As new technology develops and affects every aspect of our lives, integral business operations, like the accounts receivable process, are changing, too. Digital innovation has transformed the accounts receivable process from an old-fashioned paperwork and mailed bills process to an all-digital, and in some cases, AI-assisted process. Let’s take a look at how this process has changed, the benefits and challenges, and how you can get help upgrading your billing processes.
What is the Accounts Receivable Process?
The accounts receivable process essentially encompasses the different steps and actions taken to invoice and receive payments from customers. Someone decides to buy a good or service, and they need to pay the provider in exchange for the good or service. That process of obtaining the payment that is owed by the customer is, in a nutshell, the accounts receivable process.
What is New With Digital Accounts Receivable?
Changes in technology have changed the way payments are collected from customers, and in the healthcare industry, from patients. Not only are invoices now sent out electronically, payment is even collected online. Many companies will outsource their medical billing to take advantage of the latest technology and staff that’s trained and current on the latest regulations. Whether you choose to outsource or keep billing in house, there are changes to new digital accounts receivable processes.
Old Process
Previously, businesses offering goods and/or services to customers would generate a bill or invoice that would then be provided to the customer, typically by mail. The customer would then have to mail back their payment to a payment processing facility, or in some cases, to the provider’s office or facility directly.
New Process
The new processes for healthcare facilities have changed tremendously as digital innovations have updated every aspect of revenue cycle management. In fact, it is one aspect of business operations that CFOs are making a priority to digitize. Current accounts receivable processes include digital invoicing and payment collection, the use of an online payment portal, and seamless digital payment options. Many practices are also moving to electronic health records, which can tie into a digital accounts receivable process.
Benefits of a Digital Accounts Receivable Process
There are a number of benefits to digitize your accounts receivable process, including efficiencies in billing processes, increased customer satisfaction, faster payments, and better reporting. Additionally, working with a company that is well versed in providing technological solutions to the healthcare industry can position your practice to succeed and truly take advantage of the benefits afforded to those who utilize a digital accounts receivable process.
Efficient
A digital accounts receivable process is typically more efficient than a paper method because invoices can be generated and sent sometimes immediately after another digital process is complete due to the way the portal is coded. Payments can also be collected online, which means a more efficient process overall. With online payments, the time required for a payment to physically reach the facility by mail and the time for the check to be processed, deposited, and cleared is all but eliminated. Overall, this leads to a more efficient accounts receivable process.
Customer Satisfaction
When was the last time you wrote a check or mailed a bill? These practices are quickly becoming obsolete, which means that many customers are used to paying bills online. Invoices and bills from services in the healthcare industry are no different. Many customers report increased satisfaction with being able to use an online or instant payment. It’s easier, more convenient, and quicker for both the practice and the patient.
Faster Payments
Collecting payments is often one of the biggest hassles for medical providers, especially when a patient or customer is not expeditious in releasing payment. With digital payments, patients can easily pay online without the hassle of mailing a payment. This means there is a better opportunity for payment to be processed faster.
Better Reporting
Having a digital interface for accounts receivable will typically provide access to more comprehensive reporting. These reports can help give providers a snapshot of how much you are collecting, where you need to improve, and have a better idea of your profit margins along with other KPI metrics.
Challenges of a Digital Accounts Receivable Process
While the digital age is certainly making significant improvements in businesses, healthcare practices, and more, there are some challenges with turning to a digital accounts receivable process. Although these challenges must be addressed, and practice managers should be on alert for these potential issues, they are often able to be remedied without a major negative impact to the practice.
Errors
Although having invoices automatically generated and payments received digitally, there is still room for error. Incorrect coding can result in errors that can cause trouble later on, so it is important to still have someone review the accounts receivable processes to look for errors and to correct them. Double-payments or duplicate invoices are also common challenges.
Human Element
With an all-digital process, the human element is taken away. That may mean that in some cases, personal discretion and compassion are lost. While that may be great for keeping payments flowing, it could result in lower patient satisfaction. Additionally, in some cases, compassionate measures that a practice might otherwise allow, such as splitting a larger payment up into smaller, more manageable payments or waiving bills, will not be put into place.
Security
As with any digital payment, security should be a concern and at the forefront of any digital process changes. Having patient information secure, ensuring that payment transactions are processed securely, and having ample protection from security breaches caused by hackers are all challenges that can affect those with digital accounts receivable processes.
Get Help Implementing a Digital Accounts Receivable Process
Tackling changing your accounts receivable process can be a challenge, and it’s often best left to the experts. If you’re interested in updating your accounts receivable process to transform the way your practice handles payments, contact us at Credence Global today to learn what we have to offer and how we can help your practice take advantage of innovative technology!
