March 21, 2025

How to streamline healthcare expense management

Whether you work for a large hospital system or a family physician practice, your healthcare business will always have expenses. There are larger overhead costs, like your physical space, equipment, and staff. And then, there are expenses for research, attending conferences, training, and continuing education.

The world of healthcare is vast, but all businesses have one thing in common: if you don’t manage your expenses, things can quickly get out of hand.

In this article, we explain healthcare expense management, including its key components, discuss how automation can help, and offer key tips for streamlining your process.

What is healthcare expense management?

definition
Healthcare expense management

Healthcare expense management is a bookkeeping system that hospitals, physician practices, and other healthcare organizations use to plan, pay, track, report, reimburse, and analyze business-related expenses.

Expense management involves tracking and reporting your costs and analyzing the data to forecast future budgets better. In the healthcare industry, common expenses include:

  • Medical equipment or supplies
  • Staff costs
  • Training and continuing education
  • Conference travel costs, like meals, airfare, and registration

Healthcare expense management allows you to understand how your business spends money and how this affects your bottom line.

Key Components

The key components of an effective healthcare expense management process and system are:

  • Reporting: The ability to track your expenses offers transparency and accountability
  • Compliance: Clear expense policies help prevent your financial risks
  • Data-driven decisions: Visibility into your spending allows you to use data effectively to plan for future spending
  • Engagement: When you have the proper process in place, your team can focus on caring for patients and not on expense paperwork

How automation helps

If you work in the healthcare industry, you already know the impact expenses can have on your business—and how frustrating it can be to manually track expenses when your attention could be put to better use elsewhere.

A fully manual process for medical expense tracking can open you up to a number of risks, including budget overruns and reporting errors. Failure to properly track medical expenses could also lead to tax or compliance issues, especially if you’re subject to Sunshine laws and other regulations requiring transparency and recordkeeping.

Automation can help mitigate those risks and save you time in the process. We go into more detail about how automation works below, but here are some of the benefits:

  • Cutting down on paper: Going digital means you no longer have to rely on crumpled paper receipts that are easily misplaced
  • Faster reimbursements: With an automated process, your expense reimbursements will be processed and paid out more quickly
  • Fewer errors: Manual data entry can sometimes lead to mistakes in expense reporting
  • Fraud reduction: Likewise, automated systems can flag fraudulent expenses or other policy violations
  • Better visibility: Automated expenses management tools provide tracking and reporting at the click of your fingers, as you can easily understand your budget and spending in real-time

8 tips for streamlining healthcare expenses

The good news is that you can take steps to manage your healthcare business’s expenses a little easier—whether you run a medical office, hospital, clinic, rehabilitation center, urgent care facility, or provide out-patient or in-home services.

Below are eight tips to help you do just that:

1. Create a clear expense policy

As a business owner or manager, it's your responsibility to establish policies for your practice and educate your employees about those policies. This applies to everything from training and safety to—you guessed it—expenses.

Which documents you create depends on the nature of your practice, but they might include an expense policy, reimbursement policy, credit card policy, or travel expense policy. They should provide clear guidelines for points like:

  • Who can make purchases
  • What (if any) spending limits exist
  • The expense report submission and approval process
  • Specific examples of common expenses your practice sees

2. Consider pre-approvals

With pre-approvals, your employees must have their manager authorize a purchase before they can make it. This allows the manager to ensure the expense is necessary to your practice, complies with your internal spending policies, and fits into the broader budget before it’s incurred.

Pre-approvals can be especially helpful for new employees still in their probationary period or for certain necessary, significant expenses exceeding your policies' spending limits.

3. Automate your approval process

If you manually review every expense your staff submits—every cotton swab, tongue depressor, and home visit—you might be slowing down the process for everyone involved. At best, this is inefficient, and your time could be better spent elsewhere. At worst, you could be holding up legitimate reimbursements for your employees' purchases on behalf of your practice.

One way to make the expense approval process more efficient is to automate it—or at least certain parts. Some areas you might consider automating include:

  • Expense categorization
  • Receipt collection
  • Mileage tracking
  • Reporting

4. Accurately categorize your medical expenses

Accurate categorization powers your expense tracking, which gives you the insights you need to set realistic budgets or identify areas to cut back. It also helps you tell the difference between deductible and non-deductible expenses, which you’ll need to know if you plan on claiming tax deductions.

Most healthcare businesses see the highest level of spending in the medical supply, staff salary, and administrative categories, but it’s not uncommon for your practice to see other types of medical expenses, too. If you aren’t sure how to record an expense, check out Ramp’s Business Expenses Category Classifier.

5. Document each purchase

If you don’t document your purchases, your clinic risks potential liability, including audit and compliance risk. To protect your practice, every purchase your employees submit should be backed by documentation, such as a receipt, invoice, or work order.

Of course, physical receipts introduce their own challenges. After all, it’s easy to misplace paper receipts, and they can degrade over time, making them illegible. One way to sidestep these challenges is to opt for electronic receipts (e-receipts) whenever possible or to require employees to submit a digital copy of their receipt alongside any expense submission.

6. Enable mobile expense submissions

There are many reasons why your staff might be on the move. Maybe your practice operates out of multiple branches, offices, or clinics, and you regularly have to move staff around daily, or maybe you have staff traveling to attend a conference.

Whatever the case, enabling mobile expense report submissions can help you streamline your expense submission process, so be sure to choose expense management software that offers a dedicated mobile app.‍

After all, an app empowers your staff to submit expenses as they’re incurred. This can help avoid lost receipts and the headaches they cause. It can also provide greater transparency into how your business is spending money in real time, especially if the alternative is your employees submitting expenses on a weekly or monthly basis.

7. Take advantage of real-time reporting

If you manually process expense reports quarterly or monthly, it's difficult to know how closely you track against budget projections. This creates the risk of finding an unexpected budget variance when it’s too late to take action.

For this reason, most healthcare practices can benefit by automating their reporting process to run weekly or even daily. This increases transparency into how your practice spends money so that if you spot a budget variance, you have time to cut back elsewhere or find funds to fill the gap.

As a bonus, many tips highlighted above (pre-approvals, automated approvals, mobile expense submissions) make real-time reporting easier to pull off.

8. Regularly audit SaaS vendor spending

Depending on the nature of your healthcare business, you might have contracts or subscriptions with several software vendors. Just a few examples include:

  • Electronic health record (EHR) software
  • Medical billing software
  • Appointment booking and scheduling software
  • Telemedicine solutions
  • Electronic prescription software
  • Medical diagnosis software
  • Hospital management software
  • Medical imaging software
  • Medical equipment management solutions

If you don’t regularly audit your vendor spending, it’s difficult to tell whether you’re getting your money’s worth out of each software solution. A vendor audit can help you understand your usage rates for each software, how much you’re spending on each contract, and even help you uncover ways to save, like consolidating multiple contracts into one or negotiating during contract renewals

Ramp makes healthcare expense tracking easy

Expense reporting for healthcare doesn’t need to be a headache. Implementing even a few of the tips above will help you to get a better handle on your business’s expenses so that you’re spending less time in spreadsheets and more time doing what matters: caring for patients.

The right tools can help. With Ramp, you get corporate cards, expense management, bill payments, accounting automation, and reporting—all in one integrated platform. Our system allows employees to easily submit their expense reports, document receipts, gain manager approval, and receive reimbursements faster.

By providing detailed insights and real-time visibility, Ramp simplifies medical expense tracking. Practices that use Ramp can look forward to fewer errors, less time spent on tedious accounting tasks, and greater financial productivity.

Try Ramp for free
Share with
Tim StobierskiContributor Finance Writer
Tim Stobierski is a writer and content strategist focused on the world of finance, investing, software, and other complicated topics. His friends know him as a bit of a nerd. On the side, he writes poetry; his first book of poems, Dancehall, was published by Antrim House Books in July 2023.
Ramp is dedicated to helping businesses of all sizes make informed decisions. We adhere to strict editorial guidelines to ensure that our content meets and maintains our high standards.

We’ve simplified our workflows while improving accuracy, and we are faster in closing with the help of automation. We could not have achieved this without the solutions Ramp brought to the table.

Kaustubh Khandelwal

VP of Finance, Poshmark

Poshmark

Our previous bill pay process probably took a good 10 hours per AP batch. Now it just takes a couple of minutes between getting an invoice entered, approved, and processed.

Jason Hershey

VP of Finance and Accounting, Hospital Association of Oregon

Hospital Association of Oregon

When looking for a procure-to-pay solution we wanted to make everyone’s life easier. We wanted a one-click type of solution, and that’s what we’ve achieved with Ramp.

Mandy Mobley

Finance Invoice & Expense Coordinator, Crossings Community Church

Crossings Community Church

We no longer have to comb through expense records for the whole month — having everything in one spot has been really convenient. Ramp's made things more streamlined and easy for us to stay on top of. It's been a night and day difference.

Fahem Islam

Accounting Associate, Snapdocs

Snapdocs

It's great to be able to park our operating cash in the Ramp Business Account where it earns an actual return and then also pay the bills from that account to maximize float.

Mike Rizzo

Accounting Manager, MakeStickers

Makestickers

The practice managers love Ramp, it allows them to keep some agency for paying practice expenses. They like that they can instantaneously attach receipts at the time of transaction, and that they can text back-and-forth with the automated system. We've gotten a lot of good feedback from users.

Greg Finn

Director of FP&A, Align ENTA

Align ENTA

The reason I've been such a super fan of Ramp is the product velocity. Not only is it incredibly beneficial to the user, it’s also something that gives me confidence in your ability to continue to pull away from other products.

Tyler Bliha

CEO, Abode

Abode