Why You Should Automate Invoice Processing Today. Your organization's survival could depend on it

Transcription

1 Why You Should Automate Invoice Processing Today Your organization's survival could depend on it

2 Why You Should Automate Invoice Processing Today Contents p. 3 p. 3 p. 4 p. 5 p. 6 p. 7 Introduction Death by a Thousand Paper Cuts How to Automate Invoice Processing Painlessly What are Document Management Software & Workflow Automation? 7 Must-Have Capabilities of a Document Management Partner How to Use Invoice Automation as a Test Case for Office Workflow Automation

3 Why You Should Automate Invoice Processing Today 3 Introduction Paper invoices seem like something we should have left in the past along with rotary phones and tape recorders. Yet, most accounts payable (AP) departments still deal with large volumes of paper-based invoices, and many still process them manually. This may seem like a small problem, but just like a cough could be a symptom of pneumonia, this small problem could actually be the symptom of a much larger business problem. This paper will discuss the problems inherent with manual invoice processing, and will highlight why this problem are only the tip of the iceberg. We will then discuss how to automate the process - saving both time and money as you do and how to position an invoice automation project as a trial run for larger office automation initiatives. Death by a Thousand Paper Cuts Of all the pains and risks your business must grapple with, an overabundance of paperwork probably isn't your most pressing concern. You're more worried about direct competitors, the supply chain, customer service, and even economic forces beyond your control. Paperwork is just one of the costs of doing business, right? Yes and no. Even though the paperless office has been a goal for a couple of decades, most businesses still find that a majority of invoices (typically in the percent range) are still paperbased. That's a problem for a modern business trying to keep a foothold in the Digital Age. It takes a lot of time and effort to manually process those invoices from the time they hit your mailroom on to the approval stage, and, finally, on to cutting those checks. Then, don't forget that many AP departments will then have to manually enter data into spreadsheets and ERP systems, and they may even have to hunt for the data in the event of an audit. It's a vicious cycle that undermines efficiency and accuracy at every step. 10 Risks Inherent in This Long, Laborious, Error-Prone Process 1) Lost or misplaced invoices 2) Poor supplier relationships due to late payments 3) Financial penalties due to late payments 4) Double payments to suppliers 5) Possibility of paying for goods and services you never actually received 6) Lack of visibility into cash flow at any point in time (since paper invoices are invisible for large swaths of the processing period) 7) High costs and high error rates due to employee inefficiency and manual processes 8) More difficult and disruptive audits, since a reliance on manual processes means you'll have plenty of preparation to tackle before an audit

4 Why You Should Automate Invoice Processing Today 4 9) Not being able to find documents quickly during an audit or lawsuit or not being able to even find all necessary documents 10) Inability to keep up with competitors who have more efficient systems in place How to Automate Invoice Processing Painlessly If the status quo is broken, that's still no guarantee that the solution will be any better. To quote the French playwright Molière, "Nearly all men die of their remedies, and not of their illness." Don t expect to simply pop an automation pill to have all of your manual processes magically disappear. It's not so simple. In fact, if you choose a cure poorly, you could end up in worse shape than when you started. After all, bloodletting was thought of as a reliable cure for centuries. In this age of global markets, even small efficiencies can accumulate quickly, while unnecessary costs can act like anchors around your feet. However, you must be careful about how you apply automation to business problems. To quote Bill Gates: "The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency." Even if your existing invoice processing process is flawed, it may still have its advantages. It's a process your department understands. You probably also understand, at a very deep level, the flaws inherent in your existing process, and you know what to do when problems arise. When you automate this process, if you choose a cure poorly, the flaws will be nearly impossible to spot and the corrections will be difficult to intuit. As you seek to automate, remember your problems won't magically disappear. Rather, you will be working with a document management specialist, one with strengths you don't have, in order to solve the problem in a new way. Ideally, the specialist you select will have the expertise and experience to tackle the problem in ways you could not. What you are doing, then, is selecting a partner. Avoid one-size-fitsall solutions that you have to shoehorn your way into. Instead, find a partner who will help you review and evaluate your current processes, all the while keeping your goals in mind. In this age of global markets, even small efficiencies can accumulate quickly, while unnecessary costs can act like anchors around your feet. Only then can you begin developing automation rules based on your specific requirements and objectives.

5 Why You Should Automate Invoice Processing Today 5 What are Document Management Software & Workflow Automation? Document management is a commonly used but frequently misunderstood term. Actions as simple as throwing paper documents into a shredder can be called document management. At the same time, actions as complex as scanning, indexing, routing via automated workflow, and archiving according to retention requirements are part of a robust document management solution. It s hard to know how the term is being used, particularly when the term may be used by both technology providers and non-tech businesses. However, if you are interested in automating paper-based finance document processing for the purpose of saving money and doing more work with less labor, then you should focus on a specific type of document management software (DMS), one with built-in workflow automation capabilities. Workflow automation software allows electronic information and digital images to be streamlined for accelerated completion of critical business decisions and action. In contrast to a paper-based system that is cumbersome, labor intensive and prone to error with little or no accountability, workflow automation allows you to easily enter invoices (and any other relevant document) into your workflow management software via document scanning, e-forms or importing electronic files that kicks off an automated routing, approval and tracking process. Invoice processing is the perfect place to start automating your processes. However, if you don't adopt the right system and processes, your attempt to automate a tedious process will end up being difficult. Conversely, with the right system in place, you can automate much of the paper shuffling that goes on in the typical office even across departments. Be sure to choose a system that allows you to automate everything from invoice processing to expense reports to sales orders to common HR paperwork. 8 Benefits of Document Management with Workflow Automation 1) Boosts employee productivity because they can shift their focus away from tedious, error-prone tasks and to higher-value activities 2) Improves employee satisfaction for those same reasons 3) Provides management insight into key business processes 4) Ensures staff accountability 5) Is far more efficient than manual processing 6) Helps you avoid costly errors, which are a given with manual processing 7) Serves as audit insurance. (Auditors almost always look first to see if reliable processes are in place) 8) Delivers almost immediate ROI

6 Why You Should Automate Invoice Processing Today 6 Document management software and workflow automation are built around three logical building blocks, the ability to: (1) capture, (2) process and (3) preserve important documents or data. What differentiates one system from another is the degree of complexity required from each of the logical building blocks in order to satisfy the needs of the business application, which will eventually handle the data. 7 Must Have Capabilities of a Document Management Partner 1. A flexible delivery model. Yes, it's possible to bring a document management system in-house, but that's not typically the best option. The shift to cloud services is well underway, and delivers huge advantages. As pretty much every legacy on-premise application you can name starts shifting to the cloud, you may want to seriously consider a cloud solution. However, if that is not an option for your company, make sure the DMS can run on your internal IT infrastructure. 2. Ability to outsource things that are impossible to automate. Of course, not every single thing can be automated, but that doesn't mean it can't be outsourced in a cost-effective manner. Those paper invoices that show up in the mail? Do you really want to open the envelopes, scan them, dispose of the paper documents in a way that doesn't violate any industry regulations, etc.? Find a partner with P.O. (or mailbox) scanning services. Then, your invoices will get mailed to a specific P.O. address, and the provider can handle the manual process of opening your mail and start the automation process with scanning, without you ever having to touch the paper. The document management company will do it all more efficiently and cost effectively than you ever could. 3. Uses proven techniques and shows stability. Does the document management software provider you are considering follow industry-standard practices? Have those practices been proven over time? If they're embracing something new, do they have data to back up why they are doing this? For instance, anything can open envelopes containing invoices, from an untrained intern to an automatic letter opener to specialized postal machinery. It's no secret which of these you should avoid. 4. Offers the ability to scan and index paper invoices and e-invoices. Although going completely paperless may be a worthy goal, in the real world, paper invoices show up each and every day. If your partner doesn't scan paper invoices or can t include e- invoices in automated workflow, you'll get stuck processing half of your documents manually and

7 Why You Should Automate Invoice Processing Today 7 much of the efficiency you'd hoped for will begin to evaporate. It's a mistake to think that every document management company you deal with is capable of dealing with paper and electronic invoices. 5. Makes sure the DMS integrates with whatever ERP (Enterprise Resource Planning) system you currently use. If automation stops at invoice approval, you're not going to get the ROI you could achieve by pushing automation further. A good document management software will automatically populate your ERP with invoice processing data. This will not only eliminate the need for manual data entry, but will also expedite payments, give you near real-time visibility into a cash flow, and help eliminate errors and discrepancies. 6. Puts a premium on security and data retention. Be sure your document management software partner has the ability to securely and confidentially process and store data and images while in their possession. Also make sure the document management software you choose has the ability to securely process, track and store that data. The software should securely store processed invoices for at least seven years, and should offer easy and immediate access to all digitized documents. 7. Makes sure any workflow automation solutions you use can scale. Any business most likely has more than one tedious task that could be automated. A good document management software with built-in workflow automation is just the start. In fact, workflow automation software can help you standardize and automate routine processes in every part of your business, from AP to HR to order fulfillment. Of course, you probably don't want to start that big, but the software should be able to meet your business process automation needs now and as your company grows. How to Use Invoice Automation as a Test Case for Office Workflow Automation This is the point where many employees start worrying about their jobs. It shouldn't be. By automating tedious, error-prone tasks, employees are able to shift their focus to more valuable activities and many of these activities are things that would deliver greater value to the organization, but which never get done. Why? No one has time to actually do them when buried under paperwork. Office workflow automation can help transform AP from a cost center to a much more strategic part of the organization.

8 Why You Should Automate Invoice Processing Today 8 Other tasks that office workflow automation can tackle include expense reports, order fulfillment, audit compliance, HR onboarding and much more. If you are going to take time to invest in invoice processing automation, now is the time to think bigger and figure out how to make the transition reliable and repeatable, so your business can embrace automation bit by bit, as the need arises and as the value proposition becomes crystal clear.

9 It s time to take control of your AP department. Automate your invoice processing today! Call (888)

10 About Digiscribe & Digiscribe New England Digiscribe transforms the way companies, healthcare facilities, non-profit organizations and government agencies manage and process their documents with document scanning services, document management software and workflow automation services. Companies engage us to solve their business process problems with a portfolio of services and software that is supported with technical expertise, superior customer service and over 25 years of experience. Our New York office is one of the first SOC 2 Type 2 document conversion centers in the New York tri-state area and our Massachusetts office is centrally located to serve New England. All staff are HIPAA compliance trained www.