Replacing Human Touch Point…Not the Human Logic
Too often business improvement is just about automation without optimization. When optimizing a business process one must always ask the question “what value does this step add”? When dealing with the every growing meta data processed in an ERP such as SAP, this question becomes most relevant. The transformation from transactional to process flow requires that you take this evaluation and expand it to “what value does this step add and does it require human intervention”. Expansion of the evaluation criteria provides true optimization. As an example, consider the Accounts Payable portion of the procure to pay (P2P) process flow. Typically in a manual process flow there are numerous touch points that require a human touch point to apply logic to evaluate the invoice meta data and make a decision. These touch points include but are not limited to data capture, filing of paper invoices, evaluation of meta data for completeness and accuracy, account assignment and invoice approval. With a fully optimized accounts payable solution such as offered by SAP with SAP Invoice Management, it is possible to build a rule set that captures much of the human logic required to process an invoice and to apply that logic systematically.
Rule Categories Examples
Completeness – Most business processes are based on processing meta data. In AP, the initial meta data is on the invoice. SAP requires that certain information be provided by the supplier. One option is to have a human look at every invoice to see if all the required information is provided. Just one missing data point can result in non value adding time spent researching and collaborating to fill in the blank. Business rules utilize the human logic captured in code to test that every required field provide some meta data. At this point it may be wrong but at least it is there.
Master Data Validation – Once the meta data capture is complete, business rules compare the input against known values in master data to ensure it is valid. One example would be to ensure the purchase order provided on the invoice is within the SAP number range. If not, automatically route to a predetermine role for resolution.
Compliance (Legal Requirements) – Business rules can also ensure that information legally required or required by corporate rules is included. One example is VAT. Business rules can also ensure proper flow of information such as NFE requirements in Brazil.
Country Specific – Most countries have rules to do business in their specific country such as NFE in Brazil mentioned above or GST / PST in Canada. Human logic encapsulated in a business rule never forgets to ensure the information is there for selected countries but does not bother looking when the invoice is from another country.
Best Practice – Business rules can also ensure best practice such as capturing at least 2 approvals for invoices over a stated dollar level threshold.
Most Common / Most Practical – Business rules can also be made flexible so that while typically enforcing process flows such as the 2 approvals required, given selected variables, rules can deviate if it is more common in a specific company to acquire 3 signatures. If due to lack of staff in a remote location one person orders, received and approves purchases, rules can be set to allow one person to handle the process flow in a practical manner.
Reporting on the Rules
When the business process is initially designed for optimal results and automation is applied such as with SAP Invoice Management, it is critical reporting provides process metrics for human analysis. It may be necessary to adjust the follow due to changing business rules. In addition, automation should never be hidden in the “black box”. It is all too easy for those with fraud on their minds to use automation to their advantage if no one is watching the output…so…when you eliminate the human element during the process…do not eliminate the human element in review of the output. Even if you utilize automated trend analysis to spot trouble points, it always requires that human element to decide if variations are random or “randomly on purpose”.
Don’t Rule out Success…Rule in Success!
Not only does the application of business rules enable improved accuracy in the Accounts Payable process flow, it frees up the Accounts Payable Professional to focus more attention on those value adding task such as cash flow management and vendor relationships. The economy has resulted in cyclical employment levels in back office functions like Accounts Payable. Capturing and automating the human logic where possible, prevents the loss of critical process knowledge during economic downturns.
In my various speaking engagements, I often ask how many things typically go wrong when processing an invoice…the answers normally vary between 5 and 15. SAP Invoice Management applies 47 unique business rules and if you consider many are run twice…once for PO invoices and once for Non PO Invoices…the rules are applied 71 times. Checking an invoice with 47 rules rather than 15 yields significant improvement in the completeness and accuracy of financial data while ensuring compliance. In summary, utilize business rules as an integral component of your business process improves initiatives to drive increased success to your efforts.
Friday, July 23, 2010
Sunday, July 4, 2010
How To Communicate Without Saying a Word
How to Communicate Without Saying a Word
This can be a difficult challenge in the world of Accounts Payable when working to post invoices accurately and quickly. Just accurately and quickly alone is a major task but when you add “quietly”…is it really possible?
Think of all the people involved…Accounts Payable Professionals, Approvers, Corporate Procurement, Field Procurement, Receiving, Contract Management, Master Data Management, Tax Professionals…just to name a few. There are a number of Vendors offering solutions to address the accurate and quick...although in many cases you have to decide…do you want it accurate or quick…one or the other but not both. Yet very few address the quietly issue. Why is this important? For invoices that are received and immediately posted without any human intervention due to issues such as problem resolution or approval, communication is not a critical factor. Yet when that 80/20 rule kicks in where 20% of your invoices result in 80% of the problems, the Accounts Payable Professional must reach out and communicate. They need to communicate with the individuals that have both the knowledge and security authorization to resolve / approve invoices as required by best practice separation of duties. As an example, in an ERP such as SAP this communication is often started by running a report such as MRBR to find invoices blocked for payment. Without a solution that includes “quietly” as a building block, the first communication triggers a barrage of activity including but not limited to emails, phone calls, entries into spreadsheets for follow up, follow up calls, making copies of invoices and pulling contracts.
So how do you add “quietly” to the process flow? You must examine the entire process flow from how you receive the invoice, how you capture the meta data at the header and line item level, how you determine if there is a problem and then who must be involved to resolve / approve. Equally important is anticipate what that person requires to complete the task…such as…access to invoice and related document images, history of others that have worked on the process including their comments, transactional data such as purchase order, goods receipt, prior postings to purchase order and options to resolution / approval.
One excellent example of a “quite” solution is provided by SAP with their SAP Invoice Management and optional OCR.
One last thought…quiet extends to reporting also…you need to anticipate the need for information related to the invoice. While invoice payment status is certainly important you must also anticipate others will want to know trends such as invoices paid without problem and if a problem…what type of problem is most common. Yet a truly quiet process goes beyond the expected reporting…the invoice occurred because of a purchase…the purchase occurred due to a larger business process such as a building project and so on. You must anticipate that others must be able to see the invoice as part of the bigger picture. This bigger picture is ECM. You would expect that a large ERP would anticipate this more holistic requirement and SAP has also done that by providing an ECM solution through it partnership with Open Text that takes the invoice and quietly makes it available as part of the ECM big picture. This allows you to see for example all the invoices from one vendor on one project in one virtual view or to see all the invoices related to the project regardless of vendor. No longer is it required to communicate and ask the Accounts Payable Professional to accumulate all the related information and wait for a response…it is already waiting for you to access immediate and quietly.
So…Accurate…Quick…Quiet…yes it is possible!
See SAP EcoHub for More on AP Optimization
This can be a difficult challenge in the world of Accounts Payable when working to post invoices accurately and quickly. Just accurately and quickly alone is a major task but when you add “quietly”…is it really possible?
Think of all the people involved…Accounts Payable Professionals, Approvers, Corporate Procurement, Field Procurement, Receiving, Contract Management, Master Data Management, Tax Professionals…just to name a few. There are a number of Vendors offering solutions to address the accurate and quick...although in many cases you have to decide…do you want it accurate or quick…one or the other but not both. Yet very few address the quietly issue. Why is this important? For invoices that are received and immediately posted without any human intervention due to issues such as problem resolution or approval, communication is not a critical factor. Yet when that 80/20 rule kicks in where 20% of your invoices result in 80% of the problems, the Accounts Payable Professional must reach out and communicate. They need to communicate with the individuals that have both the knowledge and security authorization to resolve / approve invoices as required by best practice separation of duties. As an example, in an ERP such as SAP this communication is often started by running a report such as MRBR to find invoices blocked for payment. Without a solution that includes “quietly” as a building block, the first communication triggers a barrage of activity including but not limited to emails, phone calls, entries into spreadsheets for follow up, follow up calls, making copies of invoices and pulling contracts.
So how do you add “quietly” to the process flow? You must examine the entire process flow from how you receive the invoice, how you capture the meta data at the header and line item level, how you determine if there is a problem and then who must be involved to resolve / approve. Equally important is anticipate what that person requires to complete the task…such as…access to invoice and related document images, history of others that have worked on the process including their comments, transactional data such as purchase order, goods receipt, prior postings to purchase order and options to resolution / approval.
One excellent example of a “quite” solution is provided by SAP with their SAP Invoice Management and optional OCR.
One last thought…quiet extends to reporting also…you need to anticipate the need for information related to the invoice. While invoice payment status is certainly important you must also anticipate others will want to know trends such as invoices paid without problem and if a problem…what type of problem is most common. Yet a truly quiet process goes beyond the expected reporting…the invoice occurred because of a purchase…the purchase occurred due to a larger business process such as a building project and so on. You must anticipate that others must be able to see the invoice as part of the bigger picture. This bigger picture is ECM. You would expect that a large ERP would anticipate this more holistic requirement and SAP has also done that by providing an ECM solution through it partnership with Open Text that takes the invoice and quietly makes it available as part of the ECM big picture. This allows you to see for example all the invoices from one vendor on one project in one virtual view or to see all the invoices related to the project regardless of vendor. No longer is it required to communicate and ask the Accounts Payable Professional to accumulate all the related information and wait for a response…it is already waiting for you to access immediate and quietly.
So…Accurate…Quick…Quiet…yes it is possible!
See SAP EcoHub for More on AP Optimization
Sunday, May 9, 2010
You Never Know What You Never Know
You Never Know What You Never Know
Fact or Fiction
I have heard it said that “you only know what you know and you never know what you never know”. In Corporate Accounts Payable, this is a dangerous scenario. Below is a sampling of not knowing…
How Much?
It was a Friday afternoon, sun shining and birds singing…everyone was happy at a large CPG company. Everyone knew their products because they were constantly advertised. Just after lunch their major advertising vendor called and wanted to know why they had not been paid the $5,000,000 owed to them. The AP Manager reviewed the account with the CFO and they determined they only owed $500,000. They called the vendor back and told them they did not have the invoices. The Vendor explained they mailed them to several different Division VPs. When the CFO contacted the VPs, they found the VPs had the invoices on their desk. They all had reasons for not having sent the invoices to AP.
What they did not know…$4,500,000 in liabilities past due!
Why it mattered…Vendor will not do more business until paid. They want 50% payment up front. Balance Sheet would have been understated.
Give Me My Car
Business was going great for chemical company. They sales people were happy because the company had recently decided to provide nice company cars. As part of the fleet deal, the CEO was also provided a car. The cars were routinely maintained by the leasing vendor. After a scheduled maintenance appointment, the CEO stopped by to pick up the car. The dispatcher checks the computer and then told the CEO…”No. You can’t pick up the car until your company has paid its bill”. The CEO became very familiar with the Accounts Payable Manager.
What they did not know…each month the Fleet Manager had to approve the invoice. The Manager had gone out on long term disability and the person taking their place was not aware of they had to approve. They thought the invoice was just a copy for their file.
Why it mattered…Vendor was also refusing to return several cars in that time period. Several on the sales team were missing appointments. A very large early payment discount was being lost.
The Log Ride
Much like the long line at the popular log ride at the amusement park on a hot summer day, the Accounts Payable Professional at an energy company had a very long backlog. They had recently gone through a merger and their work had grown significantly…without much additional labor. Overtime became routine and temporary personnel had been brought in. It just so happened that one of the employees “retired” during the merger saw an opportunity to commit fraud through false billings. The situation was compounded in that the invoices from the “factious company” were being handled by a temp with a backlog. Only after a post merger audit was the activity uncovered.
What they did not know…significant payments were being made to factious vendors.
Why it mattered…money was lost and never recovered. Showed others how easy to commit fraud.
Only when the Accounts Payable process is under control will these stories move from real life drama to fiction. Implementation of an automated rule driven process optimization will significantly improve Accounts Payable processing. As the stories above would promote…control receipt of invoice along with movement of meta data from invoice to general ledger, strictly control and monitor invoice approval and invest in efficiency gains so that Accounts Payable Professionals have the time to properly analyze the invoices.
See SAP EcoHub for More on AP Optimization
Fact or Fiction
I have heard it said that “you only know what you know and you never know what you never know”. In Corporate Accounts Payable, this is a dangerous scenario. Below is a sampling of not knowing…
How Much?
It was a Friday afternoon, sun shining and birds singing…everyone was happy at a large CPG company. Everyone knew their products because they were constantly advertised. Just after lunch their major advertising vendor called and wanted to know why they had not been paid the $5,000,000 owed to them. The AP Manager reviewed the account with the CFO and they determined they only owed $500,000. They called the vendor back and told them they did not have the invoices. The Vendor explained they mailed them to several different Division VPs. When the CFO contacted the VPs, they found the VPs had the invoices on their desk. They all had reasons for not having sent the invoices to AP.
What they did not know…$4,500,000 in liabilities past due!
Why it mattered…Vendor will not do more business until paid. They want 50% payment up front. Balance Sheet would have been understated.
Give Me My Car
Business was going great for chemical company. They sales people were happy because the company had recently decided to provide nice company cars. As part of the fleet deal, the CEO was also provided a car. The cars were routinely maintained by the leasing vendor. After a scheduled maintenance appointment, the CEO stopped by to pick up the car. The dispatcher checks the computer and then told the CEO…”No. You can’t pick up the car until your company has paid its bill”. The CEO became very familiar with the Accounts Payable Manager.
What they did not know…each month the Fleet Manager had to approve the invoice. The Manager had gone out on long term disability and the person taking their place was not aware of they had to approve. They thought the invoice was just a copy for their file.
Why it mattered…Vendor was also refusing to return several cars in that time period. Several on the sales team were missing appointments. A very large early payment discount was being lost.
The Log Ride
Much like the long line at the popular log ride at the amusement park on a hot summer day, the Accounts Payable Professional at an energy company had a very long backlog. They had recently gone through a merger and their work had grown significantly…without much additional labor. Overtime became routine and temporary personnel had been brought in. It just so happened that one of the employees “retired” during the merger saw an opportunity to commit fraud through false billings. The situation was compounded in that the invoices from the “factious company” were being handled by a temp with a backlog. Only after a post merger audit was the activity uncovered.
What they did not know…significant payments were being made to factious vendors.
Why it mattered…money was lost and never recovered. Showed others how easy to commit fraud.
Only when the Accounts Payable process is under control will these stories move from real life drama to fiction. Implementation of an automated rule driven process optimization will significantly improve Accounts Payable processing. As the stories above would promote…control receipt of invoice along with movement of meta data from invoice to general ledger, strictly control and monitor invoice approval and invest in efficiency gains so that Accounts Payable Professionals have the time to properly analyze the invoices.
See SAP EcoHub for More on AP Optimization
Monday, April 5, 2010
Accounts Payable Shared Service - Round 2
Accounts Payable Shared Service - Round 2
In past years, the never ending search to increase corporate productivity led down a path to shared services. It quickly became apparent that one quick win was Accounts Payable. In round 1 many corporations equated shared services with moving the same functions to a less expensive labor pool. Obviously direct labor cost was reduced so this was deemed a success and others joined the movement. As the demand grew, basic economics kicked in…the law of supply and demand. The demand grew for skilled workers. In some areas once thought of as the place to move the tasks, the workers now move every few months due to double digit wage increases. The net result is the people processing your invoices are entry level and about the time they are trained; they are off to another company. When you compound this with the issues around time zones, language and scalability; the winner of round one may not be so clear.
As corporations reexamine their shared service concept, they are often finding that moving the transactional functions back within the corporate walls makes more sense. This is especially true when they take advantage of the process optimization and automation provided by ERP such as SAP Invoice Management by Open Text. The new solutions provide the ability remove non value touch points while replacing critical manual touch points with immediate electronic touch points. This is not to say human logic is eliminated, rather it ensures when required, the right person has the right information at the right time. In addition, AP processes now have a single point of contact. Standard process is the rule rather than the exception.
The winner of round 2 is definitely the corporation that utilizes the strength of an ERP combined with process optimization and automation. Best of class invoices are received and posted immediately without human interaction and those invoices that have an issue are resolved and posted in 1 – 3 days. Cash management is optimal, balance sheets are correct and timely and reporting promotes continual process improvement.
What will determine the winner of round 3…mobile AP functionality, dynamic discounting, ERS, standard invoice format, vendor networks, ?
See SAP EcoHub for More on SAP Invoice Management
In past years, the never ending search to increase corporate productivity led down a path to shared services. It quickly became apparent that one quick win was Accounts Payable. In round 1 many corporations equated shared services with moving the same functions to a less expensive labor pool. Obviously direct labor cost was reduced so this was deemed a success and others joined the movement. As the demand grew, basic economics kicked in…the law of supply and demand. The demand grew for skilled workers. In some areas once thought of as the place to move the tasks, the workers now move every few months due to double digit wage increases. The net result is the people processing your invoices are entry level and about the time they are trained; they are off to another company. When you compound this with the issues around time zones, language and scalability; the winner of round one may not be so clear.
As corporations reexamine their shared service concept, they are often finding that moving the transactional functions back within the corporate walls makes more sense. This is especially true when they take advantage of the process optimization and automation provided by ERP such as SAP Invoice Management by Open Text. The new solutions provide the ability remove non value touch points while replacing critical manual touch points with immediate electronic touch points. This is not to say human logic is eliminated, rather it ensures when required, the right person has the right information at the right time. In addition, AP processes now have a single point of contact. Standard process is the rule rather than the exception.
The winner of round 2 is definitely the corporation that utilizes the strength of an ERP combined with process optimization and automation. Best of class invoices are received and posted immediately without human interaction and those invoices that have an issue are resolved and posted in 1 – 3 days. Cash management is optimal, balance sheets are correct and timely and reporting promotes continual process improvement.
What will determine the winner of round 3…mobile AP functionality, dynamic discounting, ERS, standard invoice format, vendor networks, ?
See SAP EcoHub for More on SAP Invoice Management
Thursday, January 28, 2010
Standard Invoices
Why not require all vendors to submit standard invoices? If you are like me, you can immediately start thinking of reasons this will never work but it has already worked for some. For years trading partners using SAP have utilized edi to send invoices in a predetermined format.
With the continual pressure to reduce cost, many corporations are moving to electronic invoicing but paper still constitutes the majority of invoices. To reduce the cost of processing paper invoices many corporations are implementing OCR solutions such as the optional OCR included with SAP Invoice Management by Open Text. Having a standard format for invoices would significantly enhance the OCR process. Even for those entering invoice meta data manually, standard invoice format would significantly reduce the time per invoice.
With a standard format, it would be expected that the vendor logo be located in one section and header information would always be found in the same place. Typical line item details would also always be consistent in format. The standard may need to be of several variations such as one for services and another for goods. The format should also be international so as to include relevant tax information.
Changing is never easy but a onetime investment in the effort could reap continual rewards in efficiency. While it would not be realistic to expect 100% participation, even if a corporation achieved 50% standard format invoices, major improvement would result.
The continuing pressure on profitability may be just the impetus to facilitate moving an old idea into the mainstream.
See SAP EcoHub for More on AP Optimization
With the continual pressure to reduce cost, many corporations are moving to electronic invoicing but paper still constitutes the majority of invoices. To reduce the cost of processing paper invoices many corporations are implementing OCR solutions such as the optional OCR included with SAP Invoice Management by Open Text. Having a standard format for invoices would significantly enhance the OCR process. Even for those entering invoice meta data manually, standard invoice format would significantly reduce the time per invoice.
With a standard format, it would be expected that the vendor logo be located in one section and header information would always be found in the same place. Typical line item details would also always be consistent in format. The standard may need to be of several variations such as one for services and another for goods. The format should also be international so as to include relevant tax information.
Changing is never easy but a onetime investment in the effort could reap continual rewards in efficiency. While it would not be realistic to expect 100% participation, even if a corporation achieved 50% standard format invoices, major improvement would result.
The continuing pressure on profitability may be just the impetus to facilitate moving an old idea into the mainstream.
See SAP EcoHub for More on AP Optimization
Thursday, January 21, 2010
AP and Hot Topics for 2010
The following are four Accounts Payable “hot topics” I see for 2010…
1) Paper is still with us! It appears that the movement to electronic invoices continues but at a slower pace than might have been expected. Paper invoices are still the most common form of invoice receipt. The good news is that Optical Character Recognition has improved and the focus is now on accuracy in reading the line item information accurately matching to the PO line. There appears to be greater cooperation between suppliers and their customers to ensure the necessary information is available on the invoice required for proper matching. The optional OCR for SAP Invoice Management by Open Text is being adopted by many SAP centric AP departments.
2) Whether driven by the economy or the desire to increase value to the corporate stakeholders, many corporations are moving to a shared service center for Accounts Payable. The concept of moving the functions to a cheaper labor pool and calling it shared services has had mixed results. What has been exposed is that locating AP in a remote geographic location can result in communication issues. Problems go unresolved for longer periods of time. To facilitate world class shared service centers, corporations are implementing enterprise solutions such as SAP Invoice Management by Open Text to provide controlled business processing. Not only are these solutions improving the day to day transactional processing they are generating information to internal and external clients that allow for continual business improvement.
3) Fraud is nothing new to corporations but too often the focus has been on reporting that detects the fraudulent activity after it has been committed. The cost of fraud recovery can be staggering. Many corporations pay out 30% - 50% of their gross revenue back out to suppliers through Accounts Payable. The fraudulent actives around AP are well documented but until recently, prevention was dependant on a human catching the attempt. In 2010, corporations are moving to implement business rule driven solutions that test for activities such as billings from suppliers not in their system. In addition these solutions provide the metrics to highlight trends such as a single vendor continually overbilling.
4) Last but certainly not least…Accounts Payable personnel are being recognized for the Professionals they are. Organizations such as International Accounts Payable Professionals (IAPP) are providing focus on the power of an Accounts Payable Professional. As mentioned above, AP is critical in fraud prevention. In addition, the optimization and automation of the day to day processing has allowed AP to focus on cash management improvements, improvement in accuracy of financial statements through accurate liabilities and proper inventory valuation and providing thorough and timely financial information to stakeholders from Operations to the CEO. It is becoming common for corporations to require a professional certification of all Accounts Payable personnel upon realization that Accounts Payable is a key component in a world class business!
See SAP EcoHub for More on AP Optimization
1) Paper is still with us! It appears that the movement to electronic invoices continues but at a slower pace than might have been expected. Paper invoices are still the most common form of invoice receipt. The good news is that Optical Character Recognition has improved and the focus is now on accuracy in reading the line item information accurately matching to the PO line. There appears to be greater cooperation between suppliers and their customers to ensure the necessary information is available on the invoice required for proper matching. The optional OCR for SAP Invoice Management by Open Text is being adopted by many SAP centric AP departments.
2) Whether driven by the economy or the desire to increase value to the corporate stakeholders, many corporations are moving to a shared service center for Accounts Payable. The concept of moving the functions to a cheaper labor pool and calling it shared services has had mixed results. What has been exposed is that locating AP in a remote geographic location can result in communication issues. Problems go unresolved for longer periods of time. To facilitate world class shared service centers, corporations are implementing enterprise solutions such as SAP Invoice Management by Open Text to provide controlled business processing. Not only are these solutions improving the day to day transactional processing they are generating information to internal and external clients that allow for continual business improvement.
3) Fraud is nothing new to corporations but too often the focus has been on reporting that detects the fraudulent activity after it has been committed. The cost of fraud recovery can be staggering. Many corporations pay out 30% - 50% of their gross revenue back out to suppliers through Accounts Payable. The fraudulent actives around AP are well documented but until recently, prevention was dependant on a human catching the attempt. In 2010, corporations are moving to implement business rule driven solutions that test for activities such as billings from suppliers not in their system. In addition these solutions provide the metrics to highlight trends such as a single vendor continually overbilling.
4) Last but certainly not least…Accounts Payable personnel are being recognized for the Professionals they are. Organizations such as International Accounts Payable Professionals (IAPP) are providing focus on the power of an Accounts Payable Professional. As mentioned above, AP is critical in fraud prevention. In addition, the optimization and automation of the day to day processing has allowed AP to focus on cash management improvements, improvement in accuracy of financial statements through accurate liabilities and proper inventory valuation and providing thorough and timely financial information to stakeholders from Operations to the CEO. It is becoming common for corporations to require a professional certification of all Accounts Payable personnel upon realization that Accounts Payable is a key component in a world class business!
See SAP EcoHub for More on AP Optimization
Friday, November 27, 2009
Should AP Departments Consider OCR?
Over the past few years Optical Character Recognition (OCR) has always been a topic of discussion with AP Departments looking for process improvement. Over the last year it has become a “hot” topic! Every single client I talk with has decided on implementing OCR or is strongly considering implementing OCR.
Why the recent change?
Corporations are looking to not only automate functionality but as I have stated in past blogs, they are very focused on process optimization by elimination of as many touch points as possible. With high volume invoice processing, data entry has always been not only a bottleneck but also a point of input errors that result in rework. To post paper invoices immediately after scan without human intervention is not possible without OCR.
Another contributing factor is the significant improvement in the accuracy of the invoice capture. A few years prior, unless invoices fit a set of specific patterns or templates, departments spent too much time manually adjusting OCR invoices. Some of the early adopters found the successful hit rate at the invoice level so low the resulting value was marginal or less…resulting in some abandoning the use of their OCR solutions. Today, OCR solutions such as the Optional Optical Character Recognition option for SAP Invoice Management utilize advance capture logic that is much more accurate than templates alone.
The resulting accuracy improvement capturing both header and line item invoice meta data and the corresponding reduction in data entry now make OCR a solution very much worthy of consideration.
See SAP EcoHub for More on AP Optimization
Why the recent change?
Corporations are looking to not only automate functionality but as I have stated in past blogs, they are very focused on process optimization by elimination of as many touch points as possible. With high volume invoice processing, data entry has always been not only a bottleneck but also a point of input errors that result in rework. To post paper invoices immediately after scan without human intervention is not possible without OCR.
Another contributing factor is the significant improvement in the accuracy of the invoice capture. A few years prior, unless invoices fit a set of specific patterns or templates, departments spent too much time manually adjusting OCR invoices. Some of the early adopters found the successful hit rate at the invoice level so low the resulting value was marginal or less…resulting in some abandoning the use of their OCR solutions. Today, OCR solutions such as the Optional Optical Character Recognition option for SAP Invoice Management utilize advance capture logic that is much more accurate than templates alone.
The resulting accuracy improvement capturing both header and line item invoice meta data and the corresponding reduction in data entry now make OCR a solution very much worthy of consideration.
See SAP EcoHub for More on AP Optimization
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