“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
- Check Your Contracts & Vendor Compliance
- 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).
- 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
- 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.
- 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
- 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.
- 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
- 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.
- 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
