AP Automation – the 5 options
We’re delighted to welcome Lars Kjærsgaard as one of our first guest bloggers. Lars is an International Sales Manager & Account Manager at EDB Consulting Group in Denmark and has some great insights into successfully moving toward 100% electronic invoicing.
In my mind there exist at least 5 methods/ways to either automate or semi-automate invoice entry:
SEMI-AUTOMATE – manual entry from scanning w/o OCR
E.g. small Company Codes (sales companies) with very small Invoice handling needs. Split screen with manual account assignment in one screen-part and the invoice in the other – afterwards triggering workflow if needed.
SEMI-AUTOMATE – from scanning with OCR
Well-known scanning, interpreting and verification processes in scanning software. Manual verification of invoices and registration in the ERP system afterwards, triggering Approval Workflow if needed.
Aim at FULL-AUTOMATE – from scanning with OCR
Same as above but with “Autoverify” enabled when all data fields are fully recognized in the interpretation process – hence sending scanned invoices directly into the ERP system, without human interaction. “Autoverify” can be enabled on vendor level at any time. Hence Workflow is triggered automatically if needed.
Aim at FULL-AUTOMATE – from PDF Invoices received in emails
The solution automatically monitor one or multiple e-mail addresses. When e-mails received in the e-mail account, the solution detaches the PDF invoice(s) into a folder which is monitored by the scanning/OCR solution. When the automatically detached e-mail invoices are detached into monitored folder, the OCR/Interpretation process starts. If all Invoice fields are fully/100% recognized (and Autoverify is enabled) – invoices are sent to the ERP system with no human interaction. 100% automated. “Autoverify” can be enabled on vendor level at any time. Hence workflow is triggered if needed.
FULL AUTOMATE – from 100% electronic (EDI) supplier / VANS provider
When implemented and tested thoroughly, EDI invoices can be matched and posted very large scale. Of course it depends on a number of factors, e.g. the purchasing processes performed before invoice receipt, Goods Receipt and very much the state of material master data and vendor master data. In Denmark we have customers that receive 80% of their invoices from EDI – and after a vendor master data optimization period, a material master data optimization period – the large scale main road is 100% match from invoice positions with Purchase Order positions, hence posted automatically and automatically released for payment.
Our customers have their special characteristics and represent different company-cultural maturation stages regarding receiving and handling invoices. But it is not a case of choosing one of the methods above – all methods can co-exist at the same time without any problems. It is pure activation and configuration of the solutions modules. If the right solution is chosen, the solution offers receiving and handling processes that match all cultural maturity stages – mixed or not mixed.
In 2005 in Denmark it was legally required that companies could deliver electronic invoices to public companies. It was decided by the Government. This was a very, very big enabler for 100% e-invoicing in the private sector, and 100% e-invoicing is a pretty common solution in some business. Still some businesses lack cultural maturity to receive and deliver e-documents.