Life Sciences has its fair share of spend pitfalls
Doing business in Life Sciences is no easy feat. The industry is dynamic and fast-paced, with accelerating innovations in gene therapies, tons of acquisitions and joint ventures, increasingly outsourced and crowd-sourced R&D, and a rich and well-funded startup landscape. It’s a great time to be in Life Sciences, but your company faces a lot of challenges, too: longer-lasting clinical development, a greater chance of drug or device failure, and more pressure to create that blockbuster product. You’re also up against a tangle of worldwide regulations, especially around spend transparency.
When it comes to business spend in Life Sciences, there are constraints and pitfalls just about everywhere you turn. Your organization probably spends a lot, both on the employee travel and entertainment side as you maintain a professional sales organization, as well as on the business side for direct and indirect supplies, contracted help, and in support of your outsourced R&D projects. If you’re like most pharmaceutical companies, you’ve increasingly partnered with universities, teaching hospitals, and contract research organizations to broaden your pipeline of new therapies.
Partner initiatives may be strategically important to your company, but nobody knows more than you how hard it is to keep track of spending. Payments to partners come in all shapes and sizes, from straight “time-and-materials” to licensing fees and revenue sharing to stock- or option-based compensation. Your business development teams have negotiated arrangements and captured their terms in contracts across your paper and electronic repositories, but goodness knows whether they’re all there or up to date. Approving invoices and other types of compensation can be a guessing game, and heaven help you when you need to report on it all to comply with the Sunshine Act and other global spend transparency legislation.
I'm building a world class compliance department and I need the best AI in place. AppZen is my go-to.”VICE PRESIDENT COMPLIANCE
Top life sciences companies use AppZen
Key use cases
Audit 100% of expenses and invoices before you pay
Use AI to audit 100% of expenses and invoices, all before you pay a cent. Auto-approve the low-risk stuff and flag risky spend for your real people.
Go beyond two- or three-way match with “Star Match”
Don’t just validate price and units. How about SLAs, volume discounts, delivery times, transport conditions, and more? Match what matters using AI.
Shape employee spending behavior
Nobody’s reading the paper-based spend policy? Surprise, surprise. Instead, show people the way with AI-based auditing and automatic approvals.
Avoid duplicate spend and suss out all errors, waste, and fraud
Let AI do the detective work for you, finding duplicates even across AP systems and detecting mistakes, wasteful spending, and even the fraudsters.
Reimburse employees in record time
Take away managers’ rubber-stamp and auto-approve low-risk spend. Cut reimbursement from weeks to hours and employees will jump for joy!
Keep your company out of regulatory hot water
Going over the Sunshine Act limit with payments to medical professionals? Taking a politically-exposed person to dinner? Smoke ’em out with AI.
Make sure invoices comply with contract terms
Remember those contracts you negotiated? Are all of those volume discounts and payment terms showing up on your invoices? Be sure with AI.
Why Life Sciences companies need AI in their AP process
Even if you had a solid handle on your partnerships and their associated payment schemes, good luck keeping an eye on spend across that jumble of systems that is your back office. Most large Life Sciences companies have disparate AP systems because of all of the acquisitions and joint ventures they’ve undergone to get where they are. As an industry where false claims, kickbacks, and other shenanigans have gone unaddressed for a long time, Life Sciences is now bearing the backlash as governments around the globe crack down. And because so many companies lack the visibility they need across their spend systems to have really accurate, comprehensive spend reporting, when they’re actually contested by a regulatory authority, many simply say “uncle” and pay the penalty.
Another by-product of complexity in your AP systems is that you’re vulnerable to errors, waste, and fraud. The shifting sands from acquisitions and joint ventures mean you’ll never get to steady state in your back office, no matter how hard you try. The tidy approval workflows and invoice matching processes that are supposed to protect you from overpaying or being bilked by your vendors just don’t work for you. Once you get a process ironed out and agreed upon, it’ll just get upended in your next business transition. And because you’re running just to keep up with the pace of your business, you don’t have time to set them up, much less maintain them. Because of this, you end up not picking up duplicate charges, invoices that don’t give you the payment terms or volume discounts you negotiated, and even fraudulent invoices.
What is required is a smart spend audit process that automates review of all of your expenses and invoices. It should understand and keep track of your corporate policy as well as your negotiated supplier contracts, as well as all spend-related laws such as the Sunshine Act and the Foreign Corrupt Practices Act so you can remain compliant and stay out of regulatory hot water. And finally, it needs to protect you from overpaying, double-paying, or being the victim of fraud.
If Life Sciences spend is the illness, AI-powered spend auditing from AppZen is the cure. Our platform is a must have for modern finance teams to reduce spend, comply with policy, and streamline process.
20 percent of our contracts were incomplete or out of date. AppZen helped us clean up the mess.”DIRECTOR OF FINANCE,
Three of the top five life science firms audit spend with AppZen.
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