Document Solutions Expand Beyond Accounts Payable

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2 Table of Contents Abstract... 3 Introduction... 3 Accounts Payable: Beyond Invoices... 3 Accounts Receivable: Tax Exemption Certificate Management.. 4 Accounts Receivable: Other Options... 4 Accounting... 4 Banking and Finance Industry... 4 Education... 5 Government Healthcare Healthcare Insurance Human Resources Insurance Purchasing... 7 Sales... 7 Compliance Metrics and Benchmarking... 8 Conclusion

3 Abstract Business consumers have begun to realize the substantial benefits of using fully functional accounts payable automation solutions. These solutions combine granular line-item data capture, enterprise resource planning (ERP) integration and data entry, and sophisticated matching/decision processes to reduce the costs associated with the AP process by some 50 percent to 70 percent, while reducing errors and providing a credible audit trail. While many customers have addressed the concept of AP automation, the majority of solutions lack the integration or sophistication to deliver the maximum value and systemic improvement, leaving many parts of the process still manual or problematic. This results in companies remaining susceptible to gaps, from a process and financial perspective. The next phase of innovation extends the same concepts to other transactional data and documents that are associated with ERP systems and business processes. Examples include sales orders, bills of lading, contracts, packing slips, supplier and customer master data, HR documents, insurance statements and claim forms, credit applications, and historical records. Through the use of advanced data capture, appropriate ERP integrations, and complex decision-making criteria, these next levels of business processes can be automated to produce similar systemic benefits to the AP process. These benefits include: Reduced processing time and costs. Better data availability throughout the organization. Electronic storage and retrieval. Reduced data entry errors and detailed audit trails. Automated exception handling and error identification. The ability to link workflows and initiate independent processes. The use of a well-integrated workflow system to manage the additional transactional processes that are not supported by the ERP system will save time and money, provide management with crucial information, and reduce the need for manual labor in the back office. Introduction The global market for integrated document solutions will continue to grow at a rapid rate as companies apply the same concept they have used in accounts payable within other departments of their organization. In addition to streamlining the processes to achieve greater efficiencies for the entire company, the integrated document solution will help create expanded visibility, enhance the audit process, lower costs, and assist in the development of a business continuity plan. The intent of this white paper is to spotlight the vertical markets and functions that could use advanced or integrated document solutions to drive the efficiency and effectiveness of an organization to a new level. Accounts Payable: Beyond Invoices Normally, document solutions related to accounts payable are focused on the receipt of an invoice and the workflow associated with processing the invoice. However, other tasks that can be enhanced by the use of a document solution include providing easy access to: Supporting documentation such as a contract, agreement, or special approval, or other correspondence related to the invoice. Out-of-cycle payment requests related to early payments, in order to enforce payment terms identified in the vendor master file. Positive Pay files for those companies that do not have an ERP system that already stores this information. Invoices to resolve vendor disputes and to facilitate audit requests, available in real time versus leaving the AP professional trying to figure out the location of the hardcopy invoice. A repository of travel and entertainment expense documents such as statements, reports, and receipts. Procurement card backup such as receipts and statements approved by the employee and supervisor to facilitate a centralized storage strategy. 3

4 Accounts Receivable: Tax Exemption Certificate Management Without a document storage solution, companies can exert the effort to obtain tax-exempt certificates from their customers, or lose track of them within the organization. Medius Software can offer a best practice solution that will centralize the storage of the certificates, which will result in a streamlined storage solution. Benefits of the electronic solution include the reduction of repetitive requests to the same customer, reduced duplication of effort by all of the functions involved in the sales process, and a more efficient training opportunity for employees. The solution allows certificates to be stored by customer name, number, and applicable state. Finally, the solution would allow the management of tax certificates by issuance and expiration date, and prepare the department for audits and to react to any new legislation regarding the requirements related to taxexempt certificates. There is a definite benefit to managing the process using an independent database; however, achieving the full benefit would require integration with your ERP system. Therefore, to receive the full benefit of the process, it should be integrated with your billing and/or order entry systems. This would confirm that customers are billed in the correct manner, and reduce the amount of rework tax refund or credit rebill resulting from tax that was either billed incorrectly or not billed. Accounts Receivable: Other Options In an effort to eliminate paper from the process, other options within accounts receivable could be enhanced by incorporating an integrated document solution. These include: Customer credit applications Customer master forms Lien waivers and bonds Legal packages submitted to third-party collectors AR write-offs and cash moves Accounting In the accounting function, an integrated document solution can allow streamlined processes, increased visibility, and improved audit and compliance processes. This is a key point because the accounting team is preparing financial statements that will be reviewed by senior management. Some tasks that can be streamlined through this process include: Electronic storage of journal entries and the associated backup. Journal entries are normally requested during an audit. Account reconciliations and the associated backup. Similar to journal entries, the account reconciliations are usually requested during an audit. Fixed asset management, including original paperwork for the purchase, the depreciation schedule, and the fixed asset record. Companies are always challenged with ensuring that their list of fixed assets is accurate, and the integrated document solution process can help streamline the process. In addition, the benefit of implementing an electronic storage system is that historical records can be centralized and easily accessible for future reference. There is always the risk of paper being destroyed or lost, which could result in an audit issue for the organization. Banking and Finance Industry With today s advances in technology, banks and financial institutions that process applications and paperwork in a streamlined manner can stay one step ahead of the competition. The solution allows banks and financial institutions to gain the following efficiencies: Lower costs as manual intervention and paper are eliminated from the process Faster turn-around time for tasks such as opening accounts and processing credit card applications Better compliance with audit and regulatory requirements Stronger controls to prevent fraud, benefiting both the bank and the customer Tasks that can incorporate integrated document solutions include: Mortgage and loan processing Account opening Credit card application processing, which allows for loan applications to be processed efficiently while all applicable documents are gathered Archiving financial documents and data 4

5 Check fraud prevention/risk management, including the requirement to check signature cards when processing a customer transaction to verify the person is authorized to make a purchase Assistance with internal and external audits to ensure all required paperwork is completed and is compliant with government and banking regulations, with retrieval available on a real-time basis. Why is this important? In order to process a mortgage or loan, many documents are required from a variety of sources. In some cases, individuals have already provided information for a previous mortgage or loan, and bank personnel could simply retrieve that information instead of requesting that it be provided again. Signature cards are normally filed away or reside on an individual s computer and are not easily accessible. This factor alone may discourage verifying the signature, as it can be a laborious process to complete the verification process. During an audit, whether internal or external, the auditors will require a large sample of data, which normally is stored in boxes in a file room. Electronic storage significantly reduces the amount of time required to produce the requested information, so it expedites completion of the audit and allows bank personnel to focus on providing a high level of customer service. A document solution will allow: The elimination of paper, and creation of a centralized electronic repository. Security to be restricted to those individuals who need to review the information. Real-time visibility to information, which could take days if hard copies need to be retrieved. Multiple individuals to access information at the same time. Positioning for disaster recovery planning. Education School districts and institutions for higher education are faced with managing thousands of student records, which may reside in the form of paper documents or microfilm. A document management solution can result in savings from eliminating paper, and will help in locating prior student records in a timely manner. A document solution can facilitate the storage process for: Online access to student registration packets Student records, even those that date back, including transcripts Fleet records for buses or other vehicles Food service records Personnel records Financial statements and records to support audits School board minutes Purchasing information such as bids, quotes, and purchase orders In addition to saving storage costs, the solution allows for realtime access to records, irrefutable document integrity, and more efficient use of resources for other tasks. Government Government agencies face the same challenges as the public sector, but in most cases they have the added pressure of being required to provide documents to the public upon request. Document management solutions can provide the following benefits: Improved record retention accuracy Instant access to any document from remote locations Scanned copies of historical records Disaster recovery protection Documents can be defined as: Invoices Contracts Personnel records Correspondence Compliance forms Spreadsheets Manuals Citizen records The solution allows individuals from different entities of government agencies to access a centralized repository, and assists in the effectiveness and efficiency of the process. 5

6 Healthcare There are several benefits of incorporating an integrated document solution into the healthcare industry. These benefits include: Real-time and simultaneous access and visibility to patient records. Prevention of the loss of medical history from paper documents being destroyed, lost, or misplaced. Availability of patient records on a remote basis to assist with emergencies. Access to prescriptions, which can be filled from multiple locations. Expedited communication of test results or medical procedures. Tasks than can incorporate the use of integrated document solutions include: Storage and maintenance of electronic health records. Patient accounting. Patient questions and surveys. Prescription processing. Healthcare Insurance Within the healthcare industry, a majority of the payments are covered by insurance companies. When payment is received, it is accompanied by an explanation of benefits (EOB) document, which can be between one and several hundred pages. Therefore, it is not feasible to manage this process without a document management solution. In addition to the traditional reasons for electronic storage of documentation, compliance plays a huge role because lost documents identified during an audit can cost an organization several thousand dollars in fines. Human Resources In addition to the vast amounts of information that is maintained on file for an employee, there are several other processes that an integrated document solution can help facilitate: Monitoring of benefits and vacation time Employee on-boarding and out-boarding processes. Management of community service and charitable contribution initiatives. Implementation of a self-service portal for employees to look up pertinent information. The overall benefits of this solution include: Automated document customization, which facilitates mass employee communications. Version control to ensure the correct documents are being reviewed. Automatic document approval workflow to shorten the lead time for paperwork to be processed. Capture and storage of electronic signatures for use as a confirmation mechanism to ensure documents are read. Insurance Regardless of the type of insurance, such as property, automobile, life, and health, a significant amount of paperwork is generated. Insurance companies can capitalize on integrated document solutions by using them to perform such tasks as: Handling quotes for potential customers. Accessing complete customer files. Processing renewals for current customers. Processing claims. Processing documents involved in underwriting. Customer service and surveys. Implementation of disaster recovery protocols. The overall benefits to insurance companies include the elimination of volumes of paper, which will lead to a reduction of paper expense and storage costs. In addition, the solution can facilitate the scanning of documents directly to a customer account, ensuring quick access and improved customer services. With the improvement of internal processes, an insurance company can expect to see an increase in word of mouth and referral business. The competitive nature of the industry requires that questions about rates and benefits are handled quickly and claims are addressed in an expedited manner. The use of e-forms Centralized storage of all employee records, including paperwork when employee is hired, medical or leave documentation, and performance reviews Access for managers to applicable information on employees Approval and escalation workflow tied to human resource information. This can be either a bolt-on module to your ERP system, or an upload to your automated solution with updated HR information. Recruitment and applicant tracking 6

7 Purchasing In a perfect world, the purchase-to-pay process can be 100 percent automated, from the initial submission of the purchase order to the payment out of the ERP system. In addition to the electronic storage of a vendor invoice, several other documents can be linked to a vendor, purchase order, job number, or payment. These documents include: Requests for quotations (RFQs) and the associated bids. Vendor master information and due diligence supporting documentation. With an increased focus on fraud management, it is imperative to store the due diligence documentation in a central location in case it is required for an audit or fraud investigation. Purchase requisitions, which are submitted by the person requesting the product or service. Requests made to the supplier or customer related to topics such as a change in address, pricing, or a quality issue. A copy of each original agreement, to ensure that it is aligned with the purchase order and invoice. Agreements usually apply to services provided. Purchase orders which should reflect the pricing, terms, and conditions identified in an agreement. A copy of change orders to ensure that any changes in agreements or purchase orders are recorded. Exceptions and cancellations, which should be maintained in case a legal issue surfaces. Contracts, including terms and conditions, which are usually applicable to purchases of raw materials or products. Receiving records play a key role in the resolution of disputed invoices with a vendor. A centralized repository using barcode or optical character recognition (OCR) technology can provide real-time access and visibility to the following types of records: Packing slips, which accompany shipments and include itemized detail related to the contents of packages. These documents are compared with the products received, and then the receipts are recorded in the ERP or inventory system. Shipping records, which track the path used to get items from seller to buyer. Bills of lading, which are included in addition to packing slips and serve as contracts for the shipping company, identifying when the title for the goods transfers from seller to buyer. The electronic storage and centralization of these records allows the accounts payable team to significantly reduce the amount of time required to work with receiving departments or freight carriers in an effort to reproduce the information. Overall, the benefit of increasing penetration of an integrated solution can be measured with key performance indicators that look at issues such as supplier document deficiencies and internal bottlenecks. Sales Integrated document solutions can allow a sales force, either centralized or decentralized, to manage the order entry process with document imaging or bar coding technology. In addition, workflow can be used to facilitate the process of electronic approvals. Some of the processes that can be managed with this technology include: Sales order entry, which eliminates the potential for lost invoices. The sales order entry can be managed with optical character recognition or barcode technology. Proposal management, which can be managed though the development of a proposal, using information that is stored in the solution, coupled with relevant information related specifically to the new RFP. Once the final proposal is complete, it can be routed for approval and then sent to the potential customer in an electronic format. Modifying or cancelling an order. Change orders can be processed similarly to how a new order is processed, using optical character recognition or barcode technology. Contract management, which can be streamlined with an electronic approval process. Cycle times are reduced for collaboration of new contracts, leveraging of existing contracts, and the overall approval process. Depending on the complexity of the integrated solution, it could be feasible to connect processes involved in contract creation, review, negotiation, approval, execution, and overall contract management. Storage of pricing schedules, which can then be used as a cross-reference to develop proposals, manage contracts, and enter sales orders. Customer surveys. These can be generated, and then the results stored and published, with an integrated document solution. A cross-reference table can be created to ensure the correct point of contact receives the survey for completion. In addition, the solution can be used to display the results as the surveys are filled out and sent back. Development of a sales tool kit, which allows the sales force and other members of the organization to view reference materials such as sales leads, proposals, contracts, and even sales presentations. The benefits of this integrated solution include more efficient processing times, integration with the current ERP system, reduced costs associated with the sales and logistics function, real-time tracking of orders, and an improved level of customer service. 7

8 Compliance This white paper has provided ideas for many opportunities for an organization to expand its horizon for document management. It is evident that technology for managing documents has increasingly improved in functionality during the past decade. From a compliance perspective, companies must have the ability to locate key supporting documents at any given time. In addition, document management solutions can allow a company to control the lifecycle of a document, and to purge the document after the record retention period is no longer applicable. In the past, the process of locating paper documents was laborious, unreliable, and not cost effective. The IRS has loosened its documentation requirements and now will allow a soft or electronic copy to be presented as backup. Metrics and Benchmarking The increased use of integrated document solutions can streamline processes, improve customer service, and lower costs within an organization. A common trend moving forward when participating in benchmarking studies will show an increased amount of automation, which is a key driver in positioning your organization as a top performer. Conclusion The overall intent of this white paper was to present you with options over several vertical markets. The nature of your business, coupled with the expectations of your customer base, will determine whether you choose to use business process management, records management, workflow document management, or an integrated document solution. Similar to invoice scanning and workflow, an integrated document solution provides benefits that include an increased level of compliance, enhanced security, improved efficiency, process consistency, reduced costs, improved accessibility, and more effective disaster recovery. About Medius Medius delivers best in class automation and workflow solutions to ERP users around the world. Medius offers leading solutions to increase efficiency and to automate business processes. Mediusflow is a powerful, user-friendly and web based ERP independent workflow platform with a range of applications including AP automation, P2P, sales order entry and similar processes. The flagship solutions in Mediusflow are the accounts payable automation and purchase-to-pay solutions, with a powerful matching engine. Mediusflow enables companies to quickly move from idea to solution for automating, improving and optimizing business process that enhance typical business applications (ERP). About The Institute of Financial Operations The Institute of Financial Operations is the umbrella association comprising four membership affiliates for finance professionals: International Accounts Payable Professionals (IAPP), International Accounts Receivable Professionals (IARP), the National Association of Purchasing & Payables (NAPP), and The Association for Work Process Improvement (TAWPI). Based in Orlando, Fla., with offices in Boston and London, The Institute serves as a global voice, chief advocate, recognized authority, acknowledged leader, and principal educator for people in financial operations, with a particular focus on accounts payable, accounts receivable, procure-topay, automation, document management, and data capture. Combined, the affiliates have more than 6,000 members. Under The Institute, the affiliates share one board of directors, one staff, and a single portfolio of member benefits available to all, including Financial Operations Matters magazine and a new website launched in late Each affiliate maintains its own customized brand, events, career resources, volunteer opportunities, online tools and other leading-edge resources, and educational offerings including e-learning and certification. 8