From the November 2010 issue of Treasury & Risk magazine

Silver AHA Winner in Technology Excellence

The accounts payable department of the Mayo Clinic, the nation's largest not-for-profit healthcare provider, was drowning in paper and experiencing a backlog of up to 5,000 invoices daily.

The organization's 400,000 vendors all have unique invoice layouts, making optical character recognition applications based on pre-established invoice templates useless. In addition, the Mayo Clinic had added another facility, which was expected to result in a 12% workload increase, and it had targeted a 6% cost reduction.

Brainware offered a solution that could capture data from vendor invoices without requiring templates. Instead, the technology scans e-mailed or scanned hardcopy invoices for vendor-identifying information, such as the purchase order or invoice number. It then extracts 90% to 95% of the information necessary to record the invoices and send out payments. And, says Robin Balliet, Mayo's business coordinator, "It doesn't require our suppliers to change how they invoice us."

The processing team, which is half as big as it was prior to implementing the new technology, validates or completes information the system identifies as questionable or incomplete. Balliet says staff can now address complex tasks and find greater job satisfaction.

Although Brainware had other healthcare clients, it worked closely with Mayo to adapt its highly configurable software to the healthcare group's specific needs, "coming up with a product that could do everything we wanted it to do," Balliet says.

Now 97% of invoices are processed electronically, up from 48% prior to implementation, despite a 28% increase in invoices in 2009. And the cost for processing each invoice has dropped from $4.35 to $3.82. The former 10- to 14-day backlog has been reduced to two days.

Although implementation of Brainware's technology was relatively easy, getting staffers to adapt to using the electronic system instead of paper was challenging, says Balliet. And there were concerns about whether the technology could identify the proper payment recipient--one vendor has 18 divisions, each of which bills the clinic.

Consequently, Mayo phased in the technology over eight months ending in May 2009, and began a second phase early this year to optimize the system, including the integration of an automated system it already had in place for its largest vendors.


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