The Cost of Not Doing Your Due Diligence When Considering a New Billing System

Published in Member Communities on July 22, 2025

The Cost of Not Doing Your Due Diligence When Considering a New Billing System By Brightree

In today’s fast-paced and ever-evolving business environment, providers are increasingly reliant on technology to streamline operations, reduce overhead, and improve efficiency. One critical piece of this puzzle is the billing system. For providers large and small, a reliable, accurate, and efficient billing system is essential for ensuring smooth, financial transactions and maintaining healthy cash flow.

However, many businesses make the costly mistake of choosing a new billing system without doing their necessary due diligence. This failure can lead to a host of problems, such as financial errors to staff and customer dissatisfaction, legal liabilities, and even reputational damage. The cost of not thoroughly vetting and selecting the right billing system can be significant, not just in terms of direct financial losses but also in terms of long-term operational and strategic setbacks.

A small mistake in billing can quickly snowball into significant financial problems.

1. Financial Errors and Revenue Loss

One of the most immediate and direct consequences of not properly evaluating a billing system is the risk of financial errors. A billing system is at the heart of revenue generation for most organizations, and a small mistake in billing can quickly snowball into significant financial problems.

Inaccurate billing can manifest in several ways, such as undercharging, overcharging, missed invoices, or duplicate charges. These errors can result from using a system that isn’t compatible or doesn’t integrate properly with your accounting software. For instance, if a billing system fails to apply the correct payment terms, it could lead to patients being billed incorrectly, resulting in lost revenue or, worse, a damaged reputation when these errors are discovered.

Without due diligence, you may not realize that they are losing out on substantial revenue from missed or delayed payments.

2. Patient Dissatisfaction and Churn

Billing is one of the most direct points of interaction between a provider and its patients. Patients expect accuracy, transparency, and efficiency when it comes to billing. If a billing system consistently fails to deliver on these expectations, it can create friction between a company, its patients and its staff.

Incorrect invoices or delayed billing can lead to frustration and confusion. If a patient notices a billing error, they may have to spend significant time resolving the issue, causing them to feel undervalued. Patients who face frequent billing errors are also more likely to leave and take their business elsewhere.

In addition, a billing system that lacks transparency or provides confusing payment details may leave some patients questioning the integrity of your business. This is especially true for HME’s that rely on recurring payments. A failure to deliver clear and concise billing statements can lead to dissatisfaction and an increased likelihood of customer churn.

If your billing system is not built to comply with these regulations, you may end up charging customers incorrectly.

On top of that, providers are required to comply with various customer protection laws, especially in the case of subscription services. If your billing system is not built to comply with these regulations, you may end up charging customers incorrectly or failing to adhere to refund policies, further damaging your customer relationships.

3. Regulatory and Compliance Risks

A significant and often overlooked cost of choosing the wrong billing system is the risk of non-compliance with industry regulations and legal requirements. Billing systems are not just about keeping track of money; they also need to ensure compliance with various tax laws and other industry-specific requirements.

For example, with a billing system that does not adhere to data protection standards, you could face significant legal liabilities related to the mishandling of customer data.

Due diligence ensures that the billing system you choose is up to date with the latest regulatory changes and that it includes robust security protocols for protecting sensitive financial information. Failing to properly evaluate a system’s compliance capabilities can put your business at significant legal and financial risk.

4. Operational Inefficiency and Increased Costs

Another major consequence of not conducting proper due diligence when choosing a billing system is operational inefficiency. The wrong system can disrupt your business’s workflow, leading to wasted time and resources, especially when you might be short staffed.

If the system you choose is difficult to use or lacks essential automation features, your staff may have to spend significant time manually correcting errors, tracking payments, and handling customer inquiries. This results in higher operational costs and lost productivity.

For example, a poorly integrated billing system might require your team to manually input data into multiple systems, creating unnecessary complexity and increasing the risk of mistakes. Moreover, if the billing system does not support real-time updates or reporting, your accounting team may struggle to generate timely and accurate financial reports, delaying decision-making and strategic planning.

Over time, these inefficiencies can add up and lead to higher labor costs, missed business opportunities, and a slower response to market changes.

5. Integration Challenges

Many providers today use a range of software tools to manage their operations, including customer relationship management (CRM), enterprise resource planning (ERP), and accounting systems. A system that cannot integrate seamlessly with these other tools will create silos of data, making it harder to maintain accurate records, track customer interactions, and perform financial analysis.

Choosing a billing system that lacks the necessary integrations or is incompatible with your existing software infrastructure can result in data discrepancies, extra manual work, and a lack of visibility into your business’s financial health.

The integration challenges can also extend to external platforms, such as payment gateways, which are essential for processing transactions. A system that doesn’t effectively integrate with payment processors may cause delays or failures in processing payments, further frustrating customers and increasing the risk of financial errors.

Providers must also evaluate how the system will scale as their company grows.

6. Scalability and Long-Term Viability

While it’s essential to consider immediate needs when choosing a billing system, providers must also evaluate how the system will scale as their company grows. What works for a small business with few customers may not be sufficient for a company with an expanding patient base, more complex billing needs, or other operations.

Failing to assess scalability can result in choosing a system that cannot grow with your business. As a result, providers may need to replace or upgrade their billing system sooner than expected, leading to significant additional costs, disruptions, and potential loss of data during the transition.

Long-term viability also includes considering the software provider’s track record, support infrastructure, and ability to adapt to new technologies. A system that is not frequently updated or lacks a solid support network can become obsolete or increasingly difficult to maintain over time.

A billing system that causes errors, delays, or customer dissatisfaction can quickly damage a company's reputation.

7. Reputational Damage

In an age where HMEs are under constant scrutiny, reputation is everything. A billing system that causes errors, delays, or customer dissatisfaction can quickly damage a company’s reputation in the marketplace. Negative reviews, customer complaints, and social media backlash can spread quickly, leading to long-term reputational damage that may take years to recover from.

When a business experiences a significant billing failure, it’s not just about the loss of revenue in that moment; it’s about the damage done to patient trust. Once customers lose faith in a company’s ability to handle billing efficiently and accurately, they are unlikely to return, and potential customers may be dissuaded from doing business with you.

The costs of not doing your due diligence when choosing a new billing system can be severe and far-reaching.

Conclusion

The costs of not doing your due diligence when choosing a new billing system can be severe and far-reaching. From financial errors and regulatory risks to customer dissatisfaction and reputational damage, the consequences can be overwhelming. By thoroughly vetting your options, evaluating scalability, considering integration with existing systems, and ensuring compliance with legal standards, you can avoid these pitfalls and choose a system that will support your business for years to come. The time and effort invested in due diligence upfront can save your company from costly mistakes and help ensure smooth, efficient, and accurate billing processes that contribute to long-term success.

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This article was originally featured in the VGM Playbook: Cost Management Trends, Strategies, and Solutions. To read the full article and more like this, download your copy of the playbook today!