“New to automated procurement? This guide walks you through the essentials.”
As we approach the end of the year, finance leaders in senior living and post-acute care face a unique set of challenges—and opportunities. It’s time to close the books, ensure vendor and contract compliance, clean up inventory, and set your procurement operations up for a strong start in the new year. Here’s a practical, step-by-step guide.
Why a Year-End Audit Matters
In multi-facility senior living and post-acute organizations, purchasing and procure-to-pay (P2P) workflows are often dispersed, manual, and opaque. Our platform helps providers reduce annual spend and increase contract compliance through visibility and centralized workflows.
Without a formal end-of-year audit, you risk:
- Overspending via off-contract vendors or unapproved purchases
- Inventory carrying costs tied up in excess or expired stock
- Lack of clarity in vendor performance, contractual terms, and risk exposure
- Manual AP/invoicing burdens, late fees or missed discounts
An organized audit helps turn these risks into a strategic advantage: stronger vendor terms, reduced costs, cleaner inventory, clear spend visibility, and refreshed workflows for the year ahead.
- Check Your Contracts & Vendor Compliance
What to review:
- Contract renewal dates and terms: Do you have any contracts expiring in Q1 of the next year? Are renewal clauses clear?
- Pricing compliance: Are you paying the negotiated rate? Automated platforms support this with real-time monitoring.
- Vendor performance & reliability: Assess late deliveries, quality issues, pricing creep, and responsiveness.
- Supplier consolidation/rationalization: Are you still working with multiple vendors for the same category? Could you leverage your spend better?
- Regulatory & compliance checks: Ensure all vendor documentation, certifications, and audit-trail records are up to date (critical in healthcare settings).
Action checklist:
- Pull a list of all vendor contracts with expiration/renewal dates.
- Ask: “Are we within the scope of our negotiated price? If not, why?”
- Highlight vendors with repeated performance issues—flag for review or replacement.
- Ensure vendor master data is cleansed: inactive vendors removed, duplicates resolved.
- Use Procurement Partners to generate contract-compliance reports and identify off-contract spend.
- Inventory Cleanup & Reconciliation
Inventory in senior living and post-acute care is more than just cost—it’s a component of care delivery. But excess, outdated, or mismanaged stock can drain budgets and eat up staff time.
Focus areas:
- Expiry and obsolescence: Identify items near or past expiry and decide whether to use, relocate, or dispose.
- Par levels & stock counts: Review usage trends across facilities. Are some sites over-stocked? Under-stocked?
- Transfers and centralization: Move excess stock from one location to another instead of buying new.
- Write-offs and adjustments: Document and clean up inventory adjustments before the new year roll-up.
- Inventory to purchase alignment: Ensure what you have matches what you ordered and what’s been invoiced/received.
Action checklist:
- Schedule physical (or barcode-scanned) stock counts at each facility.
- Compare on-hand values, usage trends, and outstanding orders—look for anomalies.
- Write off or reallocate items flagged for expiry, obsolescence, or excess.
- Update your inventory system so year-end values are clean for audit or accounting.
- If you use a system like Procurement Partners’ Hybrent solution, leverage dashboards to spot stuck or slow-moving items.
- Spend & Invoicing Audit
Watching your spend and invoice flows is central to year-end cleanup—and critical for AP operations, procurement, and finance teams. An audit here uncovers hidden costs, errors, missed discounts, and opportunities for next-year savings.
Key audit steps:
- Review outstanding POs and invoices: Are there POs without receipts, invoices without POs, or unmatched lines?
- Check for duplicate invoices or late-paid invoices: These cost you either duplicate payments or lost discounts/fees.
- Off-contract spend: Identify purchases made outside the negotiated vendor catalog or list. A platform that ties requisitions to contract pricing helps spot this.
- Budget vs actuals: At each facility or cost center, compare what was budgeted vs what was purchased. Highlight variances.
- Audit trail readiness: Ensure your purchase-to-payment chain is documented, which is often required in healthcare.
Action checklist:
- Generate a report of all POs older than 90 days with no matched invoice or receipt.
- Filter invoices that posted after the fiscal year cut-off; determine if they should be accrued.
- Extract summary of spend by vendor, site, category; highlight where spend deviated from contract.
- Confirm that your procurement/finance system retains detailed audit logs that meet healthcare compliance; Procurement Partners offer this capability.
- Close the Year Strong & Set Up for Next Year
With cleanup done, now’s the time to wrap up the year and prepare for the next.
Things to do:
- Set up your budget & procurement plan for the upcoming year: Use your insights (from inventory audit, spend trends, vendor reviews) to build realistic budgets.
- Refresh approval workflows and policies: If you’ve identified bottlenecks or exceptions, revise roles, thresholds, and approvals before January.
- Communicate to stakeholders: Share results of the audit (savings identified, vendors reviewed, inventory cleaned) with senior leadership, procurement teams, and front-line staff. Build buy-in for next year’s changes.
- Deploy or refresh technology/tools: If you’re using an end-to-end Procure to Pay (P2P) platform, ensure all users are trained, catalogs updated, and dashboards configured for next year.
- Schedule review cadence: Plan monthly or quarterly reviews of vendor performance, contract compliance, inventory metrics, and spend analytics so the audit becomes a continuous performance tool—not just year-end.
Why This Matters for Senior Living & Post-Acute Care
In the senior living/post-acute space, margins are tight, staffing is stretched, and procurement complexity is higher. The multi-location, multi-vendor nature of your operations amplifies risks: supply shortages, off-contract spend, expired inventory, and manual AP burdens. Using a purpose-built healthcare procure-to-pay platform helps you bring control, visibility, and savings into your operations.
By conducting a thorough year-end audit, you:
- Free up working capital tied up in excess or outdated inventory
- Capture negotiated savings, avoid paying above contract pricing
- Reduce administrative burden on AP and procurement teams
- Improve supplier relationships and performance going into next year
- Position your organization for better financial outcomes and care delivery
If you have one key takeaway from this year-end audit guide—it’s this: don’t wait until January to address year-end issues. The strongest organizations finish the year organized, compliant, and ready to move quickly.
Start now. Use the checklists above to review contracts, clean inventory, audit spend, and align workflows. For senior living and post-acute care finance leaders, this isn’t just housekeeping—it’s a strategic move with measurable impact.
👉 Ready to simplify your year-end and make procurement a strategic advantage? Schedule a demo with Procurement Partners and see how a leading end-to-end procure-to-pay solution, built for healthcare, can streamline your year-end—and every day.
Looking to Reduce Your Annual Spend?
Procurement Partners helps healthcare organizations strengthen their supply chain operations while reducing annual spend by over 10%. As a leading healthcare supply chain software solution purpose-built for post-acute, non-acute, and continuum-of-care providers, the platform simplifies the procure-to-pay process. Users can place orders and process invoices for all suppliers through a centralized system. By automating procurement workflows, organizations report up to 40% time savings and 95% supplier contract compliance.
