Great article by Mark Brousseau on the IAPP website this month....pasted below...
The economic downturn has many technology companies reeling. But you won’t find providers of invoice scanning solutions complaining. Their business continues to grow at a brisk pace:
• Bob Fresneda, president of ReadSoft North America, said his company has seen no let-up in the number of attendees to its webinars, the prospect calls it receives, or its Web traffic.
• Diversified Information Technologies CEO Scott Byers said his service bureau is seeing more demand for outsourced invoice scanning. “Companies are going paperless as a way to reduce cycle time and cost,” he said, adding that Diversified Information Technologies now provides digital invoice conversion services to roughly 10 percent of its more than 500 customers.
• Jim Bunn, national business development management, for IBML, sees increasing demand for automated invoice processing technology as part of corporate shared services initiatives.
• Paul E. Diegelman, vice president of finance and accounting optimization for BancTec, said, “Although capital remains constrained to many corporate buyers, and many companies are still in cash-conservation mode, the recent broader economic improvements have allowed both ‘lookers’ and ‘buyers’ to get back into the market for AP automation solutions.”
With new technology pushing invoice automation beyond the back office to the front lines of the enterprise, some say invoice automation could experience even faster growth in the future.
The recession as a ‘catalyst’
So why has invoice automation grown so fast at a time when other technologies are limping along?
“Economic conditions in theUnited States
“Prior to the economic downturn, automating invoice processing was not necessarily top of mind for most CFOs because they were focused on tasks such as compliance,” noted Andrew Pery, chief marketing officer at Kofax. “But when they looked at invoice processing, they discovered that they could achieve short-term gains by taking paper out of the process, and improve compliance in the bargain.” He noted that electronically stored invoices provide more accessibility and better visibility.
Diegelman said cost considerations are driving interest for invoice solutions from “the healthcare, consumer services and manufacturing verticals, with meaningful interest from a number of others.”
“Industries that are subject to substantial regulation and frequent audits are leading the charge for adoption,” said Jim Thumma, vice president of sales and marketing for Optical Image Technology, Inc., pointing to financial services, insurance, and healthcare. “However, as businesses in other industries start searching more earnestly for cost reductions that don’t compromise services to their customers, it’s likely that invoice processing automation will be adopted there as well.”
But there’s another reason the economic downturn has spurred invoice processing automation.
“Everyone is familiar with the ‘lower cost, increase efficiency, do more with less’ pitch, but with the state of the economy in the last 12 months, we’ve seen improved cash management as a key driver,” commented Fresneda. “Being able to accrue all expenses and know when invoices are due allows executives to manage their cash better. It also provides better visibility into outstanding liabilities.”
Bud Viancourt, director of commercial sales for Hyland Software, noted that, “one of the best, and certainly most proven, ways to maximize cash is to better control financial operations.”
“By eliminating manual data entry, accurate data is available much faster, giving companies the ability to approve invoices more quickly and make business decisions more effectively,” said Shrage.
The role of technology
Today’s leading invoice processing solutions rely on a combination of optical character recognition (OCR) engines to maximize data capture; are easier to customize according to existing business processes; and are less dependent on data capture templates, which typically provide mixed results.
A key trend in invoice processing solutions is that corporate buyers expect implementations to be far quicker and more efficient than they have been in the past. “Six months and hundreds of thousands of dollars for setup and implementation are out of the question. A compressed ‘time to value’ is required,” Diegelman said. With improved technology that allows business-user configuration, rather than costly and time-consuming IT-driven customizations, 45-day implementations that generate the expected business case are now achievable – and corporate buyers expect it, he said.
One of the advancements in invoice processing technology is the concept of cascading matching. Cascading matching is similar to traditional PO-based invoice matching, Diegelman explained, but it allows for an expanded range of data elements from an expanded range of source documents (such as contracts and approved purchase lists) to be matched during the invoice approval process. The benefit for the corporate buyer is an automated process that results in far fewer “exceptions invoices” that require manual intervention in order to complete the invoice approval process, Diegelman said.
Although it’s not exactly new, Thumma noted that more companies also are e-mailing invoices in the form of PDFs that can be stored, securely accessed, and managed within a content management system and easily pulled at the right time into the electronic invoicing process. “This helps them to deal with accountability, compliance, and audit issues, and provides efficiency gains,” he said.
Pery said new invoice processing solutions are able to automate hybrid AP environments where invoices are received as PDF attachments, by fax, by e-mail and by paper. “Paper is not going away, and most organizations don’t have the capacity, resources or leverage to implement full-on electronic data interchange (EDI). So there need to be integrated solutions that capture both paper and electronic invoices, in a single stream, with the same underlying best practices,” noted Pery.
Moving forward, Schrage believes automated invoice processing will increasingly become a viable part of business processes rather than a front-end feeder. This will drive efficiency throughout the organization, not just with automated data entry, but with a complete birth-to-death solution spanning the life of an invoice. “Interest in incorporating front-end document capture, classification, and data capture with business process management will grow in the year to come,” Schrage said. “Integration capabilities with both front-end imaging hardware, such as leveraging metadata from scanner communications, and back-end ERP and document management software, are improving, he noted.
Pery also sees a convergence of invoice processing technologies. “Customers want an end-to-end invoice solution. Companies are not inclined to acquire a capture technology from one vendor, workflow from another vendor, and somehow undertake the integration of the technologies.” This seamless integration can provide organizations with common underlying administration tools, consistent deployment, and a common user experience end-to-end, from the time the invoice arrives.
By automating accounts payable processes from start-to-finish, Viancourt said companies can achieve significant savings due to early payment discounts, reduced overall transaction costs, no more duplicate payments and better management of compliance mandates. “It also means that already spread-thin staffs can focus more on work that really adds value to the organization,” he said.
Building on demand for end-to-end solutions, Pery predicts invoice automation will move from the back-office to the fringes of the enterprise and the front office. “There is a push to truncate paper as early as possible, where the invoice is received,” he said. “Companies want to use multi-function devices and desktop technologies to scan invoices, extract line-item information, truncate documents, and feed the data as quickly as possible into the downstream workflow.” As invoice automation moves toward the fringes of the enterprise, Pery predicts mobile capture of invoices will grow.
Schrage added that more companies are investigating a shared services or centralized processing model for AP processing. “The centralized processing model is facilitated by the ability to implement distributed capture, allowing invoices to be scanned at a remote location (or many locations), and transmitted via the Internet to a central processing operation. This approach reduces paper handling, postage costs, and delays. The combination of data capture, workflow and BPM offers users a powerful new business solution that was not previously available, Schrage said.
Another trend to watch is the emergence of Web-based solutions that allow for the outsourcing of processes for correcting POs and invoices. “Let’s assume you receive aPO and the number is missing,” Pery said. “An automated solution can initiate a trigger that would send a notification back to the supplier asking them to supply the information. The solution would provide a browser-based portal for correcting and re-sending the PO . This removes the burden on the AP department of dealing with day-to-day inquiries, freeing them to focus on more complex exceptions handling.”
The bottom line
“Invoice automation is increasingly becoming a mission-critical, time sensitive, document driven business for corporate buyers,” said Pery, adding that he anticipates strong growth ahead for automated invoice processing solutions. Optical Image Technology’s Thumma agrees.
“Industry statistics show that approximately three-quarters of businesses have not yet automated their invoice processing, so there is still a lot of potential for growth,” he said. “As an increasing number of businesses add digital record keeping into the business models, it’s natural to anticipate that invoice processing automation will continue to increase steadily, as it has over the past decade.”
How can a company determine whether it is a candidate for an invoice processing solution? Bob Fresneda, president of ReadSoft North America said any of these conditions may make a company a prime candidate for this type of solution:
• It has very manual processes.
• It has very little or no control over its processes with poor visibility into those processes.
• It has low visibility into its outstanding liabilities.
“Basically, if a company is spending too much money to process an invoice compared to industry benchmarks, they would be a good candidate for AP automation technology,” said Fresneda.
• Bob Fresneda, president of ReadSoft North America, said his company has seen no let-up in the number of attendees to its webinars, the prospect calls it receives, or its Web traffic.
• Diversified Information Technologies CEO Scott Byers said his service bureau is seeing more demand for outsourced invoice scanning. “Companies are going paperless as a way to reduce cycle time and cost,” he said, adding that Diversified Information Technologies now provides digital invoice conversion services to roughly 10 percent of its more than 500 customers.
• Jim Bunn, national business development management, for IBML, sees increasing demand for automated invoice processing technology as part of corporate shared services initiatives.
• Paul E. Diegelman, vice president of finance and accounting optimization for BancTec, said, “Although capital remains constrained to many corporate buyers, and many companies are still in cash-conservation mode, the recent broader economic improvements have allowed both ‘lookers’ and ‘buyers’ to get back into the market for AP automation solutions.”
With new technology pushing invoice automation beyond the back office to the front lines of the enterprise, some say invoice automation could experience even faster growth in the future.
The recession as a ‘catalyst’
So why has invoice automation grown so fast at a time when other technologies are limping along?
“Economic conditions in the
“Prior to the economic downturn, automating invoice processing was not necessarily top of mind for most CFOs because they were focused on tasks such as compliance,” noted Andrew Pery, chief marketing officer at Kofax. “But when they looked at invoice processing, they discovered that they could achieve short-term gains by taking paper out of the process, and improve compliance in the bargain.” He noted that electronically stored invoices provide more accessibility and better visibility.
Diegelman said cost considerations are driving interest for invoice solutions from “the healthcare, consumer services and manufacturing verticals, with meaningful interest from a number of others.”
“Industries that are subject to substantial regulation and frequent audits are leading the charge for adoption,” said Jim Thumma, vice president of sales and marketing for Optical Image Technology, Inc., pointing to financial services, insurance, and healthcare. “However, as businesses in other industries start searching more earnestly for cost reductions that don’t compromise services to their customers, it’s likely that invoice processing automation will be adopted there as well.”
But there’s another reason the economic downturn has spurred invoice processing automation.
“Everyone is familiar with the ‘lower cost, increase efficiency, do more with less’ pitch, but with the state of the economy in the last 12 months, we’ve seen improved cash management as a key driver,” commented Fresneda. “Being able to accrue all expenses and know when invoices are due allows executives to manage their cash better. It also provides better visibility into outstanding liabilities.”
Bud Viancourt, director of commercial sales for Hyland Software, noted that, “one of the best, and certainly most proven, ways to maximize cash is to better control financial operations.”
“By eliminating manual data entry, accurate data is available much faster, giving companies the ability to approve invoices more quickly and make business decisions more effectively,” said Shrage.
The role of technology
Today’s leading invoice processing solutions rely on a combination of optical character recognition (OCR) engines to maximize data capture; are easier to customize according to existing business processes; and are less dependent on data capture templates, which typically provide mixed results.
A key trend in invoice processing solutions is that corporate buyers expect implementations to be far quicker and more efficient than they have been in the past. “Six months and hundreds of thousands of dollars for setup and implementation are out of the question. A compressed ‘time to value’ is required,” Diegelman said. With improved technology that allows business-user configuration, rather than costly and time-consuming IT-driven customizations, 45-day implementations that generate the expected business case are now achievable – and corporate buyers expect it, he said.
One of the advancements in invoice processing technology is the concept of cascading matching. Cascading matching is similar to traditional PO-based invoice matching, Diegelman explained, but it allows for an expanded range of data elements from an expanded range of source documents (such as contracts and approved purchase lists) to be matched during the invoice approval process. The benefit for the corporate buyer is an automated process that results in far fewer “exceptions invoices” that require manual intervention in order to complete the invoice approval process, Diegelman said.
Although it’s not exactly new, Thumma noted that more companies also are e-mailing invoices in the form of PDFs that can be stored, securely accessed, and managed within a content management system and easily pulled at the right time into the electronic invoicing process. “This helps them to deal with accountability, compliance, and audit issues, and provides efficiency gains,” he said.
Pery said new invoice processing solutions are able to automate hybrid AP environments where invoices are received as PDF attachments, by fax, by e-mail and by paper. “Paper is not going away, and most organizations don’t have the capacity, resources or leverage to implement full-on electronic data interchange (EDI). So there need to be integrated solutions that capture both paper and electronic invoices, in a single stream, with the same underlying best practices,” noted Pery.
Moving forward, Schrage believes automated invoice processing will increasingly become a viable part of business processes rather than a front-end feeder. This will drive efficiency throughout the organization, not just with automated data entry, but with a complete birth-to-death solution spanning the life of an invoice. “Interest in incorporating front-end document capture, classification, and data capture with business process management will grow in the year to come,” Schrage said. “Integration capabilities with both front-end imaging hardware, such as leveraging metadata from scanner communications, and back-end ERP and document management software, are improving, he noted.
Pery also sees a convergence of invoice processing technologies. “Customers want an end-to-end invoice solution. Companies are not inclined to acquire a capture technology from one vendor, workflow from another vendor, and somehow undertake the integration of the technologies.” This seamless integration can provide organizations with common underlying administration tools, consistent deployment, and a common user experience end-to-end, from the time the invoice arrives.
By automating accounts payable processes from start-to-finish, Viancourt said companies can achieve significant savings due to early payment discounts, reduced overall transaction costs, no more duplicate payments and better management of compliance mandates. “It also means that already spread-thin staffs can focus more on work that really adds value to the organization,” he said.
Building on demand for end-to-end solutions, Pery predicts invoice automation will move from the back-office to the fringes of the enterprise and the front office. “There is a push to truncate paper as early as possible, where the invoice is received,” he said. “Companies want to use multi-function devices and desktop technologies to scan invoices, extract line-item information, truncate documents, and feed the data as quickly as possible into the downstream workflow.” As invoice automation moves toward the fringes of the enterprise, Pery predicts mobile capture of invoices will grow.
Schrage added that more companies are investigating a shared services or centralized processing model for AP processing. “The centralized processing model is facilitated by the ability to implement distributed capture, allowing invoices to be scanned at a remote location (or many locations), and transmitted via the Internet to a central processing operation. This approach reduces paper handling, postage costs, and delays. The combination of data capture, workflow and BPM offers users a powerful new business solution that was not previously available, Schrage said.
Another trend to watch is the emergence of Web-based solutions that allow for the outsourcing of processes for correcting POs and invoices. “Let’s assume you receive a
The bottom line
“Invoice automation is increasingly becoming a mission-critical, time sensitive, document driven business for corporate buyers,” said Pery, adding that he anticipates strong growth ahead for automated invoice processing solutions. Optical Image Technology’s Thumma agrees.
“Industry statistics show that approximately three-quarters of businesses have not yet automated their invoice processing, so there is still a lot of potential for growth,” he said. “As an increasing number of businesses add digital record keeping into the business models, it’s natural to anticipate that invoice processing automation will continue to increase steadily, as it has over the past decade.”
How can a company determine whether it is a candidate for an invoice processing solution? Bob Fresneda, president of ReadSoft North America said any of these conditions may make a company a prime candidate for this type of solution:
• It has very manual processes.
• It has very little or no control over its processes with poor visibility into those processes.
• It has low visibility into its outstanding liabilities.
“Basically, if a company is spending too much money to process an invoice compared to industry benchmarks, they would be a good candidate for AP automation technology,” said Fresneda.
1 comment:
Excellent article! Thanks for taking the time to put this information together.
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