Automating accounts payable in healthcare

Healthcare finance is under sustained pressure. Current economic realities and regulatory reform have amplified the need to reduce non-clinical overhead and protect margins.

At the same time, technology adoption is accelerating. A Grant Thornton CFO survey from late last year demonstrates the significance of digital transformation and AI for governing boards, with more than 60% of finance leaders already deploying automation to improve efficiency and resilience. AP automation is a natural starting point: it addresses high volume, rules-based processes that are often manual in many organizations.

For most healthcare systems, AP remains a bottleneck–characterized by paper invoices, manual data entry, and fragmented workflows. These inefficiencies drive late payments, missed discounts, and compliance risk. Automating AP delivers measurable benefits:

• Lower operating costs through reduced manual effort
• Faster processing and improved accuracy, minimizing rework
• Enhanced compliance and audit readiness with digital trails
• Better supplier relationships and working capital optimization

“Automating AP isn’t just about efficiency – it’s about agility. By digitizing and streamlining processes, organizations gain real-time visibility into cash flow, enabling faster, data driving decisions to support strategic growth,” said Grant Thornton’s Sarah Miranda, a Business Consulting Manager.

Automation should not be static but works best when it evolves as the technology improves and the company’s needs adjust:

• Rules-based automation: Early stages of automation should focus on digitizing workflows and applying structured business rules to eliminate manual tasks.
• Intelligent automation: As organizations mature, automation can integrate AI and machine learning to handle exceptions, predict risks and enable real-time decision-making.
• Transformative AI: The future of AP automation lies in creating adaptive systems that learn from unstructured data, enabling predictive insights and autonomous processing.

In short, AP automation is no longer a “nice to have.” It is a lever for cost containment and operational sustainability, freeing up resources to reinvest in patient care and growth. 

How TUHS implemented change

The Temple University Health System (TUHS) undertook a comprehensive AP transformation to stabilize operations and build readiness for scalable automation. TUHS has approximately $2.7 billion in net patient revenue, 13 dedicated AP FTEs and processes approximately 290,000 invoices annually. According to Mike Difranco, Temple’s Chief Accounting Officer, they realized the need to take a hard look at TUHS’ data, policies, and process variation across the procure‑to‑pay continuum.

TUHS conducted a thorough review of our procure-to-pay processes: examining workflows, approval hierarchies and management practices to help overcome the health system’s own barriers and roadblocks, said Difranco.

“From the beginning, we understood meaningful change would require not only a clear understanding of our existing challenges but also a coordinated effort across departments to implement sustainable solutions,” Difranco said.

Key steps in the AP automation transition included:

• Eliminating backlogs and redesigning workflows: TUHS aligned its policies with leading practices, and clarified roles across its supply chain, IT, and finance operations.
• ERP “health check” and roadmap: TUHS assessed its ERP capabilities and leadership decided that it will be pursuing a cloud‑based platform for planning and analytics for future automation rests on modern, scalable infrastructure.
• Establishing key performance indicators (KPIs): TUHS designed dashboards for standard AP KPIs and entity-specific metrics and set KPI goals based on industry standards.
• Governance and change management: The health system hosted a semi-annual Procure‑to‑Pay Excellence Summit with AP, supply chain, accounting, IT and treasury departments, to align cross‑functional solutions, standardize exception handling, and institutionalize KPIs.

The result is a disciplined foundation: standardized processes, measurable KPIs, and a technology roadmap to transition from “baseline” digitization to stable and then optimized operations—unlocking touchless processing and electronic payments at scale. 

There is opportunity through AP modernization to tighten controls while increasing speed:

• Data integrity and vendor risk: Centralizing vendor master data; requiring EIN/TIN validation and bank account verification; enforcing “no purchase order, no pay” for targeted categories.
• Regulatory and payer friction: Administrative requirements drive back‑office workload, reducing rework through standardization and thus freeing scarce staff capacity.
• Audit readiness: Digitizing invoice trails, automating two-way or three‑way matching, and instituting role‑based approvals can compress audit cycles and reduce findings. 

Automation in healthcare finance delivers benefits that extend beyond cost savings. At its core, AP automation reduces paper waste, accelerates invoice processing, and strengthens compliance. These efficiencies translate into measurable financial gains, while also improving staff experience and patient satisfaction by freeing resources for higher value work.

Understanding this progression helps finance leaders set realistic expectations and build a roadmap that aligns with organizational readiness. AP automation is the foundational step toward a more intelligent, data-driven finance function.