The senior living industry was one of the industries hit hardest by the pandemic, and it still hasn’t completely recovered, as you know. Staffing shortages, rising inflation, construction costs, wage and interest rates and thin operating margins are still affecting operators.
Due to staffing shortages, many communities have been forced to limit resident move-ins, and in the most severe cases, communities have closed. When a community has financial pressures, it can be left with few resources to make investments in employees.
Recent statistics from the National Center for Assisted Living indicate that assisted living is expected to see an increase in the number of residents, based on the numbers of aging Americans and the growing need for high-quality services and care.
In addition to macro changes affecting the sector, finance teams are experiencing other “pain points” every day, such as:
- Paper-based documentation: In addition to requiring physical storage space, paper invoices and documents easily can get lost or misplaced, leading to delays in processing payments and difficulties retrieving information.
- Inefficient invoice processing: Manual data entry of invoice details is time-consuming and can result in mistakes in payment amounts or vendor information. Also, matching invoices with purchase orders and manually receiving documents can be tedious and error-prone, leading to payment discrepancies and disputes.
- Lack of visibility and control: Tracking the status of invoices and payments becomes challenging without a centralized system, leading to delays and difficulties in managing cash flow. Real-time visibility is important to identify bottlenecks in the accounts payable process and address them before payment deadlines are missed and relationships with vendors are strained.
- Compliance and regulatory requirements: Providers have specific regulations and reporting requirements related to resident billing, reimbursements and other financial aspects. Manual processes can be more challenging to accurately track and document the necessary information, increasing the risk of noncompliance or audit failures.
- Limited scalability: As senior living communities grow and add more residents, vendors and services, manual AP processes become increasingly complex to manage effectively. Hiring additional staff members to handle the increasing workload can be costly and add to the risk of errors and delays.
- Manual approval workflows: Routing physical documents for approvals can introduce significant delays, especially if approvals must go through multiple individuals or departments. Also, the lack of automated approval workflows can result in lost/misplaced documents and confusion regarding approval status.
- Audit and reporting difficulties: Generating accurate and detailed audit reports, along with retrieving data from various sources and consolidating information manually, becomes time-consuming and error-prone.
Here’s some good news: accounts payable automation is helping finance departments nationwide cure the “manualitis” caused by the physical handling of paper invoice and payment processing.
By implementing finance automation technology, providers can streamline processes and eliminate manual work, allowing them to regain control of the workload. Below are four ways that automation can provide relief to above-mentioned pain points.
- Increased efficiency:
AP automation eliminates manual and time-consuming tasks, empowering employees to focus on strategic and meaningful work. By automating repetitive tasks, team members also can achieve a better personal/professional life balance, ultimately preventing burnout and fatigue. Also, employees can give their time and energy to engaging and fulfilling, high-value tasks that require critical thinking and problem-solving and present the opportunity to collaborate with others throughout the enterprise.
2. Fraud prevention:
According to a 2023 report by the Association for Financial Professionals, 65% of organizations surveyed experienced attempted or actual fraud activity in 2022. There’s no doubt that fraud is stressful, but AP automation can reduce anxiety by helping an organization:
- Go paperless – Paper checks are a major security hazard and easy for fraudsters to intercept.
- Achieve greater security through encrypted account data and multi-factor authentication.
- Improve internal controls and transparency.
Additionally, best-in-class payment automation providers offer Positive Pay, a service that matches the account number, check number and dollar amount of each check cashed at no charge to the customer. Payee Positive Pay, which also matches the name of the individual or the organization that the payment is meant to go to, also is provided.
3. Enhanced visibility and control:
AP automation provides real-time visibility into all invoices and their approval statuses, making it easy to track the status of the invoice and take advantage of early payment discounts. Moreover, AP automation provides expanded reporting capabilities such as payment history reports, archived documents and a payment status report, giving users 24/7 access to detailed financial information. Heightened visibility helps AP departments eliminate bottlenecks, monitor cash flow and identify gaps that need improvement. Lastly, automation improves compliance and simplifies audits by maintaining accurate records of all transactions.
4. Improved accuracy and error reduction:
Manual data entry is prone to errors, often causing additional work and frustration for employees. Leading invoice automation solutions leverage innovative technology, such as Amazon Textract, for improved accuracy. Intelligent data capture reduces processing time and errors, creating better accuracy. Employees can avoid the fatigue caused by fixing mistakes, resolving payment discrepancies or consoling angry vendors by automating AP and minimizing errors.
In the rapidly changing business landscape, automating the AP process is critical. Implementing finance automation eliminates outdated practices, drives overall success in the AP department and gives essential businesses such as senior living communities a competitive advantage so they can thrive.
John Zaudtke is vice president of sales at Paymerang, a Richmond, VA-based firm specializing in finance automation solutions. Paymerang provides a streamlined invoice and payment automation platform that brings accounts payable departments into the modern age.
The opinions expressed in each McKnight’s Senior Living marketplace column are those of the author and are not necessarily those of McKnight’s Senior Living.
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