Hospital Vendor Payments: Why Healthcare Takes 97 Days to Pay (And What You Can Do)

You delivered €58,000 worth of medical supplies to a regional hospital. Equipment arrived on time. Quality was perfect. Invoice submitted same day.

Your contract clearly states NET 30 payment terms.

Day 45: You call AP. "Yes, we have your invoice. It's been approved. Processing."

Day 67: You call again. "Waiting on a budget code from the cardiology department head."

Day 89: "You just missed our monthly payment run. Next batch goes out in 3 weeks."

Day 112: Payment finally hits your account.

82 days late.

Your contract said 30. Healthcare said 97.

Welcome to healthcare receivables.

Most vendors assume hospitals are cash-strapped or disorganized.

Sometimes true. But the bigger issue is structural:

The 5-Layer Approval Chain

Layer 1: Procurement Verifies that goods/services were received as specified in the PO. Can take 7-14 days depending on department responsiveness.

Layer 2: Accounts Payable Matches invoice to PO and delivery confirmation. Flags discrepancies (wrong PO number, quantity mismatch, pricing differences). Another 5-10 days.

Layer 3: Department Budget Approval The department that ordered the supplies must assign a budget code. If the department head is in surgery, on vacation, or simply hasn't prioritized it, this step stalls. 10-30 days common.

Layer 4: Finance Compliance Review Larger healthcare systems have compliance teams that review vendor invoices for regulatory adherence (especially for medical devices, pharmaceuticals, or contracted services). 5-15 days.

Layer 5: CFO Payment Runs Most hospitals run payment batches monthly, sometimes bi-weekly. If your invoice clears compliance on day 32 and the payment run was day 30, you wait another 28 days.

Total timeline: 30-90+ days even when nothing goes wrong.

Here's where it gets uncomfortable.

You're a repeat vendor. You deliver critical supplies. The relationship matters.

So when AP says "it's processing," you don't push too hard. You don't want to seem difficult.

But "processing" is code for "it's somewhere in the 5-layer maze and we don't actually know where."

The vendors who get paid faster are the ones who:

1. Know exactly who to contact at each layer
2. Provide documentation proactively (before it's requested)
3. Track payment run schedules and ensure approvals land before cutoff dates
4. Escalate appropriately (not aggressively, but systematically)

Polite waiting doesn't work. Strategic navigation does.

Before Delivery

• Get the correct PO number and ensure it matches your quote exactly
• Confirm the budget code with the ordering department
• Understand the hospital's payment cycle (monthly? bi-weekly?)
• Submit all compliance documentation upfront

After Delivery

• File delivery confirmation immediately (don't wait for AP to request it)
• Submit invoice within 24 hours with correct PO and budget code
• Track invoice status at each layer (procurement → AP → department → finance → payment run)
• Know the payment run schedule and ensure approval lands before cutoff

When Delayed

• Don't just call "AP" — identify the specific blocker (which layer is stalled?)
• Contact the department head directly if budget code is pending
• If past 60 days, escalate to finance manager (not AP clerk)
• If past 90 days, formal notice to CFO office

When Chronically Delayed

• Re-negotiate terms (NET 60 or NET 90 if that's the reality)
• Require upfront deposits for large orders
• Build late fees into future contracts (enforceability varies)
• Work with specialists who have established contacts in healthcare AP

Hospitals respond differently to vendors vs. third-party collections specialists.

Why?

Collecty works with healthcare vendors who supply hospitals across Europe and the UAE. We know the compliance requirements, the typical approval chains, and which escalation tactics work.

1. 97-day DSO is common, not acceptable. Don't normalize it.
2. Documentation prevents delays. Submit everything upfront.
3. Know the approval chain. "AP" is not one person—it's 5 layers.
4. Track payment cycles. Missing a cutoff costs 30 days.
5. Polite waiting doesn't work. Strategic navigation does.
6. Consider specialists. They separate relationship from payment.

Healthcare doesn't pay slowly because they lack funds (usually). They pay slowly because bureaucracy is baked into their systems.

Your job is to navigate the bureaucracy faster than your competitors.

Collecty specializes in healthcare vendor collections across Europe and the UAE. We handle the approval chain navigation, compliance documentation, and escalation process.

If you're waiting 90+ days for hospital payments, let's talk.

Contact Collecty to discuss your healthcare receivables.