Every day, companies’ accounts payable (A/P) teams receive a
constant stream of invoices, which are often initially sent to different sites
and departments and frequently appear in different formats. Managing these high
volumes invariably presents an administrative burden, with little or no
opportunity to predict when the billing will occur.
transparency, it can be difficult for finance to accurately manage cash flows
and gain insight required for cash forecasting – an important capability in the
current static market.
As many corporates are now discovering,
automating document management processes using digital mailroom and document
management technologies can significantly speed-up the distribution of incoming
documents within the organisation, as well as contributing to improved financial
Whether implementing a new document capture system or
improving an existing one, invariably finance and accounts teams can expect
inherent process improvements. By minimising the reliance on manual invoice
entry, the technology helps to reduce instances of human error and make finance
teams better able to cope with processing peaks, all of which can enable the
organisation to reduce debtor days and improve cash management.
Faster Invoicing Processes
In addition to improving incoming
document management, moving away from paper-dependent manual processes, and
replacing them with speedier, tailored electronic systems can have a positive
impact for corporates, their customers and supply chain partners.
Whether electronic or paper-based, invoices are subject to automated invoice
routing, which sends them directly to either a centralised internal or
outsourced production bureau. From here, each invoice is run through capture
software and as many fields of data as necessary are extracted into an
extensible mark-up language (XML) or other data file. This data, along with the
individual invoice in portable document format (PDF), are returned together
ready for automatic import into the A/P system.
The potential that
this ongoing drive to paperless invoice processes offers to both businesses and
public sector organisations has been recognised by EU Directive 2001/115/EC.
Essentially, the directive credits electronic invoicing (e-invoicing) as an
important means of promoting more efficient cross-border creation, validation,
transmission, acceptance, storage and retrieval of invoices.
2013, the European Commission (EC) issued a further draft directive aimed at
improving interoperability between different, mainly national, e-invoicing
systems. As it stated: “E-invoicing… offers the potential for significant
economic as well as environmental benefits. The Commission estimates that the
adoption of e-invoicing in public procurement across the EU could generate
savings of up to €2.3bn.”
document-intensive finance department, better document management and capture
processes can also support compliance, improve productivity and overall
efficiency in records management.
The Data Protection Act 1998 (the
DPA) sets out clear guidance on hosting and storing records, including those
relating to employees who have left the organisation. By helping organisations
remain compliant with the requirements of the DPA, an electronic capture
solution can offer important cost-saving advantages by contributing to a
reduction in storage costs.
Archiving documents electronically also
brings the added advantage of ensuring better security than manual storage, with
less risk of loss or damage. Using document classification alongside an
archiving solution will guarantee that the correct retention and disposal policy
can be quickly identified and data cleansing can be carried out on existing
records. This important capability ensures compliance whilst further increasing
the level of process automation.
conjunction with e-invoicing, electronic document capture and management systems
typically enable finance users to extract relevant data more easily. Using a
tailored solution, it’s possible to ensure that data is accurate, while the use
of document classification enables the measurable data to be quickly identified
and instantly passed to the right business stream or workflow.
an on-going business perspective, the technology offers distinct advantages for
the modern finance department and the wider business, not least the opportunity
to support compliance, ensure disaster recovery, increase staff productivity and
facilitate the cleansing of historical records. For A/P, the potential to
support greater financial transparency using e-invoicing is likely to prove
especially valuable in supporting and maintaining overall cash flow visibility.
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