In this Business Profile, Andrew Jamison, vice president in the Global Corporate Payments division of American Express, discusses trends and opportunities in supplier payments.

Tell us about your organization.

Andrew JamisonAmerican Express is a multinational financial services corporation headquartered in New York City. For healthcare organizations, American Express offers a suite of payment solutions ranging from purchasing cards to electronic payments, which providers can use to pay vendors, suppliers, and other entities to which they owe funds. Not only do these products streamline accounts payable, they also help organizations better manage their spend.

What are some of the unique challenges healthcare organizations face when paying suppliers?

With declining reimbursement and an increasingly competitive landscape, many hospitals are seeing their margins shrink. To deliver optimal patient care while remaining financially stable, organizations must find ways to operate more efficiently, increasing performance while reducing waste. Accounts payable departments are ripe for improvement as a lot of organizations currently use paper-based processes, which are costly, cumbersome, and sometimes ineffective. Cutting and mailing checks carries significant paper, printing, and postage costs, and these costs can add up, especially if an organization has a large number of vendors. Checks can also get lost or stolen, and there is a price associated with reissuing the check or responding to instances of fraud. Moving from paper-based processes to electronic solutions can be a low-hanging fruit for many organizations-with a little upfront time investment they can streamline payment processes to drive savings and improve efficiencies.

How is automation helping to address these challenges?

Automation presents an organization with an opportunity to make the payment process faster, easier, and more accurate. It can also curb fraud and ensures suppliers receive payment in a timely fashion.

For example, through our Buyer Initiated Payment (BIP) program, an accounts payable department can direct American Express to make payments to vendors throughout the month when the department receives an approved invoice. Unlike paying by check, however, the organization is not out any cash until it pays American Express back, typically once a month for the total amount of those vendor payments. This arrangement gives the facility the opportunity to extend float and better manage its cash flow. BIP can also lead to operational advantages, due to reduced overhead compared to a reliance on checks, such as supply and printing costs, postage, and so forth. Reconciliation is also easier because accounts payable staff do not have to manually match checks to invoices, as it can all be done automatically at the end of the month.

In addition to the operational advantages, a BIP system allows organizations to offer more favorable payment terms to suppliers without impacting cash flow, which can foster goodwill and result in early payment discounts. American Express also financially incentivizesa organizations that pay their vendors using the electronic platform, letting its customers earn a return on their current spend.

What value does American Express provide to hospitals and health systems?

American Express offers a suite of integrated accounts payable solutions, including purchasing cards, virtual payment, and buyer initiated payment.

We encourage a holistic approach to accounts payable, consulting with our clients to determine a strategy that best meets their needs. For instance, an organization may use a purchasing card for one-time charges or small dollar amount purchases. Doing so cuts down on petty cash reimbursements, which can be time-consuming. To facilitate large, more frequently occurring payments, the organization may turn to our BIP or virtual payment solutions.

American Express also assists with implementation. For example, with BIP, an organization's vendors must agree to participate. While there are advantages to suppliers-reduced days outstanding, less invoicing and collections costs, and online payment tracking-there are fees involved, and it is important to effectively communicate the program's details and potential benefits to encourage these suppliers to sign up. Because American Express has deep relationships with a variety of vendors, it can act as a go-between to cultivate supplier enthusiasm for this transition from paper-based to electronic payment. American Express also performs detailed spend analyses for its healthcare customers, helping them target specific vendors on which to focus in order to reap the biggest benefit.

There is no silver bullet to optimizing accounts payable, and every organization must determine a strategy that works for them. Consequently, organizations should look for a company that offers a variety of payment options and provides consultation on what combination makes the most sense. At American Express, we work with each of our clients to understand their vendor profile, determine the right payment strategies, and pinpoint which suppliers to target.

It is also critical to work with a recognizable and trusted name in financial services. Because many vendors trust the American Express name, they are often willing to participate if they know our company is involved.

Before starting down the road to automation, organizations should make sure that all departments are on board with the move. Leaders from finance, purchasing, IT, and accounts payable should get involved to review different possibilities and outline implementation steps. Meeting with the purchasing department in particular can be beneficial because it typically has the vendor relationships.

What do you see the future of spend processes in health care looking like?

Going forward, organizations are going to have to take a holistic view of their spend and leverage tools that work together to smooth payment. Healthcare entities will continue to be strapped and thus will keep looking for ways to ease costs and increase revenue. As mentioned before, the accounts payable department represents an ideal place to begin as automated solutions drive faster payment, reduce costs, and even add revenue.

Where can readers learn more about American Express’s suite of solutions?

Readers can go to the American Express healthcare solutions website to learn more about how to streamline accounts payable and improve cash flow.


a. The terms of your financial incentive payment will be governed by your BIP agreement with American Express.

HFMA is the nation’s leading membership organization for more than 40,000 healthcare financial management professionals. Business Profiles are funded through advertising with leading solution providers. Learn more.

American ExpressContent for this Business Profile is supplied by American Express. This published piece is provided for advertisement purposes. HFMA does not endorse the published material or warrant or guarantee its accuracy. The statements and opinions of those profiled are those of the individual and not those of HFMA. References to commercial manufacturers, vendors, products, or services that appear do not constitute endorsement by HFMA.

Publication Date: Saturday, August 01, 2015