Managing Accounts Payable Invoices through Electronic Content Management Stephen Chambers, Assistant Director of IT Services Texas A&M University

Transcription

1 Managing Accounts Payable Invoices through Electronic Content Management Stephen Chambers, Assistant Director of IT Services Texas A&M University

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3 The Division of Finance at Texas A&M University recognized many years ago that as the University grew, so would the Division s workload. As with any institution, the challenge of tracking each of the thousands of items that are processed every day has inherent difficulties. In 2002, the Division embarked on a game-changing project to electronically assist with managing mounds of paperwork, bulging stacks of invoices to pay, payroll documents to process, purchasing requisitions to track, contracts to organize, and correspondence to address. While this is a far-reaching statement, its effects have been felt throughout the Division and, as a result, the rest of the University. Need: The Division had the need to better organize and track the thousands of documents that are processed every day. Problem: The greatest need was to streamline the collecting, sorting, distribution, tracking, and completion of an average 1,200 Accounts Payable invoices every business day. Solution: The Division implemented a Kofax/FileNet electronic content management system for the purpose of electronically scanning, importing, organizing for retrieval and document processing using workflow processes. Gains: Through the use of this document management system, the Division was able to realign established work processes so that greater efficiencies could be realized with new document processing standards, efficient organization, and electronic routing and processing of documents. These new efficiencies have shortened AP document processing by 67% and saved an estimated $90,000 per year. Abstract Page 1

4 Abstract Page 1

5 Texas A&M University's Division of Finance is comprised of 20 departments and is one of four divisions that support the University. Texas A&M was founded in 1876 as Texas' first public institution of higher learning, and now encompasses a 5,000-acre campus in Brazos County, Texas, with 48,000 plus students and a nationally recognized faculty. In addition, Texas A&M operates two branch campuses, one located in Galveston, Texas, and one in the Middle Eastern country of Qatar. As one of a select few universities in the nation with land-grant, seagrant and space-grant designations, Texas A&M is committed to serving the citizens of Texas and the world. The Division of Finance is committed to supporting Texas A&M University in achieving its mission, which is affirmed through our mission and vision: Mission: The Division of Finance provides financial, human resources, and operational services in support of the academic, research, and service mission of Texas A&M University. Vision: To provide and promote excellent higher education business services. Our core values are aligned with and support the values embraced by Texas A&M University: Core Values are the guiding principles that direct day-to-day decision making by Finance employees. The definitions are our own, and serve to clarify expected behavior. All Finance employees should be mindful of our values in actions taken on behalf of the Division. We value: Integrity: Uncompromising commitment to do the right thing. Customer Focus: Treating our internal and external customers with courtesy and respect, while exceeding their expectations. Introduction of the Organization Page 1

6 Communication: Timely, consistent, and honest exchange of ideas, plans and decisions. Accountability: Taking ownership and responsibility for one's decisions and actions. Employee Focus: Providing an environment in which employees are valued and given the opportunity to excel. Quality: Delivering accurate, timely, consistent, and data-informed services that meet customer needs. Major Services The Division's major services are delivered through the following work units: Budgets & Reporting Chief of Staff Continuous Improvement Open Records Student and Business Affairs Finance Controller Financial Management Operations Accounting Operations Accounting Resource Center Accounting Services Payroll, Tax and Employee Resources Student Business Services Human Resources Employee & Organizational Development Introduction of the Organization Page 2

7 Human Resources Policy & Practice Review Information Technology Services Procurement & Contracting Contract Administration Facilities Finance Historically Underutilized Businesses (HUB) Programs Logistics Services Procurement Services Real Estate Development Our major services are: Resources Allocation: As a process, Resources Allocation includes but is not limited to the annual budget process, allocation of positions (internal to Finance and external), classification and compensation, and creating new positions. Acquisition: Includes, but is not limited to, facilitation of purchases, contracts, real estate and other acquisitions, and finding the best value in acquiring goods, services, and people. Communication and Information Distribution: Includes information, data, records, reporting Finance processes, and providing valuable counsel to others. Risk Assessment/Asset Management: Includes internal controls, performance evaluation, employee development, funding, recognition and reward, budget versus actual, compliance, and legislative issues. Introduction of the Organization Page 3

8 Transaction Processing: Includes transactions such as payroll, accounts payable, accounts receivable, collections, receipts, reconciliations, travel, benefits, purchasing, contracts, and mail. We provide these services to Texas A&M's departments and colleges, as well as to other members of the Texas A&M University System. Services are delivered through face-to-face contact, computer, and the internet. Finance contracts with various third-party vendors who provide services on behalf of the Division, usually through web based applications. Introduction of the Organization Page 4

9 The Division of Finance at Texas A&M University recognized many years ago that as the University grew, so would the Division s workload. As with any institution, the challenge of tracking each of the thousands of items that are processed every day has inherent difficulties. In 2002, the Division embarked on a game-changing project to electronically assist with managing mounds of paperwork, bulging stacks of invoices to pay, payroll documents to process, purchasing requisitions to track, contracts to organize, and correspondence to address. While this is a far-reaching statement, its effects have been felt throughout the Division and, as a result, the rest of the University. One area of interest to the Division was the electronic imaging and tracking of the average 1,200 accounts payable invoices processed every day. Before the Division began its document imaging initiative in 2002, the 250 plus departments on campus would create an online document number in the University s mainframe accounting system to pay the invoice, write the document number on the invoice and mail the invoice to Accounts Payable (AP) in intercampus mail for audit and approval by the AP group. Once the actual invoice would arrive AP would open the mail, stamp it with the date received in the Financial Management Office (FMO), separate the invoices according to type of documents, and put them in baskets by FMO received date order. Rush documents went in their own basket and Auditors worked rush documents first, then the oldest received dated documents next. This established procedure was very labor intensive and was itself fraught with delays and potential for human error at many points in the process. This entire process took time and led to invoices being paid near or at the standard 30 day payment due-date of many vendors. The process time included at least 3 business days for the invoice to be reviewed in the originating department (if all went well), up to 7 business days in inter-campus mail, and a average of 10 business days for processing by the FMO AP group. Statement of Initiative Page 1

10 The Division knew there had to be a better way to organize, deliver, track, and process invoices. In 2002 the Division implemented Kofax Ascent Capture for scanning documents into a document management system, FileNet Content Services for electronic filing and retrieval of documents, and FileNet eprocess for workflow processing of invoices of AP invoices. Statement of Initiative Page 2

11 As with any design and implementation of a system requiring new work processes, there is an evolutionary process that takes place over time. In the case of workflows for our AP invoices, this evolution started at the beginning of the implementation in 2002 and has continued as recently as September This paper will explain the major advances in evolutions over time in order to have a base of comparison from where the Division started and where the Division is today. This will also allow a discussion of the benefits realized along this evolutionary process Initial implementation of the system In 2002 there was an average of 24 Auditors in the FMO Office with individuals from other areas in FMO assisting in completing invoices. As described earlier, the Division initiated a document imaging system which included Kofax Ascent Capture for the scanning of documents, FileNet Content Services for document retrieval, and FileNet eprocess for Workflows. In the case of invoices for the FMO AP group, incoming invoices from departments would be separated by mail personnel into the appropriate stacks and placed into individual wire inboxes per the type of invoice. Then individual bar-coded separator sheets were placed in front of the invoices and scanned into Kofax by the imaging group. The Kofax system is comprised of four applications: Scanning, Quality Control, Indexing, and Verification. The first application, Scanning, converts paper documents into an electronic format. The second part of the process, Quality Control, allows the user to ensure that the scans are readable and in the correct orientation. The third application, Indexing, allows the user to enter indexes for each document. In the case of AP invoices, the key index is the Document Reference Number which ties all information about the invoice to different database systems. This number is written on the invoice by the department before it is sent to FMO. With this number the Division setup Design Page 1

12 multiple Host Table Lookup (HTL) queries with database downloads from the university s mainframe accounting system. This facilitates the imaging group in entering indexes. By entering only the Document Reference Number, the HTL would auto-populate all the remaining required indexes from the database. This ensures the appropriate information is entered and greatly reduces human error by hand entering the data. The Verification application is used to re-enter the Document Reference Number as an audit check to ensure the proper number was entered. After completion of Verification the Kofax system would convert the scanned image into a text-searchable PDF file and release it to FileNet. This would place the scanned invoices in FileNet available for viewing/retrieval via the FileNet Workplace web interface to appropriate personnel based on user security. The early version of eprocess for Workflows was limited to placing the individual invoices into a single queue for retrieval and processing by the AP group. Any auditor in the AP group could open the workflow queue in the web interface and select an individual item to open for viewing so that the invoice could be audited for appropriate information and complete the required indexes where the invoice could be approved for payment Revision One of the System In 2005, FileNet brought to market an updated content management system called P8 along with new modules to assist in the areas of document retrieval, records retention, and workflows. The Division found that the new suite of products would give a whole new level of capabilities not available before and on a very limited basis in other applications. The new FileNet suite of products became an integrated set of applications, each able to talk and work extensively with each other. In the past, the individual suites of applications were mainly Design Page 2

13 independent applications that, although they worked side by side each other, did not share information or work concurrently. For the AP group, the new workflow system called Business Process Manager (BPM) allowed greater capabilities. This integrated module would give the AP group the ability to separate the invoices into multiple queues and allow for a separate web page for indexes to be completed, notes to be written, move workflow items from one queue to another if necessary, and links to open the corresponding image of the invoice. More will be discussed later, but this system still required multiple web pages to be opened at the same time to allow the FMO AP auditors to complete their work on a single invoice. BPM would also give the AP group a practical way of organizing the entire AP group into separate sub-groups specializing in different types of invoices. With a more streamlined workforce specializing in specific invoices, their expertise would quickly grow and they would become more efficient. This also allowed management to develop a better understanding of where the bottlenecks existed in the system for the different types of invoices. With this information, management was able to adjust their working groups for efficiency (i.e. moving in more people to handle the heavy workload of a particular type of invoice and moving those out of areas that did not need that amount of workforce). Much of this was accomplished by the Division purchasing another tracking module called FileNet Process Analyzer. This product s sole purpose is to constantly scan the workflow databases for queue loads, individuals working invoices, and durations of invoices in the queues to name a few. All of this information is then reported through a series of Microsoft Excel pivot tables so that data can be examined in a multitude of ways. Most of the 2005 upgrade centered around FileNet and how this software could reorganize work processes and workgroups to become more efficient. The Kofax system of Design Page 3

14 delivery into FileNet generally did not change other than re-organizing the in-boxes to correlate with the new set of workflow queues Revision Two of the System In 2008 FileNet once again upgraded their product suite. This time though, most product functionality remained the same. They did, however, bring to market a new product called Business Process Framework (BPF). This product is a new java based user interface for BPM. Whereas BPM has a static user interface in conjunction with multiple administrative queues, BPF allows the creation of multiple roles with rules-based sorting of invoices into multiple inboxes based on criteria developed by AP management from a single queue. Each role is allowed to develop their own user interface based on the needs of that particular role. Thus, an administrative role would allow a manager to view in-boxes from across the entire department. A travel auditor, for example, would only be allowed to see travel invoices from their in-box, but they would have a completely different user layout that best suited that set of auditors. Additionally, the BPF interface allows for the integration of an image viewer so that, as a workflow item is opened, not only are the indexes listed, but the associated invoice s PDF image is automatically opened in the same user interface window. With all the information readily at hand, the auditors can expeditiously complete their tasks on each of the invoices presented to them for processing or move it to another in-box to be addressed by another group or manager. BPF also allows for the development of internal timers. This function allows for the development of calendar or hourly based timers to move a particular invoice with certain index criteria up the ladder of importance. For example, if an invoice is not opened for processing within 24 hours of receipt in the system it is moved to a critical level and thus automatically jumps to the head of the line to be processed next. These timers can be programmed for a host of Design Page 4

15 different criteria. Management now has a tool to track invoices in the system and can identify the area or reason these types of invoices are being delayed. Whether through external or internal reasons, management can now identify and address them in a timely manner. One of the most subtle yet important differences between the use of BPM and BPF is that in BPM the end user (or Auditor) is presented a list of invoices to process. This allows the end user to hand pick (or pull ) which invoices to work. As is human nature, the easier AP documents were worked first and the more difficult ones were left for others. Unfortunately, these more difficult documents may be the ones that should have been worked first due to their need for more intense scrutiny. Managers were usually left to work these invoices while still trying to keep up with their own daily duties. In comparison, BPF allows for a set of business rules to be implemented in conjunction with the timers to automatically present the next invoice (or push ) that should be worked to the auditor. This paradigm shift had the greatest potential to shorten the turn-over rate for the completion of invoices. Due to the programming capabilities in BPF to allow for the auto-sorting of invoices into multiple in-boxes, it opened some doors for modification to the Kofax scanning process. With the advent of the in-boxes, IT was able to begin setting up alphabetical letter designations for the multitude of in-boxes available. This allowed the imaging group in FMO to begin tagging the different invoices that were scanned so that as these invoices were released into FileNet they would automatically sort into their respective in-boxes in BPF. This greatly streamlined the process and shortened the overall processing time because now the system did the sorting and not a human in the AP group. Additionally, because of this new sorting index and through the development of good quality scanning equipment at an affordable price, the Division began instituting an SFTP delivery process by which the departments could begin scanning their own Design Page 5

16 invoices, naming them with the appropriate letter designation and document reference number and dropping them into a SFTP in box which completely cut out the inter-campus mail service process. Design Page 6

17 The original document imaging system implemented by the Division of Finance in 2002 was sub-contracted to an outside third-party vendor for the initial setup and configuration. Because this initial setup had five departments participating, there were significant issues with completion of the work in a timely manner. At the conclusion of the first year, the Division took over design and implementation with only two individuals from IT Services on a 50% time basis. After delving into the system and quickly learning how the system worked, it was found that through the use of setup templates and wizards internal to the base FileNet system, configuration was found to be relatively easy. The real challenge to not only the initial departments and IT was the reorganization of long established work practices internal to each department. It is natural that any established system of work done by hand with the use of paper will have inherent bottlenecks. As much as these work processes can be refined, there is always the human factor that tends to slow processes down. Now with the introduction of electronic filing of documents, web based search templates, and workflows for the organization of invoices to be processed (limited in 2002), all established work practices had to be re-thought and re-defined. This can be especially difficult for any organization. To the credit of the departments participating, this also gave an opportunity to completely throw out all pre-conceived work processes and start from a clean slate. All departments quickly realized that through the use of electronic retrieval and organization of their documents a great many processes could be re-invented and workforces could be realigned to meet the growing needs of the University. It became standard practice for IT Services to meet with the individual departments regularly to modify how their documents were organized and, in the case of workflows for AP documents, how those documents were routed for approval throughout the office. After each Implementation Page 1

18 meeting, changes would be made to the system as requested, the department would work with the modified work process for two to four weeks and then meet again with IT to narrow the focus of the improvements. Many times departments would organize their work practices one way only to find that they could streamline them even more. There were multiple steps along the process that were no longer necessary due to electronic imaging and processing. These multiple meetings and modifications were very helpful not only to the participating departments but also to IT as they would work in tandem with the managers and front-line workers to constantly improve the system. Again, in the case of the AP group and their use of workflows, the routing maps for different types of invoices and the possible re-routing those invoices could take made the initial maps very convoluted. As the system evolved over the years, so did the workflow process maps. They became more and more straightforward. There was less routing necessary to perform as the AP group streamlined their processes. With the inclusion of BPF in the system in 2008, there was great anticipation with the known capabilities of the module but how quickly could IT get trained and begin bringing test and production workflows online for the AP group? Initially it was believed it would take six months for training and to begin testing the first versions of the new interface. Although IT Services is very knowledgeable about the base FileNet system, BPF was a new product with unknown intricacies. Training was not offered very often during the year for this product yet the Division wanted to begin realizing their return on investment as soon as possible. A decision was made to bring in a third-party vendor with experience with this product for in-house, handson training of the two support individuals in IT. This would allow for dedicated training for the specific needs of the Division on this new product. As it turns out, the product is simpler than originally considered but that is not to say there was not a lot of work performed in setting up Implementation Page 2

19 BPF! A testament to the capabilities of the system is that from the initial day of training to the first day of the first production BPF workflow interface was six weeks. Now, because of the drag and drop nature of the BPF interface, IT can meet with the AP group in a conference room, bring up the administrative interface module and make changes to the system during the meeting as requested by the AP group. No longer does IT have to program the routing system as it used to which could take from two days to two weeks. Changes are now made during the meeting itself so that at the conclusion of the meeting when AP returns to their desk the changes are already in production and being used by the group. Implementation Page 3

20 The Division of Finance Document Imaging System has been very successful in every department in which it is utilized from the simple task of organizing documents for quick desktop retrieval, to the adherence of State of Texas record retention rules by the Records Manager module in FileNet, to the processing of invoices in a much more efficient manner in the AP group. The system has created efficiencies, saving money and time while giving the Division the ability to ensure the security of its documents not only at the main campus in College Station, Texas but for offices in Galveston, and across the globe in Qatar. To be more specific and remain on the topic of workflow processing for AP documents the following are some examples of where the Division is saving money every day: Workflows Reduction in overtime for the AP group from $16,311 in Fiscal Year 2006 to $0 in current fiscal year and no overtime projected for the upcoming fiscal year. This is a morale booster for the workforce and a cost savings to the department. Reduction of at least 1 Full Time Employee (FTE) for processing invoices/payments. Workflows in the Division s imaging system has provided efficiencies to the AP staff to begin working on more customer focused enhancements and reviewing data analysis to be more proactive for the customers of the Division. Reduction of 0.75 FTE help outside of Accounts Payable staff. The AP group is now self sufficient and does not have to rely on other areas within Financial Management Operations to help meet processing deadlines. Invoice processing turnaround in the AP group has gone from an average 10 business-day turnaround in 2002 to less than a 5 business day turnaround. For Fiscal Benefits Page 1

21 Year 2009 the average turnaround for processing AP documents was 4 days for purchase invoices and 3 days for travel. Increase in the level of audit performed on each document. In the past the AP group had to use special audit processes to get the invoices paid on time and now they are able to do more full audit processes. Before 2002 and the beginning usage of workflows it took AP an average of 9 to 12 minutes to process each invoice. With the implementation of BPM in 2005 and BPF in 2008 the AP group now processes each invoice in an average of 3 minutes. This is a 67% improvement in the turn-over rate of processing invoices. Before imaging in 2002, everyone in FMO had to pull paper documents from the file room in order to examine an AP document. If someone already had that document pulled they had to wait until that document was returned. This delayed the response time and took time away from other duties, especially auditing. Now there is no file room. Everyone in FMO can view the documents they need in imaging instantly. No more waiting for it to return or find its way out of an over-filled inbox. The documents cannot get lost or misplaced. Before imaging FMO had to mail Xerox copies of invoices or scan and them to the department if they lost their copy. The individual departments across campus now have access to view their documents in imaging, so this saves the AP group the time of having to research and answer questions regarding what was on the original invoice. Financial liaisons across campus can view their documents on their time table. Imaging/Kofax Benefits Page 2

22 Reduced from a 5 business day turnaround to a less than 24 hour turnaround getting invoices into FileNet imaging/workflow. o Streamlined the mail room. o Reduced the number of Kofax separator sheets to two, Confidential and Non- Confidential. At the beginning of imaging there were over 20 separator sheets. o Implemented FTP process for departments to scan and name invoices directly to FMO-Accounts Payable imaging server. Eliminated the need for FMO to batch and scan these documents. This process improved the security of the confidential records since they did not have to be sent through inter-campus mail any longer. Reduced lost invoices in the mail. Reduced the volume of intercampus mail that TAMU Mail Services had to handle. Reduced student workforce from 6 to none. Imaging and Data Control used to have 6 student workers that assisted with sorting and scanning. Now there are no student workers since the full time staff are able to do all of this plus the scanning for all sections of FMO. Additionally they maintain a 24 hour turnaround time. That is an estimated savings of $21,000 per year in student worker costs. The total estimated cost savings per year because of the use of electronic content management for the FMO AP group alone is $90,000 which represents a return on investment of only 14 months. Benefits Page 3

23 Due to the efficiencies gained, the Imaging and Data Control group took on the imaging work of the entire department and other departments within the Division. These are just some of the efficiencies and benefits generated by the Division s Document Management system. There are other efficiencies across every department using the system in convenience and time savings with the instant retrieval of documents and the reduction in personnel hours in records retention duties that are taken over by the document management system. Benefits Page 4

24 Benefits Page 5

25 In retrospect, the Document Imaging system has been highly successful in every department in which it has been utilized. With this type of system, each department has been able to re-evaluate their work processes and find new and innovative ways to streamline how they perform their day to day duties. The system has proven that it is a physical space saver in that many departments either no longer have or need filing cabinets. The University Payroll department used to have a room approximately 16 x 35 filled with personnel files. That room is now gone. All of their files are in the imaging system available to them 24x7x365. This type of access is invaluable to locations such as Galveston where hurricanes can approach, necessitating the evacuation of the island campus with only a couple of days notice. Their documents are securely stored electronically off-site and they can now concentrate on the wellbeing of their faculty, staff, and students in a time of need. The FMO AP group has probably benefitted the most from the system because of their extensive use of the FileNet BPM/BPF workflow system. They have had the added benefit of organizing their work processes and employees for each type of work. Not only has there been quantified monetary savings, but now their employees have the time and opportunity to cross train in other customer service areas as well. This benefits everyone in FMO, but the largest benefit is to the University which now has a faster turn-around time of documents and additional customer responses. In retrospect, there are a couple of areas that could have been handled differently. First, the Division could have implemented the system itself and brought it into production instead of relying on a third-party vendor. The cost of training the IT staff as opposed to the year long delay of the vendor configuration could have saved the Division money. Additionally, there should have been dedicated developers in IT. Although they worked as diligently as possible Retrospect Page 1

26 with very successful results, there could have been a more timely response to the overall needs across all the departments in bringing all the parts into production. Having only two individuals working on development, while also completing their other daily duties, was hard to handle. We should have had at least one more dedicated individual on the project, which could have brought the system up quicker and thus benefitted the Division sooner. Retrospect Page 2