Happy Last Year!

As most corporate personnel start the year with anticipation of the New Year, Financial personnel are starting the process to close the books and prepare financial statements for the Past Year.

The next few weeks will be a constant flow of emails and phone calls attempting to ensure all sales are properly recorded and all liabilities are accurately accrued. Included in the Accounts Payable effort, there will be a scramble to ensure paper invoices floating around in the corporation are sent to financial department.

Adding to the paper nightmare is the fact that many corporations also choose the start of the New Year to implement new policies, guidelines and procedures.

Finally the mantra of the day is “I need this yesterday!” tops off what is already a frustrating stressful scenario.

So what would turn this around to create a true Happy Last Year? Most of the needless inefficient use of valuable resources to shuffle paper could be replaced with leading edge ECM solutions such as provided by Open Text. New procedures, policies and guidelines are available for immediate use to ensure compliance. For example, SAP Document Access enables the elimination of the majority paper shuffle, phone calls and emails by providing immediate access to all unstructured documents and procedures required to properly record sales. Combining SAP Invoice Management with Document Access ensures accurate and timely handling of liabilities by also providing immediate access to policies and procedures as well as supporting documents and by automated problem detection and resolution through business rules and workflow.

Enabling Financial Personnel to quickly and accurate close the books and prepare compliant financial statements without all the frustration of manual paper driven processing goes a long way to move from Happy Last Year to Happy New Year!

See: http://ecohub.sap.com/catalog/?search=open+text#!solution:documentaccess

See: http://ecohub.sap.com/catalog/#!solution:SAPVIM

Do We Know Too Much

Information Evolution
Last week I attended the Open Text Content World Annual Conference and something I don’t normally specifically think much about hit me right between the eyes…the importance of knowing the right information. Not too many years back, business decisions were mostly based on either a conversation or a written narrative. Information generated internally and information gather externally was extremely limited. While radio greatly expanded verbal communication; television adds the visual. Still information that formulated enterprise content limited effective business decisions. Now we have the computer, networks, web and the cloud. We are adrift in a sea of meta data, searching for information!
Information or Meta Data
What one person has distilled from their vast sea of meta data as information may only be a single data point to another person. If we are not diligent, our decisions may be driven by incorrect, incomplete or irrelevant information. At Content World, there were thousands of individuals sharing information…through direct conversations, social networks and video. Just as these individuals must determine what information is important to them, corporations must undergo the same process.
SAP and Information
ERPs such as SAP provide the ability to break down business information at the most granular meta data level and then provide transactions to compile and visualize the meta data into meaningful business processes such as financial processes. When you combine the SAP structure with the vast unstructured associated documentation, one begins to wonder how any corporation effectively manages the content not to mention accessing the correct information when making financial decisions. I venture that most of us have made a less than good business decision and when confronted we respond with…”I did not know about that” or “when did the procedure change” or “no one told me”…sound familiar?
My Personal Journey
Much of my business journey in the financial world has occurred with not enough information. Now like many of you the pendulum has swung and I have more information than I can possible ever use, so how do I find my way? The answer is Enterprise Content Management. It is relating supporting documentation to financial transactions, it is utilizing business rules that ensure the right information if available to the right person at the right time. Open Text ECM combined with SAP connects the dots so that financial decisions I once made based on very limited information is now based on relevant, timely and fully accessible up to date information. I find myself asking “where have you been all my life”.
Examples
If the CFO reports to the external stakeholders that the company profit has improved this sounds great if you have no other information. If you can quickly determine how it compares with past years, how it compares to competition, are there legal or tax issues or has a merger impacted the results…your decisions may change from great to something else.
Another example is if a vendor bills you and you think the price or quantity delivered is incorrect, you need to know all the information related to the transaction. SAP Invoice Management by Open Text is one example of the financial tools available to optimize the financial process. On the flip side when a customer disputes a billing, similar documentation is required to prove the billing is correct. Having access to the non structured emails, delivery tickets and such combined with a rule driven electronic communication results in an a decision based on all the information, not just a best guess at the time.
So, it appears to me that the problem is not We Know Too Much rather we need to utilize the proper tools like SAP, Open Text ECM, social networks, e-books and yes even person to person conversations that enable us to make effective business decisions.
For more information on SAP and Open Text see… http://www.sap.com/community/ebook/2011_SAP_Opentext/en/index.epx

Are E Invoices Always Correct?

Over the past year, I have noticed a rebirth of the concept that if the information came from a computer it must be correct. One example is an e invoice. The electronic exchange of meta data between trading partners has been around for a long time but most of these routines such as edi also include varying levels of error detection and collaboration. What I have observed is that some embrace e invoicing as a way to eliminate invoice errors. The reality is that merely changing the output format does nothing to change the source of the invoice meta data. There are several business solutions that include routines to "clean up" the meta data before transferring it to an ERP such as SAP but many of the decisions as to how to resolve the incorrect meta data still must come from the receiver of the invoice. Just detecting the problem and sending the invoice back to the vendor often does not eliminate the problem. For SAP clients, SAP Invoice Management by Open Text, allows the corporation to still receive the e invoice seamlessly but then analyzes the meta data for problems and if detected, a notification is immediately routed to the person with both the knowledge and responsibility to correct the meta data. It also provides a critical component where incorrect electronic meta data is analyzed for trends thereby allowing the corporation to address the root cause. Of no surprise...the root cause is often an issue with the origin of the meta data.

One of the first computer terms I learned was GIGO...garbage in garbage out. Changing only the method of invoice delivery often cause more problems than it solves...but...if done in concert with a solution such as SAP Invoice Management...the rewards can be significant!

See SAP EcoHub for more on SAP Invoice Management

Heard at SAP Sapphire

I recently attended and presented at the annual SAP Sapphire conference in Orlando. I expected to see strong interest in optimization of back office functions but after years of attending this event, I was amazed to see the high level of interest specifically around invoice process optimization. One personal example…I conducted a micro forum related to SAP Invoice Management where we expected 10 -15 people…the final attendance was 60 people.
In discussions with many of the attendees, I found a significant growth interest related to vendor networks such as provided by Crossgate and dynamic discounting (DD). The adoption of DD will drive corporations to invest in solutions such as SAP Invoice Management to ensure they achieve a high rate of straight through processing. DD will also require invoice exception processing to occur in very few days as opposed to weeks.
I also see the increased adoption of vendor networks driving standardization of invoice meta data content and format; not unlike what edi has driven in the past. This will be slow to evolve but I think will eventually happen.
One topic that caught my attention…Shared Service. While not a new topic, I feel a combination of searching for efficiency gains and control combined with merger and acquisitions has created renewed interest in shared services. The major difference this time around is focus is on utilizing technology and out of the box solutions such as SAP Shared Services Framework & SAP Invoice Management as opposed to prior efforts that focused on moving to less expensive labor pools.

Accounts Payable and Social Networks

I recently attended a presentation related to how Accounts Payable Departments might utilize social networks. This really got my attention since we at OpenText have long considered social networks as a means to enhance sharing of information ranging from individual contributions through departmental actions to corporate messaging. Open Text provides a tool “Pulse” as part of our ECM solution to assist with information sharing.
By using Pulse, organizations can take advantage of a Facebook-like social media environment within their existing Open Text ECM Suite deployments and move informal communications out of email, thus dramatically reducing dependence on inefficient and slow email chains. Additionally, it offers a way for people to collaborate rapidly in real time, while creating a secure knowledge base for new employees and team members. Pulse is a major step toward enabling customers to capture their organizational memory through the archival of formal and informal user conversations.
So…how can those in the business process around Invoice Processing utilize social networks? While I believe the use is unlimited, I will focus on a few examples.
Individual Information Sharing or what would an Accounts Payable Professional want others to know. By using tools like Facebook, Twitter, Pulse, etc an individual can inform others when they will be out of the office or they may want to share recently achieved Professional certifications. They may want to inform a group such as selected suppliers of upcoming requirement changes. Information might be shared with internal clients on payment activities.
Departmental Information Sharing – The department may want to share internal statistics such as on time payments and discounts earned. They can recognize those process participants that helped to achieve new success with invoice processing. The department may want to announce staffing changes such as retirement, promotions or transfers. They may want to create groups for selected participants such as procurement so they can immediately address resolutions being handled with SAP Invoice Management. For me, I am now able to know if one of my colleagues is traveling to the same event that I may be attending. I can also see when colleagues are on vacation…live vicariously through their adventures…makes my work day a little more pleasant.
Corporate Information Sharing – Your shared service center may want to utilize social networks to introduce policy changes to both internal and external clients. As with the Department, they may want to announce staffing changes. They may desire to communicate real time with internal Accounting Departments related to closing activities such as accruals. The use of the OpenText Pulse would be a great tool to increase the visibility of current policies and regulations. I for one monitor real time changes to travel budgets as well as new presentations that others may have saved to the content server. I don’t have to wait and hope I receive an email telling me about new presentations.
Let me know…how are you using social networks to improve your corporate contribution?
For more information on SAP Invoice Management http://ecohub.sdn.sap.com/irj/ecohub/solutions/SAPVIM
For more information on OpenText Pulsehttp://www.opentext.com/2/global/products/products-collaboration/products-opentext-extended-collaboration.htm

Problem Invoice: Post or Return to Supplier

I was recent ask by a client when they should send a problem invoice back to the supplier or should they continue to process the invoice.

Variables to Consider

There are several variables that should be considered when making the decision. For this discussion the first variable assumption will be that the corporation has implement SAP as their core system of record. You must also consider if the invoice input channel is paper or electronic. If you are digitizing the paper invoice, you should consider if you want to scan and create an image before returning or return before imaging.

Manual Process

If you process invoices manually, returning the invoice may seem like the simple approach but keep in mind you must keep some record (typically a spreadsheet) that the invoice was received and returned. If you have already received the goods and / or services, you must still ensure proper accounting for the liability regardless of the invoice.

Automated Process

If you have optimized your Accounts Payable processing utilizing a solution such as SAP Invoice Management, the decision shifts to a best practice of processing the invoice to the point of problem detection and review of problem. This optimization allows for fast analysis. Often the invoice is correct and the resolution requires changing the transactional data such as goods receipt. In other situations, it is more relevant to possibly short pay the invoice and if required to issue a debit memorandum.

Audit Consideration

Even if the resolution is to return the invoice to the sender, processing to the failure point and then sending the invoice back creates a strong audit trail related to the original source document. This audit is often needed for disputed payments.

Returning the Invoice

One major consideration with most vendor master files is the correspondence information includes only the contact information required to purchase from the vendor. If you are returning the invoice, it is the vendor Accounts Receivable department that requires notification. The usually prompts the question …“do I have to update thousands of vendor masters”? The answer is typically no. You would only update the vendors that you do the majority of business with and / or those you know have historically sent problem invoices. After that, you utilize reporting metrics to observe when a trend evolves and update the vendor master at that time.

One last decision is whether to include the original paper invoice or an imaging of the original invoice when communication with the supplier that you will not be processing the invoice. If electronic or if OCR is used for paper invoices, sufficient invoice meta data can be included in the notification email. If the meta data has not been captured, then it typically would improve the process by attaching a copy of the invoice. Being able to return an image not only reduces cost but also provides effective control for the Accounts Payable processing.

So…to return or not to return…that is the question…and as with most complicated business processes the answer is “it depends on the circumstance”.

See SAP EcoHub for more information on SAP Invoice Management

Electronic Invoicing…A Dog Chasing the Car

What is Electronic Invoicing? Just a simple search of the internet provides several answers. What is the correct way to write the term…spell it out or abbreviate with big E or little e? Does this relate to outbound invoices or inbound invoices? Is this just EDI? I ask for your comments based on my observation below…when you hear e-invoice…what comes to mind?
For my comments, I will use e-invoice and assume it relates to inbound invoices and I will assume that SAP is the backend solution. Invoices can be received electronically through several methods. EDI has been around for many years and seemed to have reached its peak. Most major trading partners were EDI enabled. EDI also requires a specific internal skill set to maintain. The maturity of EDI provides a proven electronic methodology but somewhat relegated to large corporations. Both large companies and small to mid size receive invoices through direct loads from vendor website and upload of files sent from Vendors. The direct link to Vendors is common with purchasing cards while files uploads are common with utilities. All of these electronic methods have in common the elimination of mail room activity and manual data entry. Another commonality is that all may still contain errors in the invoice meta data. Some consider fax or email attachment as electronic but both of these typically require first capture of the image and from that point they are handled the same as paper invoices.
There is a current trend to consider electronic invoice presentment and payment (EIPP) to be e-invoicing as provided by vendor networks. These networks accumulate invoices (typically those invoices still received by paper) from multiple Vendors and then submit them to the respective multiple clients…a many to many relationship. While these networks continue to be unique to specific providers, it is assumed they will eventually provide the ability to “roam” similar to cell phone networks.
Regardless of how a corporation receives e-invoices, it is how you process the header and line item meta data that creates significant additional value to e-invoicing. Moving from paper to e-invoice does not eliminate the vendor from providing incorrect meta data. It does not remove the labor required to correct invoice meta data, to route for approval or to report on the overall end to end processing. It does not provide the necessary process control or audit trails. SAP not only provides the vendor network capabilities through their Crossgate solution, they also provide SAP Invoice Management which is designed to work with all forms of e-invoice.
So not unlike the dog chasing the car…it is what you do with it when you catch it that makes the story most interesting.

See SAP EcoHub for more information on SAP Invoice Managment