By Christina Bowe, Regional Director UKI, Perceptive Software
Streamlining operations and making organisations more efficient is happening at every level, in every business. It means less time and resource wasted on inefficient transaction intensive processes that detract from the real focus of the business. And, more time on strategic initiatives that support survival and drive growth.
Finance departments are no different – many of the day-to-day tasks are intensive manual processes that can cause teams to get mired in transactional processes rather than being able to step back and look at the bigger picture.
This is particularly true of Accounts Payable (AP) / Accounts Receivable (AR) teams where the sheer volume of invoices being received, tracked, processed and paid is a challenge for even the most efficient of organisations.
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An over reliance on paper
For the average finance team, paper-based documents are at the foundation of many AP and AR processes.
To provide some context, respondents to The Paperless Office Maturity Model for Accounts Payable, an ongoing survey conducted by Perceptive Software and The Institute of Financial Operations, found that one quarter of AP departments say that more than 90 per cent of their invoices arrive in paper format. And, half said that 75 per cent are received in paper format.
The survey also found that many AP departments are failing to digitise and scan these documents on receipt – 37 per cent said they don’t scan them once they have been processed, and 26 per cent don’t scan at the front-end as they enter the organisation. This means there is a real risk of document loss – retrieving or replacing misplaced documents is costly to a business, both in terms of time and human effort.
Getting the basics in place
So, how can financial organisations make this process more efficient? Document imaging technology has a critical role to play in improving departmental practices and driving efficiency gains.
For many, the first stage of the document imaging journey starts at the back-end, scanning invoices for storage once they have been processed and the information within them inputted into corporate systems. This has an immediate impact on the physical storage requirements associated with paper-based documents and helps to reduce the risk of document loss significantly.
The next logical step is often to scan invoices as they arrive at the organisation. This ensures improved tracking of documents throughout the invoice management process and brings real efficiency gains related to the tracking and retrieval of invoices.
Building on strong foundations
While this basic approach establishes order and gathers documents in a way where they can be safely stored and retrieved easily, it does not offset the manual keying routines, which still produce uncorrected errors and may limit productivity due to limited labour resources.
The good news is that technology is evolving rapidly and more intelligent document imaging solutions can now take the information, store it, read it and connect it with internal systems where it can be processed.
So, how does this work?
Once a paper document is scanned, intelligent data capture can ‘read’ each page of an invoice and lift out critical information based on its context. It then validates, reconciles and shares this with core business applications such as ERP systems, content repositories or other transactional systems – essentially feeding the business with the relevant information.
As a result of using advanced pattern recognition techniques that work like the human mind, intelligent data capture doesn’t need to take a template or rules-based approach. Instead, it learns from just a small sample set of documents and is then able to process information received, regardless of the format.
These intelligent document capture solutions can be put into action at the very beginning of the process and can automatically differentiate various document types; invoice against purchase order, remittance against customer bills, etc. – without human intervention. This capability eliminates critical bottlenecks in invoice management, reducing errors in the process and boosting productivity significantly.
Starting small then aiming big
However, when it comes to operating on a global level, can this technology be used to handle all aspects of AP or AR processing? When operating internationally, there are a number of factors at play, not least regional differences in currency, regulation and document retention. These must all be taken into account, as must the preferences (or abilities) of customers, suppliers, partners and so on.
Finance departments needn’t worry in this respect, as intelligent document capture solutions operate on a global level to cater for different sensitivities and requirements. The technology works by building upon the structural efficiency of a shared services operation by consolidating all document formats – paper, fax, email attachment, PDF – into a single input stream, ready for touchless processing.
For example, technologies such as electronic data interchange (EDI) and e-invoicing are suitable for processing higher-volume supplier invoices, yet there remains a host of lower-volume suppliers for which active vendor collaboration is impractical; intelligent capture stands as an ideal solution for automating the latter group’s documents. This strategy made for an award-winning AP operation at The Walt Disney Company, where manual processing of invoices – for an operation that handles six million such documents annually – is now limited to a mere handful of exception handlers globally.
A more strategic approach
Document imaging solutions enable financial operations to strip out the transaction intensive processes enabling them to transform operations both in terms of productivity and efficiency. This allows them to focus on more strategic initiatives for the continuous improvement of business operations.