This is the last part of a three part series. Read part one – Can AI and RPA automate my accounts payable process? Read part two – How can Robotic Process Automation drive efficiencies in your Business’s back-office?
In this final post of the series, I want to go back to the beginning and review how digitisation can be delivered.
To realise a tangible ROI from any digitisation project the paper elements must be converted to a data stream. Without data the AI or Robotic applications are effectively ‘dumb’ technology.
Creating a data stream is challenging, as converting paper to data through OCR can be problematic. Alternatives, such as EDI, XML and portals can be expensive and necessitate human input which can be time consuming and error prone, so what are the options?
Evaluated Receipt Settlement (ERS) is one step further towards digitisation and the paperless office. Also called self-billing, this is where the buyer and seller have made a commercial arrangement whereby the buyer, not the seller, automatically posts an invoice document onto its financial application, based on the data in the purchase order and subsequently, the goods receipt. It is important to follow the applicable tax authority rules on self-billing, but once in place with agreements the benefits can be significant.
- The buyer has control of the data flow.
- All electronic – no need to manually key data
- Transactions automatically recorded in their finance application.
- Reduction of fraud – No PO no Pay
- Improved cash flow / planning capability
The Risks & Issues
- Self-billing is not appropriate for all types of spend and is dependent on a strong P2P process and data
- Time consuming roll-out – supplier specific agreements required
- The process can lead to confusion between the trading parties
If strict rules are applied and followed an ERS agreement can save both parties having to manually process an invoice, but as stated there are challenges!
The other method, for which I make no apology for repeating, is the use of the ubiquitous email – in this instance an application generated PDF invoice.
All PDFs are not the same
Just to clear up any confusion, there are big differences between an image PDF and a machine print data PDF. In simple terms:
- If you scan to PDF then you create an image file and to access the content you need to run OCR.
- If you create a word document and save to PDF, this is an application generated or ‘born digital’ PDF and the data in this file format can be accessed without OCR.
The principal is the same for generating a sales invoice or a purchase order: the application simply has to print to PDF. Many if not all finance and ERP applications can produce a data PDF as a manual or automated process alongside the delivery method, i.e. email.
I’ve Seen The Future, As Well As The Past…
Over the years I have seen procurement portals, e-invoicing and xml self-mapping applications come and go in the market. I would suggest the failure of many these businesses is the scale of the financial, process and technology barriers which they impose for the supplier to send their invoice…the result is low and slow adoption.
Paradoxically, trading partners send and receive emails every day, there is no cost, no printing, no stationary and no postage. An emailed document has an audit trail, can trigger an automated acknowledgement and where a data PDF is attached, the receiving party does not have to rely on OCR, but instead – assuming they have access to the appropriate technology – can automate the capture and upload of the required data.
It is blindingly obvious to me, and many others, that what is required is a global adoption of email and attached data PDF submission across the supply chain. In order to achieve true digitisation and the paperless office, with 100% accuracy– data PDF email is the answer!
Top Tips for Digitisation
To make a success of your digitisation and automation strategy for either the accounts payable or accounts receivable process, in my view there are some fundamental elements to factor in to not only the solution design but also and importantly the business case to measure success;
1. Ensure you have a detailed process flow of the target process
2. Measure all the touch points to ensure you have an accurate picture of the time and costs for the end to process now.
3. Implement an end to end process measure for the new process so you can measure the new solution against the required business outcomes.
4. Choose a process that can be easily adopted by the masses without barriers to entry (use a method that everyone is used to – email!)
5. If you are the receiving party, ensure you understand all the data fields and rules that you need to apply to automatically post an incoming document – without human intervention. Then mandate the compliance and rejection process.
6. Sell the benefits of the digital and automated process to all stake holders to encourage compliance and effective change management;
a. Supplier – it’s free, you get a receipt acknowledgement, the invoice will be processed quicker and paid early or to terms!
b. Buyer – no scanning, no OCR, no key correcting as the data from a digital PDF will deliver 100% data accuracy) automated rules will reject non-compliant documents and automate the rest. The touch points and cost to process will be significantly lower.
7. Welcome and enjoy an automated and digital world!
By Steve Britton Client Services Director – Global Accounts at CloudTrade