The Top 5 Reasons Why Hospitals Need Outsourced Accounting

The Top 5 Reasons Why Hospitals Need Outsourced Accounting

by | Dec 3, 2021 | Healthcare, Outsourced Accounting & CFO

As the CFO of a hospital or healthcare organization, you understand the substantial financial burden facing the healthcare industry. From cumbersome pre-authorization processes to ever-changing government regulations, inefficiencies account for up to $200 billion in annual spending. 

While many hospitals face an uphill battle, others have discovered that outsourced accounting can improve profitability, scale operations for long-term success, and elevate the patient experience. 

This article will discuss how outsourced accounting lowers overall expenses, averts HR challenges, drastically reduces inefficiencies, and helps hospitals maintain superior service levels. While there are many reasons to outsource accounting and use cloud-based technology, the ones outlined in this article will revolutionize healthcare for generations to come. 

#1: Uncover Gaps and Develop a Plan of Action

It’s impossible to transform your organization without knowing the root cause of the problem. Hospitals are complex systems and departments are often siloed, leading to breakdowns in communication and further exacerbating inefficiencies. Establishing a baseline of current issues facing the organization requires hospital leaders to address inefficiencies across the board.

With outsourced accounting, your organization gains access to a suite of financial services, including automation and cloud-based technology. The right software allows you to quickly identify organizational challenges and prioritize initiatives according to the impact on your bottom line.  

You can harness the power of accounting technology to help you:

  • Identify and fix the most costly inefficiencies
  • Drastically lower human error 
  • Reduce overhead and recruiting costs
  • Automate medical billings and streamline insurance reimbursements 
  • Increase accuracy of cash flow projections
  • Easily navigate and adapt to changing government regulations 
  • Achieve operational and strategic objectives faster

With a full-service, high-quality outsourced accounting firm, you can identify the issues impacting your bottom line, develop a plan of action to assess them according to priority, and make significant gains in profitability and patient experience. 

#2: Minimize the Burden of Industry and Government Regulations

One of the most expensive inefficiencies hospitals deal with is ever-changing government regulations. Navigating coding changes, maintaining hospital chargemaster processes, and complying with state and federal regulations requires constant oversight. Furthermore, human error and administrative waste threaten to crush your organization’s bottom line. 

Hospitals that partner with a high-quality outsourced accounting service free up internal resources, minimize human error, decrease misstatements, and lessen the likelihood of governmental audits. With an outsourced account receivable team, you’ll be able to focus on your core competencies, reduce the inherent risk in regulatory compliance, increase profitability and scale your organization to new heights.  

#3: Improve Financial Outcomes 

As the CFO of a hospital or healthcare organization, you are responsible for much more than finance. If you’re like many CFOs we work with, you must cut costs, elevate the patient experience, enhance staffing efficiencies, and optimize revenue. One of the best ways to improve your financial outcome and gain a competitive advantage is to rely on a high-quality, full-service outsourced accounting partner.

With an outsourced accounting partner, your organization leverages a team of dedicated professionals and cutting-edge technology solutions focused on accounting, human resources, and administration. This allows your hospital to recover revenue quickly, reduce account receivable days, and empower your staff to work smarter and more productively. 

Outsourced accounting frees up your resources and allows you to focus on creating a truly customer-centric organization. For most CFOs, this translates to an enhanced patient experience, soaring patient engagement rates, and the ability to deliver world-class service to the community at large. 

#4: Enhance Scalability at Your Organization

Hospital executives and CFOs are opting to leverage cloud-based accounting software solutions that automate administrative tasks. With outsourced accounting, AI and other technological advances offer a way to reduce administrative waste and ascend to the next level. 

As your outsourced accounting provider, we rely on leading software partners and comprehensive solutions to help your organization manage staffing processes, track time and labor hours, and optimize your workforce.

When you turnover high-touch tasks to a fully automated platform, your organization gains substantial efficiencies, catapulting cost savings, and increasing your ability to scale. 

In addition to scaling, other benefits include: 

  • Ability to categorize revenue correctly
  • Increased visibility into employee performance
  • Improvements in employee satisfaction
  • Massive reduction in paperwork and administration waste
  • Enhances data security
  • Recover underpayments easily 
  • Lowers denial rates
  • Offers clinicians more time to build relationships with patients
  • Enhances the patient experience and the patient financial experience (PFE)

With outsourced accounting, fractional CFOs and controllers can improve operations, enhance decision-making processes and scale to the next level. 

#5: Maintain Your Competitive Advantage 

The revenue cycle process at your hospital or healthcare organization is the cornerstone of the organization’s financial stability. Unfortunately, there are many opportunities for revenue cycle waste within the hospital management system. 

These inefficiencies lead to an ever-mounting ceiling of bad debt, continually rising costs, sky-high denial rates, and other financial crises.

When you’re focused on battling inefficiencies and putting out financial fires, you lack the time and resources needed to drive your organization forward in a competitive market. Outsourced accounting allows you to regain control and steer your organization towards a financially sound future. 

While it takes time to implement new software solutions and bring an outsourced accounting services team on board, the gains greatly outweigh the challenges. Hospitals that embrace technological advances enjoy lower operational costs, improved cash flow, and increased productivity. As a result, outsourced accounting is quickly becoming the competitive advantage the healthcare industry relies on to improve profitability, scale operations, and elevate the patient experience. 

See how Lavoie CPA can support your hospital or healthcare organization’s needs. 

Contact us at 704-644-0235.

In-House Accounting vs. Outsourced Accounting

In-House Accounting vs. Outsourced Accounting

by | Oct 1, 2021 | Outsourced Accounting & CFO

When a business is in growth mode, executives need to make more difficult decisions that are efficient and cost-effective for their organization. The foundation of these decisions is a firm grasp of the financial health of the organization. That is why business owners need professional assistance with core business operations like accounting and financial management. Organizations, however, have the choice to have that professional accounting assistance in-house or hire an outsourced accounting firm. 

While in-house accounting staff performs specific business operations such as accounting and financial reporting, outsourced accounting staff can conserve costs and optimize performance through tailored solutions. Businesses get to conserve time and focus primarily on core operations through outsourcing tedious functions. Reviewing the pros and cons of both options will help your business choose which is right for you. 

Contents

What is In-House Accounting

Hiring employees and paying them a fixed payroll to perform specific business operations such as accounting, financial reporting, strategic planning, and HR management is referred to as an in-house resource. In-house accounting teams provide budgeting for the company, as well as bookkeeping, and accounting services.  

Pros of In-House Accounting

  • Dedicated workforce is aligned to the business goals making teams efficient with specific accounting needs
  • Dedicated teams provide quick solutions as they know the organization inside out 
  • In-house professionals can be trained for other in-house operations
  • Sensitive financial information remains undisclosed

Cons of In-House Accounting

  • Teams become a financial burden when workflow is limited
  • Hiring dedicated resources have a huge retention cost, including state taxes, benefits, training, and employee office supplies and equipment
  • Owning licensed accounting software for each employee is an added cost
  • There is a huge time burden for replacing employees that quit, plus you have to train a new employee from the ground-up

What is Outsourced Accounting?

Seeking professional assistance with accounting from certified firms rather than hiring dedicated in-house resources is referred to as outsourced accounting. Outsourcing projects to skilled firms equipped with resources to perform specific accounting tasks saves businesses from various managerial challenges. Business owners can also make calculated decisions based on information from finance specialists.  THis is because many outsourced accounting firms offer more robust reporting, insights, and software. 

Pros of Outsourced Accounting

  • Outsourcing ensures you only pay for the workload you need to get done 
  • Proactive businesses outsource and get the job done helping in house employees focus on other pertinent tasks
  • Vulnerability to fraud is higher in small and medium-sized businesses, which businesses can avoid by working with a team of skilled specialists
  • Access to top-level professionals who understand the latest trends in accounting and can apply their skills to your company’s finances 

Cons of Outsourced Accounting

  • Instructions and communication between a company and an outsourced account firm must be very clear for getting desired results within the approved budget 
  • Business owners have limited control over the processes of outsourced teams
  • In some cases, outsourced accounting teams are not as responsive as you would want them to be

In-House vs. Outsourced Accounting

It is vital to consider your business’ particular needs when looking for an accounting solution. Here is a list of things to consider when deciding between the two:

Cost Factor

Businesses need to calculate whether they have enough workload to justify hiring a full accounting team. A dedicated in-house accounting team can provide a lot of value but can be expensive when you consider the employee costs (salaries, benefits, overhead). Outsourced accounting can be a more cost-effective option, especially for seasonal work or big projects. 

Efficiency 

While in-house teams can do the same tasks assigned to outsourced teams, the latter can be more efficient. That is because an outsourced accounting firm’s sole focus is the accounting tasks at hand, whereas your in-house staff may have other responsibilities that require their focus and attention.   

Security

While it is unfortunate, there are instances where employee fraud can happen. Companies sometimes prefer outsourcing finances to avoid these situations. Non-disclosure agreements signed between the business owners and outsourced firms ensure protection against fraud. On the other hand, companies that deal with sensitive information may be more comfortable working with an in-house team.

Working Hours

Dedicated employees generally work regular office hours. However, accounting firms operate round the clock and deliver immediately if required. The nature of business is once again a factor of consideration that determines efficiency. 

In House Vs Outsourced Accounting – Which One Should You Choose

Both, in-house accounting and outsourcing accounting operations are viable solutions. Once again, business owners must review their business models and decide accordingly. The outsourcing industry is progressing rapidly as businesses are opting for outsourced services in different fields to simplify their operations. 

Outsourced accounting teams focus on the particular tasks provided by their clients. While in-house teams can also be highly effective, sometimes they don’t have the experience that some outsourced teams have. For some businesses, hiring outsourced talent is cheaper. At the end of the day, your business needs a professional touch to tackle laborious operations so that you can focus primarily on business development. 

Outsourcing projects can significantly reduce various hassles for your business that in-house teams may not be ready to handle. If you require assistance with accounting management services, financial reporting, strategic planning, as well as HR services, consider contacting Lavoie. We also provide cloud-based corporate performance management, accounting, and financial management software solutions that accurately meet the specific needs of small and medium-sized businesses.