Case study: Saint Clare's Hospital looks to the future with SoftCo AP
Like many US healthcare organizations, Saint Clare's Hospital in New Jersey operates in a complex and challenging financial environment. Comprising of four hospitals and over 50 offsite facilities, including counselling and rehabilitation centers, the hospital has done extensive work over the past six years to bring itself from a deficit position to a financially sound footing. As part of a drive to improve its business, the hospital decided to eliminate the inefficiencies in its accounts payable processes and chose SoftCo AP as its solution.
Saint Clare's Hospital is part of one of the foremost Catholic Healthcare Systems in the US, and in line with its motivation to deliver excellent care to its clients, it has continued to invest in its facilities, including capital investments such as a premier Maternity Unit in Denville and a $2.5 million improvement of its emergency room in Sussex. Just as important as its client-facing facilities are its back-office operations; recognizing that it could improve its business by eliminating significant delays in its Accounts Payable processes, the hospital went to market to seek a solution.
We've earned $235,000 since October, just by keeping our money in the bank longer, earning interest. SoftCo has actually given us the time to improve our business processes.
St. Clare’s Hospital
Each year Saint Clare's handles approximately 50,000 supplier invoices for medical supplies, office supplies, and "everything that keeps a hospital running," explains Pamela Gallagher, Director of Finance for the hospital. Vendors submitted their invoices not to a central facility, but to whichever department they dealt with. This arrangement led to significant delays in securing payment, while invoices were routed for checking and approval before settlement. Paper invoices were also often photocopied, leading to further confusion.
"It was just a quagmire of paper," recalls Pamela. "We were spending a fortune on interoffice envelopes and delivery." The situation had become intolerable, as the hospital faced not only strained relations with suppliers, but also late fees where payment terms had been exceeded. "In some cases, where an invoice had become delayed internally awaiting approval by an authorized staff member, delays for suppliers could literally be months," Pamela said. "We had to find a solution."
SoftCo AP - the power and flexibility Saint Clare's needed
In seeking an answer, the hospital wanted to automate its Accounts Payable processes and make them paperless. After considering its options, the hospital rejected a number of providers whose solutions and pricing were centralized around scanning, where the hospital would gain a discount based on a higher volume of paper invoices scanned. However, the hospital wanted to decrease its paper overall. SoftCo AP not only offered the functionality that the hospital wanted, but was also more flexible and better value, providing a solution based on Saint Clare's needs, rather than simply on the amount of paper processed.
"Our volume of paper invoices is going down," she said. "That's a big reason why we wanted to use the SoftCo system, because it doesn't tie us into scanning everything forever."
Pamela said that SoftCo AP has now dramatically improved the business processes behind the hospital's Accounts Payable department. Invoices are submitted centrally to Accounts Payable rather than to individual departments, and are scanned on receipt. The subsequent process of invoice approval is no longer done via hard copy, but electronically, allowing authorized personnel to view and approve supplier invoices, or forward the invoice to a superior if required. Payment times for suppliers have been substantially reduced, and Accounts Payable personnel can quickly see where any invoice is in the approval process.
The SoftCo people have a vast amount of best-practice knowledge to give us, not only on how to streamline our business processes, but also about internal controls, government policies about document retention.
St. Clare’s Hospital
SoftCo AP has also earned a hugely positive response from the users. Many of the Accounts Payable personnel are among the hospital's most senior employees, accustomed to long-established ways of working, but the change management aspect of implementing SoftCo AP was relatively painless for all concerned. Staff were immediately won over by the SoftCo system, Pamela says, thanks not only to the friendly and user-centric training sessions, but also because they could clearly see the benefits SoftCo offered, making it easier to get their jobs done.
"This has really hit home with our people - it's now so much easier to answer a question that comes in by phone, whether it's directly from a supplier or from one of our internal departments," Pamela explains. "Before, it wasn't easy to answer those questions about where an invoice was, and why it hadn't been paid. Now everything is so much clearer, which makes everyone's job easier."
The management information provided by SoftCo AP is also extremely valuable. All staff members have a financial approval limit, which means they cannot authorize an invoice above that ceiling. It is now easy to see where, for instance, a person is forwarding invoices for higher approval and decide whether their threshold must be increased.
"It's wonderful - talk about having information at your fingertips," Pamela said. "The SoftCo system really forces you to have better efficiencies because it allows you to identify this hierarchy of authorizations. We can now work in a way that makes sense, instead of just doing things in a certain way because that's how they've always been done."
The efficiencies of SoftCo AP have also allowed Saint Clare's to do more with less - one employee who has retired did not need to be replaced. But perhaps most importantly, SoftCo AP has given the hospital Accounts Payable department time, to find other ways to save the organization money.
"We always knew it was possible to save money if we could pay more vendors by credit card, but you have to have the time to sit down and identify the vendors who can be paid this way," Pamela explains. "That's what SoftCo has done - we have more time now to address other concerns because we're not manually matching invoices. We've identified more vendors who we can pay by credit card, and this increases the ability to more effectively manage cash flow. We've earned $235,000 since October, just by keeping our money in the bank longer, earning interest. SoftCo has actually given us the time to improve our business processes."
SoftCo - a full-service partner
As a technology partner, SoftCo also earns highest praise from the hospital. "They're absolutely wonderful to work with," said Pamela. "SoftCo met our needs, they didn't just say, 'This is our product and this is the way we do things,'" she said. "Also, the SoftCo people have a vast amount of best-practice knowledge to give us, not only on how to streamline our business processes, but also about internal controls, government policies about document retention." She said the system has been so successful at Accounts Payable that the hospital is now exploring how it might use SoftCo technology to comply with Sarbanes-Oxley and other regulatory requirements.
"It's obvious that this technology is perfect for any process that needs to be monitored and documented," Pamela says. "The SoftCo technology has provided the tools we need here in finance, and it's flexible enough that it may be able to handle a lot more for the hospital, as well. It really brought us into the 21st century."
SoftCo AP for Saint Clare's Hospital
Using SoftCo AP, the hospital has transformed the efficiency of its account payable processes:
- Vendors are instructed to send their invoices directly to Accounts Payable
- AP staff pre-sort invoices prior to scanning and scan all invoices themselves.
- Invoices are automatically routed to the correct personnel for electronic checking and approval. The integrated permissions functionality of SoftCo AP simplifies the authorizations process, since invoices are easily sent to a higher-level staff member for sign-off.
- SoftCo AP has given the hospital unprecedented visibility into its account payable processes. "We can see where everything is in the system and where the hold-ups are, where invoices are awaiting approval," says Pamela Gallagher, Director Finance for Saint Clare's Hospital.
- Payments delays of up to several months have been totally eliminated.
- SoftCo has freed up significant time for AP staff, even after the departure of one member, who retired. This free time is being used to identify and approach vendors who can be paid by credit card, allowing the hospital to make money by gaining additional days' credit.