Why Medical Practices Are Streamlining Their Accounting Practices
Considering healthcare reform and a rapidly changing industry, medical practices have been streamlining their ever-more-complex finance and accounting practices, aiming to do more with less. They have had to find ways to make the most of financial resources while supporting a mission to treat patients with high quality, yet often exorbitantly costly, services. It’s no wonder that today’s cloud-based finance and accounting systems have become an important part of their operational solution.
Financial Management Trends in Healthcare
Let’s take a look at the state of the industry in the larger context to gain insight into the issues financial professionals at medical practices are confronted with. The Association of Accountants and Financial Professionals in Business (IMA) conducted a study to explore financial management trends in today’s healthcare industry. Their report notes that finance and accounting management professionals in the sector are being called on to “deliver more innovation, creativity, and ideas to help control and balance efficiency and quality,” and base their assessment on these key study findings:
- Finance and accounting executives are taking a lead role in integrating operations and finance. Nearly 70% of the CFOs surveyed report a broader role in strategic initiatives than in years past, and over 80% report greater frequency of interactions with the CEO and board finance chairs than in previous years.
- There is an increased focus on internal controls to protect against fraud and abuse. The report cites the Blue Cross/Blue Shield associations’ estimate that $50 billion (10%) of payments made from their organizations were for fraudulent payment.
- Finance and accounting leaders are using business analytics to improve their performance monitoring and management processes, with 91% of respondents using some form of performance scorecard.
IMA’s study concludes that while the “complexity of operations, financial transactions, and reporting, and the challenges of improving operational efficiency appear daunting,” they “pose a significant opportunity for the management accounting profession” in the industry. And what about the people managing finance and accounting at the medical practice level?
A Technology Solution for Medical Practices
It’s difficult to ignore the opportunity medical practices have to leverage technology to solve for these challenges—and to automate their processes for efficiency and gain the business visibility required to make operational improvements. But that’s exactly why Intacct’s leading cloud financial management and accounting software is being embraced by growing medical practices faced with the same challenges uncovered in the IMA study.
According to Intacct, healthcare companies transitioning to their software struggle with the following pain points prior to their switch:
- Limited access to reports and information to drive decision-making (64%)
- Inefficiencies due to a reliance on spreadsheets to support financial processes and reporting (55%)
- Difficulty in adapting their existing financial software to new business requirements (36%)
- Excessive manual data entry/re-entry (36%)
- Inadequate controls around their financial processes (27%)
Capabilities that drive decision-making, controls, and effective use of data intersect with the IMA survey trends, demonstrating the “whys” behind healthcare companies’ increased adoption of cloud-based financial and accounting management solutions.
Here’s a look at some of the Intacct features that are popular among healthcare organizations, including medical practices with busy back offices:
- Accounts Payable – your team will be able to automate your payment and vendor management processes, saving you time and money with the utmost control and visibility. What’s more, your data will be more accurate and easier to access for decision-making. Learn more in Supercharging Accounts Payable is as Easy as 1, 2, 3.
- Multi-Entity Consolidations – enables you to centralize and automate payables, which becomes increasingly important if your practice expands into new locations to serve more patients. Find out more about Managing Multiple Entities with Flexibility and Ease.
- Cash Management – removes the hassle of spreadsheets to manage your cash and working capital. You’ll be able to import statements from your financial institutions and automatically reconcile your accounts, manage bank errors, monitor for fraud, and more.
- Reporting and Dashboards – allows you to track financial and operational data, by business driver, for a 360-degree view of your business. And it’s customizable by kind of report, visualization, and other dimensions. This means you can make timely, strategic decisions in response to performance trends or new opportunities. Is Your Business Ready for More Powerful Reporting?
What’s more, moving to powerful cloud-based software will help your medical practice boost productivity without adding staff or increasing your budget. And it can actually save your practice money, as what you gain in efficiency and accuracy is magnified by how you use your extra time and money to grow your bottom-line. With the data and control required for more effective workflows across the finance and accounting spectrum, your office team will be able to focus on supporting your practice’s strategic direction—and what’s most important: your commitment to providing quality care to patients.