Examining how to turn AP departments into revenue centers and sources of strategic advantage.

Maximizing Supplier Participation in Your ePayables Program: The Importance of Multiple Payment Methods

For many years, we have been hearing that electronic payments (ePayables) will soon make paper checks obsolete. Unfortunately, the healthcare industry is progressing very slowly toward a paperless payment process. The fundamental reason why ePayables programs suffer from low supplier participation, which consequently forces hospitals to rely on paper checks, is the lack of payment method diversity offered to suppliers.

I travel around the country visiting hospitals, many of which have put in place ACH programs or ghost-card programs. Yet I am consistently amazed at how low the supplier participation is in most ePayables programs. Moreover, I am baffled by the complacency of hospitals that are willing live with underperforming ePayables programs.

Why do hospitals suffer from low supplier participation and underperforming ePayables programs? The simple answer is that many hospitals focus on a single payment method in their ePayables program. Many fall into one of two traps: they build an ePayables program around the commercial-card solution offered by their treasury or the provider of their travel and expense cards; or, they rely on a payment services provider that solely offers ACH payments.