As an industry under constant budgetary pressure to stay within tight profit margins and up to date with rapidly advancing technology, healthcare organizations need control over employee spend and the ability to make smart, strategic spending decisions. We know the most successful healthcare organizations are those that understand their spend well enough to control costs, drive policy compliance, and say “yes” to the right things.
To guide you on this journey, we analyzed the top three spend categories for the healthcare industry to help you optimize your financial operations and gain the insights you need to protect your bottom line.
Top 3 Spend Categories:
44% - Other or Miscellaneous
When a spend category consists of many different expense types, the opportunity to quickly review and pivot wanes. Shifting workplace dynamics and the introduction of new spending categories underscored the ongoing need to update spend categories with new expense types that are clear for employees — ensuring consistent and relevant reporting.
14% - Lodging
Visibility into employee hotel bookings, business travel locations, and preferred hotel supplier selection is now considered essential data. As travel increases, healthcare organizations must be ready to keep their travelers safe — and keep their bottom line healthy. With the right information, you can fulfill both of these obligations.
10% - Mileage
The mileage spend category has remained high over the last couple of years for many healthcare organizations, especially for those who continue to provide home care services. Determination of when to travel and when to stay remote shapes budget strategies and has changed the way dollars are allocated.
So what are some things you can do to optimize this spend?
1. Create relevant expense categories - Regular review of your spend categories and the expense types mapped to them will keep your policies relevant and spend visibility clear. If your ‘Other’ or ‘Miscellaneous’ expense category is high, dig into what’s inside that category and consider adjusting your categories and policies so you know exactly where your organization’s dollars are going.
2. Reel in your tail spend - In the past, most organizations regarded tail spend — the low-cost, high-volume indirect expenditures made by a broad range of employees — as something that wasn’t worth the effort of managing. But with tail spend accounting for an average 80% of an organization’s purchase transactions, today’s savviest healthcare organizations know this is a missed opportunity for savings.
3. Encourage travel program adoption -Create travel policies that make tracking mileage, reservation, and itinerary management simple. Regularly adjust your travel program policies and employee communications to account for the way your teams administer, manage, and allocate budget for travel.
4. Embrace automation - Whether you want to minimize manual steps, increase budget compliance, or bring stability to cashflow, automation can help you maximize your organization’s potential. Automation increases control and oversight, and gives you a clearer picture of how your dollars are being spent, empowering you to make strategic spending decisions.
SAP Concur helps hospitals and health systems streamline travel, expense, and accounts payable processes. concur.com
This article was brought to you by:
