In any business process within an organisation, there is always a drive to make procedures more efficient, more effective, reduce operational costs and improve outcomes. The same drivers can be applied to the task of manual keying and data entry tasks, when processing supplier invoices into an organisation’s Financial / ERP software.
Previously, an administrator would manually copy and key-in the relevant information from a physical paper invoice into an ERP or Financials software. This task can be quite labour-intensive and likely to incur human errors.
Some larger invoices with many pages and several invoice lines can be very time consuming to administrate.
Accounts Payable has usually been viewed as a business expense to an organisation and therefore the department is continually being scrutinised for efficiency savings whilst maintaining service levels to the business.
A number of questions can be raised to choose whether to elect a different way of extracting the data from the supplier invoices and other financial documents:
- Is the current process efficient (i.e. the cost of manual keying of data – taking into account an administrator’s time and wage costs) particularly for large invoices with many lines?
- Is this the best use of a human resource?
- Could we not utilise the administrator’s time in more ‘value-add’ tasks?
- Could we outsource the administration tasks to a third-party?
- How can we improve data quality and data validation?
- Could we do more (i.e. process more invoices) with less (people)?
- Could we reduce the cost of processing each invoice – could we take virtually all the cost from processing invoices?
- What are the ‘bottlenecks’ in the process – what supporting evidence do we have?
- Are there ways of reducing paper and people – posting to Financials ‘in the dark’?
- What methods could we introduce to reduce paper?
- Which are our most problematic suppliers?
- Do we need to print out the large volumes of emailed attachments?
The introduction of technology to extract the relevant information from supplier invoices could be considered and is attractive to many organisations who wish to streamline their accounts processes.
The return on investment (ROI) is usually the primary business driver for replacing manual keying with the latest technology – but there are several other softer benefits, such as, employee retention – and more emphasis is given to supplier contact, management, reporting and problem solving.
In addition, the accuracy of the data is now standardised with multiple checks to ensure that the data is validated (i.e. the invoice net, tax and gross amounts arithmetically agree) and accurate (i.e. the date is correct, the invoice addressed to the correct legal entity or company code, the document is a supplier invoice and not a credit note, the supplier is recognised on Financials / ERP application, or a one-time vendor)
The invoice reading software from FIS, FIS/fci – has been designed to minimise the degree of manual keying when processing supplier invoices. Combined with the increase in power of IT hardware (server and modern scanners) – using advanced technology is now a very affordable method of automating and enhancing the process.
In general terms, the FIS/fci invoice reader imports a batch of scanned invoices (or email attachments) and applies several OCR (optical character recognition) engines to the document. (The OCR technologies converts scanned data to machine readable code).
At first, all invoices will be new to the system. FIS/fci uses a family of technologies working together to extract the required data.
These include “Freeform Recognition” – a technology which ensures the solution is conditioned to look for the relevant data (i.e. invoice number, PO number, date, net amount, tax – positions/invoice lines etc.)
With time, the system becomes conditioned to store the co-ordinates of the relevant data in its own data or “intelligent knowledge base”.
If the freeform recognition technology is unable to find any other requires fields – the invoice is past to an operator for completion. These supplier corrections are also added to the knowledge data base.
Screenshot of FIS/fci screen
In summary, FIS/fci can increase the functionality and efficiency of SAP invoice management saving you time, money and manpower.