AP Modernization Benefits for One DSO
This dentist-run DSO provides comprehensive practice management and administrative support services for practices across the northeast US. Formed through the merger of three separate companies, it has grown through acquisition, affiliations and new practice openings, building a strategic network with over 30 offices in four different states offering general and specialty dental services.
While that growth has helped significantly increase revenues, it has also created challenges related to its Accounts Payable (AP) process. It doubled the number of invoices its small AP team had to manage. In addition, it created a decentralized operating model that made it much more difficult to collect, process, and route invoices for approval.
Making things even more challenging was the fact that the DSO was already processing a large volume of invoices each week, an effort that relied on manual data entry, paper-based processes, and other time-consuming steps. The company would receive invoices directly from suppliers as well as from its various offices. The invoices, some as long as 12 pages, were a mix of paper and electronic, as well as scanned PDFs that included multiple invoices, making it extremely difficult to manage.
This forced the DSO’s controller to manually key all invoice data into QuickBooks, manage approvals with the CFO and cut and mail a high volume of paper checks each week. If she didn’t address it every day, it quickly spiraled out of control. So, when 500 invoices a month quickly became 1,000 — it became clear they needed to automate their AP process.
There were a few core requirements to make AP automation work for the DSO:
- Seamless integration with QuickBooks to eliminate manual data entry
- Electronic payment capabilities to reduce the cost and effort of check payments
- A cloud-based solution that provided the CFO—or any user—complete visibility into invoice and payment details, no matter where they happened to be.
Once it settled on the right AP automation solution, the DSO was quickly up and running. Today, most of the company’s invoices are sent to a specific AP email account, making it easy for the controller or any user to quickly examine the invoice and send it directly to the AP system. For those invoices still received via mail, AP specialists quickly scan and upload PDFs into the system. Whether the invoices are emailed or uploaded into the system, the automated invoice capture process kicks in, extracting relevant data from each invoice.
From there, the AP specialist processes and posts the invoices. Then, the controller simply goes into the system once a week, runs a report, and chooses which invoices to pay. The entire process is much faster and more efficient, enabling the DSO to easily stay on top of all invoices. More importantly, AP automation has freed up the finance team’s time to focus on higher value activities – proactively communicating with vendors, performing more cash flow analysis, and improving process and efficiency.