US-based healthcare service providers can reduce bad debt risks by up to 20 per cent by using workflow solutions to enable users to access key data for the improvement of cash flow and operational efficiency. After an acquisition spree, Harvard Pilgrim Health Care, for one, integrated over 55 IT systems to improve its enrollment process and speed order-to-cash cycles while boosting its cash position by streamlining its accounts-receivable process. Moving to an online enrollment system helped HPHC to increase its cash on hand supply from 47 to 80 days, with 90 per cent of customers paying within one month of being billed.

Although HPHC’s problems with cash collection were not related to the accounts receivable department, its initial enrollment system had slowed the accounts receivable process. Clients were also updating the member roster by phone, fax, e-mail and snail mail, which slowed reconciliation and caused uncollected receivables to accumulate, but HPHC soon saw tangible benefits from its workflow solution. Within the financial sector, which is under greater obligation to track, reconcile and report its transactions, firms can save up to USD 3.5 million by reducing operating expenses and eliminating potentially lost revenues.

Organizations typically deploy workflow solutions over existing IT systems, and may automate payments by means of online invoicing or billing components. In such cases, flexibility over payments formats is necessary to optimize buy-in from suppliers and customers, who can see signing up as a prerequisite for immediate payments. To this end, HPHC advises that customers using e-payments will adhere to the same payment schedule as previously, and does not mandate that payments are electronic. Either way, online billing usage at trading entities has been proven to translate into improved order-to-cash processes.

(CFO Magazine)