In our role providing financial systems implementation support and consultancy to businesses of all sizes, we continue to be surprised that so many finance departments still remain awash with paper. With this in mind, here are our five top tips for companies looking to achieve a greater level of finance automation:
1. Improve management of incoming documents
Many companies have improved efficiency in some areas of the business through the adoption of electronic document management systems (EDMS). Extending the use of scanning technology and EDMS to finance departments will improve handling of inbound finance related documents such as purchase invoices, credit notes and related letters, faxes, emails and contracts.
The simple process of scanning documents as they arrive in the post room, tagging them with relevant keywords (such as purchase invoice, supplier name, invoice number or invoice date) improves efficiency with faster access to information and delivers secure storage to protect against the possibility of damage, loss or theft of the original paper document.
2. Minimise manual data entry
Too many companies are still manually keying financial data contained in paper invoices directly into the finance system. Manual data entry is not only expensive and slow; it significantly adds to the risk of posting errors which can then complicate the reconciliation process.
EDMS with optical character recognition (OCR) capabilities can rapidly transform efficiency and minimise manual input. Specifically designed to capture all relevant information and financial data directly from a scanned purchase invoice, scanning and OCR can identify data discrepancies within an invoice, such as incorrect VAT; automatically check against the finance system that the purchase invoice is from a valid supplier; and generate a file containing the relevant purchase invoice accounting entries ready for manual or automatic upload into the finance system.
3. Automate purchase invoice approval process
Current processes for managing the purchase invoice approval cycle in many organisations are inherently inefficient and often turn into a time consuming manual paper chase. In contrast, by utilising integrated workflow and authorisation capabilities in conjunction with an EDMS/OCR system, finance departments have a secure, end-to-end solution that minimises manual intervention and provides complete visibility of the status of any invoice, whilst at the same time speeding up the search and retrieval process.
4. Outlaw the use of outbound paper
The handling of paper within an organisation is not just limited to inbound documents - it is just as prevalent with outbound documents that require pre-printed letterheads, continuation sheets and in some cases, statement, remittance and cheque stationery. Boxes of pre-printed stationery can often be found taking up valuable space in store rooms and cupboards. The costs and staff time associated with printing, handling and posting paper-based documents to customers and suppliers is both significant and unnecessary.
Electronic document and file distribution software is able to take files created by the existing accounting/ERP solution, reformat as an electronic document with required corporate branding, and distribute directly to recipients via integrated email/fax, with no manual intervention.
5. Automate the payment process
The final step in the accounts payable process is settling the invoice. Far too many companies are still using manual payment processes, either via cheque or bank. The implementation of electronic bank payment software that can take files created by the finance system and upload into the organisation’s online banking system(s), can cut down on manual intervention, minimise the risk of making erroneous payments and provide additional levels of security in the payment process.
EDMS, OCR, workflow and electronic payment processing technology is already being utilised in areas such as HR, distribution, marketing and customer service. By extending this tried and tested technology to the finance department and following the steps outlined above, companies can further transform efficiency; reduce costs; improve financial control; and get much better visibility into business performance.
This blog is an extract taken from the Eclipse eBook, ‘Top Tips to improve efficiency in the finance department’. Receive a free copy of the eBook:
Alternatively, for further information about accounts payable automation, please call +44 (0)203 866 8800.