Even in the digital era, healthcare accounting has remained a largely manual process for many teams. While the advent of EHR and medical billing systems improved patient care and patient outcomes, many business administrators managing multiple offices still rely on paper processes, Excel spreadsheets, or entry-level accounting software.
They have to enter every vendor invoice and payment multiple times for each location and log in and out of many different databases to compile financial statements at the end of each month.
Fortunately, that's changing with new technologies that help healthcare accounting professionals work smarter and faster. Here are a few of the most transformative ones.
(See more healthcare accounting trends in our latest resource.)
Why is health care accounting important?
Healthcare accounting best practices are crucial to ensuring a strong cash flow, especially as your organization grows to include many locations.
Your accounting processes need to make it easy to manage inter-company transactions and track expenses across multiple locations, departments, and categories while complying with generally accepted accounting principles.
Healthcare providers also need to pay close attention to how financial transactions impact the patient experience. Patients have more choices when it comes to health care organizations, and they are more likely to choose one that gives them flexible payment terms and the ability to use convenient payment methods.
What technologies are transforming healthcare organizations?
Multi-entity healthcare accounting software
Healthcare organizations, pharmaceutical companies, chiropractors, and others are growing larger with an increase in industry consolidation. Physicians' groups that used to have one or two offices are expanding to become larger regional entities or adding specialty services. This complicates healthcare management.
Multi-entity accounting software eliminates the redundancy of entering the same information over and over for many locations. With a single database, you can easily share vendor information, manage accounts and balance sheets for individual companies or the entire entity, and create consolidated financial reports in minutes instead of days.
Automating healthcare accounting processes
Accounts payable is still a largely manual, time-consuming process for many health care providers.
A research report by the Healthcare Financial Management Association found 70% of healthcare suppliers still use paper-based invoices, which require review, approval, coding, matching and recording financial transactions in the company's general ledger.
Accounts payable automation can significantly reduce the time it takes to process invoices. Some AP automation software now includes AI invoice processing, allowing accounting teams to enter large batches of invoices at once, route them for approval and pay them. This can free up office administrators to have more meaningful interactions with patients, prioritize more strategic initiatives that can improve operations, and even reduce turnover by giving them more fulfillment in their roles.
Artificial intelligence and machine learning
AI and machine learning in are impacting nearly every industry including healthcare accounting, with the potential to automate many individual tasks. Healthcare companies are already using AI for data entry and verification, saving time and minimizing errors. More complex algorithms can identify patterns in healthcare industry financial data for better business intelligence.
For instance, a healthcare company CFO can use AI to examine historical data and predict which offices will have the highest volume and which services patients will use most often for smarter planning and budgeting.
One of the most promising use cases is the potential to automate repetitive accounting processes like accounts payable or accounts receivable. AP automation streamlines manual tasks like reading invoices and entering data. For healthcare accountants to make the most of AI and machine learning opportunities, CFOs and other healthcare executives and healthcare professionals need to educate themselves about technologies in the marketplace and work closely with their IT teams to implement them. They will also need to evaluate processes to determine where they can achieve the biggest savings of time and money.
Business intelligence tools
As healthcare companies look to achieve greater efficiencies following a merger or acquisition, we're seeing a greater emphasis on business intelligence solutions.
Having accurate financial information makes it easier to forecast how operational changes at specific locations will impact cash flow across the entire organization so you can make more informed decisions.
For companies with many locations, it's important to monitor cash inflow and outflow metrics for the enterprise as a whole as well as individual health care facilities. This ensures a healthy overall revenue or operating income isn't just a few well-performing entities masking the underperformance of others.
Patient payment portals
Mobile payments, digital wallets and blockchain technology are already changing the way consumers pay for services in other industries, and they are increasingly expecting these options in the healthcare sector.
Healthcare companies are taking heed of consumers' preferences, with 49% of provider executives who responded to a PwC survey citing customer experience as a top priority over the next five years.
Offering patients a wider variety of bill pay options means accounting departments will need to work closely with IT departments to set up online payment portals where patients can manage payments and see their billing history.
Stay ahead of the trends with Gravity’s healthcare accounting software
Staying up to date on the latest technologies in the healthcare industry doesn't have to be daunting when you have the right partner. Gravity's multi-entity accounting software is ideal for healthcare organizations or private equity firms with healthcare investments.
Built on the Microsoft Power Platform, Gravity is uniquely positioned to leverage the latest advancements in automation and artificial intelligence, from making it easy to create automated approval workflows to using AI-powered invoicing to save hours each month.
Gravity uses Microsoft Power BI to consolidate financial records, giving finance teams and investors real-time access to the insights they need to make smarter decisions.
Gravity Software is built on Microsoft's Security Development Lifecycle, making it HIPAA-, SOC 2- and SOC 3-compliant. Your team can set role-based security access and have full visibility into every activity with a comprehensive audit trail. As a cloud-based solution, Gravity's security features are automatically updated to keep up with the latest regulations and best practices. Gravity also offers role- and entity-based security access along with a full audit trail into every transaction.
Learn more about how Gravity Software can transform accounting in healthcare. Schedule a demo today.
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