, automated invoice processing

Leverage B2B e-Commerce through Information Sharing

By Rusty Zosel on Mon, May 28, 2012 @ 09:00 AM

iStock_000019640264XSmall-resized-600B2B e-Commerce or e-Procurement is here to stay. Vendors and buyers alike who leverage the power of e-Procurement receive numerous benefits including, among others:

  • The elimination of manual processing and B2B processing cycles
  • Elimination of Dual-Data Entry (DDE)
  • Improved data quality and movement, data mining, and real-time reporting
  • Improved demand and supply forecasting
  • Management of complex logistics operations
  • Improved cash flow
  • Better management of contracts
  • Improved communications between business partners

Acknowledging that B2B e-Procurement is the wave of today’s procurement practices, I’d like to revisit a topic mentioned in an earlier blog, the Patronizing Partnership, the best way to leverage B2B e-Procurement. The ideal relationship between vendor and buyer is a partnership that is mutually beneficial. In this kind of a relationship, both parties work to ensure that each financially benefits; the vendor makes money and the buyer saves money. In a Patronizing Partnership, buyers and vendors tie their procurement goals together based on economic outcome, coordination improvement, and process collaboration. These goals have energized the B2B eProcurement wave.

A key component of B2B eProcurement is information sharing in which both buyers and vendors alike can readily share information about the entire transaction process from the time the PO is created on line, the order is approved, placed, received, and acknowledged to the time when the item is shipped, received, invoiced, entered into the GL, and paid. During this process, feedback about product quality, contract consistency, and delivery, among others go both ways. In the book, The One-Minute Manager, Ken Blanchard writes that feedback is the breakfast of champions. By sharing information, vendors improve customer service and both parties improve the quality of their relationship and cooperation. Both are winners. Information sharing also champions a high level of trust and performance expectations, because it makes the entire procurement process transparent. 

Leveraging the power of information sharing through B2B e-Commerce, vendors and buyers are able effectively to create and strengthen a Patronizing Partnership which is financially mutually beneficial. 

How has B2B e-Commerce benefitted your company?

Topics: Procurement Automation, cost saving, information sharing, B2B eCommerce, eProcurement, procurement process

Vendors Save with Business-to-Business Procurement Automation

By Procurement Partners Staff on Fri, Apr 20, 2012 @ 10:00 AM

iStock_000014716574XSmall-resized-600If you’re a vendor providing suppliesfor health care facilities, schools, or hotels, it can be a challenge to keep up with all the various aspects of your business. You have to find new customers and take care of your current ones, all while trying to keep your prices competitive and your costs under control. 

Meanwhile, you’re dealing with thousands of purchase orders, invoices, and other transactions each year. The procurement process can be very complex, especially as your business grows and develops. Business-to-business procurement automation can simplify your distribution process while saving you money.

What exactly do we mean by “automation”? Are we suggesting that you hand over control of the entire process? 

Not at all. Think about it in terms of an automobile. A car has all sorts of automated parts. But cars can’t drive themselves. (At least, not yet!) A car still needs someone to be in control and make the decisions about steering, accelerating and braking.

There’s no one-size-fits-all solution for every vendor, or even for each one of your individual clients. We understand you need a system that is adaptable, flexible, and customizable to meet the needs of your growing business and your various customers. That’s why we've built numerous customizable features into our innovative automated solution. And you can always add or change features quickly and easily.

Procurement Partners is committed to bringing value and savings to our vendor partners. Working together, we can create a positive ongoing commerce experience for you and your customers. Our tools, information, and automation can help promote communication and accuracy between you and your clients while increasing your sales and lowering your costs. 

With Procurement Partners, you are always in the driver’s seat, but we’re there to help keep things running efficiently. Contact Us to learn more.

Topics: Procurement Automation, business-to-business procurement, procurement automation best practices

Making the most of Medicare cuts – back to the basics (Part 2)

By Rusty Zosel on Wed, Dec 28, 2011 @ 09:00 AM

iStock_000016260459XSmall-resized-600In Part 1 of this two-part blog, I shared with you critical procurement savings opportunities which you and your company can employ. I continue in Part 2 with this valuable list. Again, I use much of the content found in the on-line article,Procurement Savings – Ways to Increase Your Profits, because it does such a fine job of highlighting what we promote to all of our Buyer partners. I have somewhat paraphrased the list for this blog.

Savings Opportunities Continued

8. Review replacement strategies. 
Item renewal or replacement should be based on necessity, not routine replacement. This may fly in the face of some routine maintenance “best practices,” which in better times, to be honest were more for convenience than savings. Having said that, take care to factor in the cost of waiting for a replacement. While replacing an important machinery part on a regular basis may be necessary, it is not necessary to replace most lights before they fail.

9. Put correct management controls in place.
This is particularly the case for Ad Hoc purchases. Are the right people ordering the rights supplies for the job at hand? This should reduce excess or incorrect purchasing.

10. Train, train, train.
Training your staff on cost-effective purchasing and encouraging them to save money whenever possible can yield significant savings without sacrificing the services your company provides.

11. Computerize the purchasing process.
Procurement automation enables you to consolidate the practices mentioned above and to realize real-time compliance and cost performance. Refer to my earlier blogs about procurement automation and eCommerce Evolution.

12. Link the purchasing system to the inventory and accounting systems. 
From PO creation, to order approval, placement, receiving, verification, and accounting, procurement automation can greatly reduce errors, improve efficiency, and save money.

13. Use procurement automaton to be quicker and to reduce communication costs. 
Purchasers can readily access supplier catalogues and comply with the choice of products that may lead to purchase savings.

14. You may want to consider centralizing disparate purchasing functionalities where it makes logistical sense, which allows for savings in staff, processes, delivery charges, and technology.

Question: What other practices have you discovered that have helped you, or you anticipate will help you, realize sustainable savings?

Happy New Year and may 2012 be a banner year for your team!

Topics: Procurement Automation, computerized purchasing process, train, centralize purchasing, management controls, replacement strategies

Making the most of Medicare cuts – back to the basics (Part 1)

By Rusty Zosel on Thu, Dec 22, 2011 @ 08:00 AM

iStock_000016349390XSmall1-resized-600The impact of the 11.1% cut to Medicare reimbursement on long term care providers across the country has been substantial. With revenues down margins are tight, very tight. To discover ways to reduce waste and get the most from the dollar expended, providers are examining every facet of their operations, including procurement. While labor may represent the bulk of its expenses, a company also needs to review its procurement practices, contract terms, pricing points, and price protection regularly. In this day and age, every penny counts.

In the this first of a two-part blog, I'll share with you some salient savings opportunities that we recommend and which are concisely mentioned in an article I found recently online, Procurement Savings – Ways to Increase Your Profits. I’ve somewhat paraphrased the content.

1. Review supplier’s terms and discounts.
You should have a Master Agreement with all suppliers. As partners, you and your suppliers may achieve procurement savings by altering your purchasing patterns. By purchasing slightly more products less frequently, you may automatically receive a better discount.  If you are using outside contract management or GPOs (Group Purchasing Organizations), you may also want to review those resources and any agreement they have with you, along with their contracts and pricing with the vendors or product categories in which they are being utilized.  

2. Consolidate suppliers and deliveries.
Savings in delivery charges and the costs of accepting those deliveries can result when you consolidate deliveries. In some cases, it may make sense to consolidate what you purchase from which suppliers. It may be more convenient to purchase from a local vendor, however, like the neighborhood hardware store, “convenience” can become a black hole for your cash. Also, by consolidating suppliers, costs related to processing purchase orders and invoices can also decline.

3. Consolidate purchasing requests and intervals.
By consolidating your orders and reducing their frequency, you can reduce delivery and documentation processing costs.

4. Review purchasing requirements.
This ensures that only strictly necessary purchases are made. It will cut down on excess costs and storage costs.

5. Purchase from agreed catalogues.
Combined with #2 above, purchasing from catalogues specifically negotiated for your company containing specific brands or types of a product will result in savings. As mentioned above a greater volume of orders from one vendor can result in deeper discounts.

6. Review stock levels. 
With consolidation and the advice to buy in greater volume must be tempered by sound inventory control practices.

7. Review purchased products specifications. 
What may have been ideal a while ago may have been superseded by an item or class of items that function better at a cheaper price.

In Part 2, we'll conclude with the rest of these critical savings opportunities. In the meantime, I wish you and yours a very Merry Christmas!

Topics: Procurement Automation, Medicare cuts, consolidate purchase requests and intervals, consolidate suppliers and deliveries, purchase from agreed catalogues, review purchasing requirements, terms and discounts, review purchased products specifications, automated procurement process, raise stock levels

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