Whether you are a single site skilled nursing facility or a retirement community with hundreds of buildings, your purchase-to-pay process could probably use some fine tuning and automation. Perhaps it’s even in need of a complete overhaul. If you are looking to get the most out of your purchasing and invoice process, then you’ve come to the right place.
We'll use one of our favorite solutions, PointClickCare, as a model for this process.
There are several systems on the market today that have developed applications, which are a bridge between your internal accounts payable software, the buyers in your facility, and all of the vendors that service you. They do this by allowing you to setup all of your vendors and rules in one central portal.
Here you can define things like GL coding for the vendor, and note details such as the type of product being ordered. You can also pre-define allowable products to purchase from a vendor, which enables you to start doing volume purchase negotiation. The beauty of this type of system is that once the rules are built, it’s all automated.
Ultimately you can reduce the need to manually handle purchase requests and invoices, thereby reducing overall accounting efforts. By using a procure-to-pay system, you can streamline data entry and fully automate 65-70% of all invoices received in your facilities.
Let’s outline the typical steps of a purchasing system, and how an automated solution can help each step of the way:
Figure A: Typical Procure-to-Pay Process Steps
Step 1: Order
At this stage, individuals in your community have purchase requests. With a procurement solution, you can:
- Collect those requests centrally.
- Define multiple methods of processing requests/orders, such as providing an online hosted catalog of vendor items to choose from, with browse and search capabilities.
- This simplifies the buying process, allowing you to control the items buyers in your facility can purchase from a selected list of inventory items from the vendor, if needed.
- This can help with negotiating vendor pricing due to volume purchasing.
- Bring up both recurring and past orders to simplify a reorder process.
- Create a shopping cart experience for buyers.
- Define automated built-in GL coding by vendor, item or end user, eliminating the need to manually code an order.
- Allow an electronic place to record both internal company notes that might only need to be seen by approvers, as well as notes to the vendor regarding the order/request.
- Allows buyers and approvers to see the impact a request/order will have on the GL line item budget right at the time of the request, or during the approval process.
- Build customized business rules for handling orders, such as notating the agreement of free shipping from a vendor.
- Once entered, an order automatically enters the order approval workflow process, and an email is sent to the approver(s) with an electronic copy of the complete request for sign-off.
Step 2: Order Approval
The approval workflow is very robust in an automated procurement system, which allows:
- Multiple approval options, where you can:
- Approve through email or via a mobile app.
- Have different approval methods based on various criteria such as vendor, GL coding, user, location, dollar amount, etc.
- Define multiple steps of the approval process.
- Outline instances where no approval is required (e.g., certain requests by order with a certain job title might not need approval).
- Completely customize the approval workflow for each facility.
Step 3: Order Sent to Vendor/Order Shipped
Once approved, an order is automatically sent to the vendor for processing using any method the vendor accepts.
At this stage you can:
- Send the information electronically via EDI or cXML.
- Contact the vendor if you need a copy of the order.
- Instantly receive updated automated notifications of the order status, such as an item begin back-ordered, cancelled or shipped.
Step 4: Order/Invoice Received
In this step the order has been sent to the vendor, the items have been shipped to us, and we are ready to receive the invoices electronically.
Invoices from vendors can be received/input in various ways. Here you can:
- Setup a different email for each community designating where vendors send their invoices, thereby eliminating paper invoices. An image of the invoice is automatically attached for view later.
- Alternatively, the vendor can enter the invoice into a provided portal.
- Automate 60-70% of invoices that typically would require manual intervention without a solution.
Don’t fret! Invoices can still be entered manually.
- If you receive a manual invoice, you can take a picture or scan the invoice manually and enter it into the system.
- Many solutions now have OCR (optical character recognition) functionality.
- OCR allows you to scan an invoice where the software will find the data elements which include the invoice number, date and amount, and will key the invoice automatically without user invention. Different templates can be setup for vendors to accommodate various invoice formats.
Step 5: Invoice Approved
There are multiple approval options, which include:
- Different approvals based on vendor and/or location.
- Approval amounts on dollar figures.
- A multiple step process.
- A no approve option.
- The option to receive notifications and reminders for invoices not approved.
- GL coding, where you can split across multiple GL codes.
Step 6: A/P Ready — Invoice Sent to AP for Payment
- Approved invoices are sent electronically to PointClickCare (PCC) Accounts Payable for payment. There is no need to re-key. Many solutions can import into other accounts payable systems as well if you are not using PointClickCare for AP.
- Approved invoices can be sent to PCC on a set schedule (such as hourly, daily, weekly, etc.) or manually imported with a few clicks directly into PointClickCare Accounts Payable for payment (or other accounts payable packages).
As you can see, the procure-to-pay process has several steps that eliminate a ton of otherwise manual processes.
Two solutions that PointClickCare suggests, that have been proven to work with their software successfully are:
- Procurement Partners: Ideal for single community/single facility and upward.
- DSSI: Ideal for a minimum of communities with 10 buildings and 1,000 beds.
Need Help?
Interested in seeing a system like this in action? There are many solutions on the market today that you can review. Contact us online or call 410.685.5512.
