ECM for Accounts Payable: It Pays—Faster!
Why would I want to pay my bills faster? That's the question some people ask when we talk about the value of using ECM software, such as document imaging and workflow, to streamline accounts payable (AP) processes. Maybe the better question is: What is it costing me to continue business as usual? According to PayStream Advisors, a technology research and consulting firm, whether an organization is processing 100,000 invoices a year or two million, automated invoicing cuts costs by an estimated 59% over manual processing. Regardless of the size of an organization, manual invoice processing tracked with a spreadsheet makes it difficult to remain competitive while meeting costly internal or external compliance requirements.
On the other hand, the benefits of applying ECM technology to AP processes include:
- Shorter cycle times, increasing early-pay discounts and decreasing late-pay penalties;
- Better information sharing with authorized employees;
- Improved customer service;
- Significant labor reductions; and
- Visibility into liabilities and process history that support regulatory compliance and corporate accountability initiatives.
Process Improvements Pay Off
A good ECM solution for AP should mirror the most effective elements of your AP process while eliminating the most tedious. Automated workflow, for example, can be designed to reflect and optimize your current business rules for invoice approval, routing invoices to appropriate managers and kicking off related business tasks. The resulting process improvements can reduce cycle times and create measurable benefits. For example, automated workflow enabled one multi-billion-dollar communications company to save more than $13 million in less than one year by enabling its AP shared-services group to consistently take advantage of early payment discounts. Workflow can significantly improve accountability as well. The risk of lost documents in the black hole of inter-office mail is eliminated and an audit trail is created that can contribute to best practice and compliance initiatives.
Improving access to documents can also support more efficient interaction throughout distributed locations and allow companies to consider strategies for operational changes that reduce costs. For one company, this meant the ability to create a shared-services group that supports 50 business units. This allowed them to take advantage of economies of scale in an area where labor is less expensive and still apply specific rules for each business unit and involve thousands of users around the country in the approval process. These operational enhancements can be extended to business partners as well. As technology evolves, organizations are changing the ways they share information. An AP solution that handles only paper invoices may not account for electronic transactions, faxes and e-mails in the future. Fundamentally, an ECM solution should support continuous process improvement, both from the solution itself and the knowledge it provides. For example, one Florida county agency processing 10,000 invoices a month used workflow tools to gain unprecedented information about employee strengths. The visibility into the actual process showed that some clerks were better verifiers, while others excelled at data entry or decision-making associated with exceptions. Based on that information, administrators were able to assign work more appropriately with a few simple configuration changes.
Content + Data =Better Decision-making, Faster
Throughout AP processes, access to both content and data are necessary to make decisions and take appropriate action. Integrating ECM technologies with data-centric AP line-of-business (LOB) applications enables AP staff to access supporting documents through the interface of the business application where they perform most of their daily work. A sound ECM solution should be able to content-enable LOB applications in a manner that is totally transparent to users. As one end-user put it, "Our AP clerks didn't know it was a separate product. They thought it was an imaging enhancement to SAP." Be advised, however, content-enabling AP applications shouldn't be a long-term commitment to services or even the solution itself. Any solution that requires a significant amount of custom coding is going to be expensive to implement and to maintain. What happens if you upgrade or replace your core application? Don't buy an AP solution that puts you at the mercy of a vendor or imprisons you to a certain way of doing things.
Plan Strategically, Proceed Tactically
Experts agree that most organizations are moving toward standardization of enterprise platforms, and there is virtually no department that can't benefit from ECM technology. ECM for AP is a cost-justifiable way to establish a beachhead for an enterprise-wide content management strategy. Implementing point solutions within the strategic framework that an ECM suite provides reduces the complexity and cost of content management and can enhance communication and collaboration. For instance, if invoices are used for pass-through billing in industries such as construction, couldn't accounts receivable (AR) benefit from the solution? Would salespeople like to be able to view invoices from CRM or call-center applications? Just as your ECM investment should add value and contain costs throughout your AP operations, it should quickly and inexpensively roll out across other departments, processes and applications to deliver maximum value across your organization.
Hyland Software develops OnBase, a suite of enterprise content management software that combines integrated document management, workflow and records management capabilities in a single application. OnBase is used by businesses and government agencies to automate business processes, reduce the time and cost of performing important business functions, improve organizational efficiency and address the need for regulatory compliance through the management, control and sharing of digital content with employees, business partners, customers and other constituencies. Visit www.onbase.com for more information