Getting paid on time isn’t a new problem for medical device vendors. But, it is getting more challenging as Integrated Delivery Networks (IDNs), distributors and buying groups negotiate increasingly complex trade deals.
Merely keeping track of which pricing model applies to each sale is a significant chore which is having a staggering impact on the bottom line as businesses leak revenue through billing errors, inaccurate refunds and the cost of administration.
In fact, managing rebates, bill backs, truing-up quarterly claims and ensuring other financial terms are followed has added a remarkable level of complexity to business operations. The account teams who price, audit and validate every step of the billing process have grown exponentially to try to control the chaos.
What hasn’t changed much are the tools these teams use – Microsoft Excel has been around since the 1980s and is still the primary tool used today. Excel is easy to use and can handle complex formulas, but it is woefully inadequate for modern revenue management needs.
What works better than spreadsheets?
Database-driven Trade Revenue Management (TRM) software offers significant benefits that include enhanced billing and pricing accuracy and real-time sales transparency. The systems improve cash flow, shrink administration costs, reduce fraudulent claims and even help organisations streamline operations.
Flintfox has seen its TRM customers reduce administrative overheads by as much as 50 per cent. On average, clients have recouped between 15 and 50 per cent of revenue leakage caused by billing errors and rebate/bill back overcharges from customers. They also report significant cash flow benefits because they have had fewer invoicing queries and disputes.
One of our clients, a medical device company that serves women’s health care providers, is transitioning to our TRM software to help control its pricing approach across Group Purchasing Organisations (GPOs), IDNs and distribution houses.
We’re integrating the software with the company’s Enterprise Resource Planning (ERP) platform to systematise its entire, end-to-end pricing operations.
For example, we’ve encoded the pricing rules for customers who are members of more than one buying group or wholesaler network, to ensure they are charged according to the most appropriate contract. This alone will have a two-pronged benefit of cutting the company’s overheads and ending various profit eroding errors.
This client is incredibly happy with the system’s audit capabilities. Now they can see everything they need about a sale in one place: the purchasing organisation or group, where an item was shipped and the point-of-care medical provider.
Flintfox’s trade revenue management software helps medical device suppliers solve business problems that directly affect the bottom line. In addition, real-time visibility into the company’s revenue gives leadership and senior decision makers the insight they need to maintain and grow their enterprises.
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At Flintfox, we have over 30 years of global experience in helping businesses master their supply chain. Learn more about Flintfox pricing and rebate software built to power manufacturing, distribution and retail enterprises.