In the realm of health systems, operational efficiency is paramount, and the accounts payable (AP) process is no exception. As organizations seek to scale their AP operations, Electronic Data Interchange (EDI) and Commerce eXtensible Markup Language (CXML) invoices have emerged as enticing solutions. However, the reality is far more complex than the promises of automation. In this post, we'll explore why healthcare organizations often struggle to scale AP using EDI and CXML, shedding light on the pitfalls, challenges, and the true path to effective AP automation.
EDI and CXML: Beyond the Hype
The allure of EDI and CXML lies in the concept of digitizing invoices and automating processes. These formats hold the potential to streamline data exchange between healthcare institutions and their suppliers, enabling faster invoice submission and reducing manual data entry. However, the devil is in the details.
The Myth of Error-Free EDI and CXML Invoices
Contrary to popular belief, EDI and CXML invoices aren't infallible. Many healthcare organizations discover that these formats often contain incorrect or incomplete data, requiring manual intervention for proper matching, validation, and reconciliation. In fact, some companies report error rates of up to 40% in their EDI invoices. The promise of automation turns into a frustrating reality as internal AP clerks are burdened with correcting errors, essentially negating the efficiency benefits.
Not True Automation: Just Invoice Digitization
Implementing EDI or CXML doesn't equate to achieving true AP automation. While these formats do digitize invoices, they fall short in addressing the complexities of the entire AP process. The need for matching, pairing, and buyer review remains, consuming precious resources and time that could be better utilized elsewhere.
Supplier Conundrum: Longtail vs. Large Suppliers
Leveraging EDI or CXML is a strategic move, especially when dealing with major suppliers. However, the challenge arises when dealing with the longtail of suppliers who may not adopt these formats. This creates a two-tiered approach, where larger suppliers enjoy the benefits of automation, while smaller ones still require manual processing.
The Burden of the Longtail: It's important to recognize that the longtail of suppliers, although numerous, often contributes a disproportionately significant amount of time and effort for AP support teams. The manual handling, data entry, and error correction required for these suppliers can quickly consume resources and hamper the efficiency gains promised by technology-driven formats like EDI and CXML.
Balancing Act: A Comprehensive Solution
A comprehensive solution to the supplier conundrum involves addressing the needs of both major suppliers and the longtail. While EDI and CXML bring advantages to larger suppliers, an effective AP automation strategy for a health system encompasses all suppliers, regardless of size. This means adopting a solution that not only accommodates major suppliers but also provides an efficient way to onboard and manage the longtail, ensuring uniformity and streamlining the entire AP process.
Nimbello: Leading the Way to AP Efficiency for Health Systems
As health systems grapple with the challenges of supplier diversity and varied formats, Nimbello emerges as a best-in-class solution. Nimbello is uniquely designed to efficiently process, match, and pair the errors that create real AP challenges from EDI and CXML. With its advanced technology and expert services, Nimbello bridges the gap between technology-driven formats and the complexities of the AP process. Whether dealing with major suppliers or the longtail, Nimbello offers a comprehensive approach that addresses the entire spectrum of supplier interactions.
To truly achieve AP efficiency, Health Systems must adopt strategies that encompass both large and longtail suppliers. With Nimbello as a guiding solution, the challenges of supplier diversity, missing information, and varied EDI and CXML formats can be effectively managed, propelling health systems toward true AP efficiency. Discover how Nimbello can improve your AP process by getting rid of your EDI headaches by contacting Nimbello.