Document Classification: Empower the A/P Department to set the Organisational Standard
Imagine an accounts office where paper invoices are piled high with just a couple of staff members assigned to process them. The employees are bogged down with documents, manually keying them into the system, with only a fraction of staff free to focus on activities that contribute to improving the performance and growth of the business. What makes things worse is that that no accounts payable (A/P) office is not without disruption, with employees poking their head around the door with rush-check requests asking for the status on particular documents. With so much work to think about and get through, it’s no surprise that workers in this area feel the strain.
The A/P department can be one of the most pressurised areas of any organisation. With invoices needing to be processed rapidly, the system can be costly, paper intensive and time consuming. In today’s turbulent economic climate, senior financial executives are working with IT managers to understand how IT can deliver cost savings and efficient processes. Many forward-thinking organisations have already turned to A/P workflow automation as a way to reduce costs.
However, uniting both paper and electronic information sources can go beyond the A/P department to better integrate data as it enters an organisation. Fully automating processes mean that the entire organisation can improve its overall speed, efficiency, control and quality of operations.
Document capture benefits companies that handle large volumes of information, particularly if this content is still manually processed to multiple locations. Even with a comprehensive manual system in place, the human factor will always produce errors. Without clear processes for storing and transferring information as it enters an organisation, data can be lost, sent to the wrong office or disposed of, rather than arriving at its proposed destination. Particularly in the A/P department, this can seriously affect the organisation’s productivity, resulting in lost revenues and corporate reputation.
By using an intelligent capture system documents are identified, classified by content and then data is extracted. This content can then be passed on-demand to teams across the organisation reducing the risk of information being lost or manually classified and sent to the wrong location.
The human factor is also evident in the quality of document classification, with manual processing more likely to create inconsistencies. Errors in an organisation can be costly in terms of productivity, corporate reputation and lost revenues. The challenge is to understand where and why errors occur and to address and eliminate them to improve quality and reduce costs. The solution for reducing these errors is to introduce an automated process to tackle information entering the business. That way the human element is minimised, improving the overall quality of work, meaning that corporate liability and costs are reduced. For the A/P department, automation of receipt and entry has taken out many of the error-ridden manual processes. This type of process replacement is an example of how quality can be improved, which can be transferred beyond the A/P department to other areas of the business.
One of the main influencers for implementing automated systems across an organisation is the costs associated with resources. As a business grows, employees are challenged with handling more information. Adding more processing strategy to manage this data is a waste of resources as more staff are tasked with transactional duties rather than driving the business forward. In the past this was particularly true where A/P invoices were concerned, with only a fraction of the staff free to apply themselves to non-transactional duties. Including more automation processes as information enters an organisation, particularly in the finance department, enables businesses to significantly reduce capture and entry costs with resources able to be used elsewhere on core business activities.
Furthermore, in an increasingly competitive global marketplace, finance departments are under relentless pressure to reduce operating costs and strengthen internal controls, while the business units they support are pressing for improved service levels and reduced cycle times. Finance professionals often find that they are operating worldwide with decentralised finance operations and are challenged to meet these seemingly opposing demands. This is especially true in companies with multiple operating units, large transaction volumes, manual, paper-based processes, and above average transaction costs.
As companies grow, shared services become a driving force behind more efficient finance operations. They provide a strong foundation for growth by enabling organisations to relocate technology and staffing to the geographic location of choice. The adoption of shared services can transform finance operations from a decentralised, divisional staffing model with disparate systems and processes into a highly efficient worldwide service centre characterised by reduced costs, improved service levels and increased control. Core financial operations such as A/P are centralised in one or more shared service centre (SSC) locations with a single set of streamlined processes and a single technology solution to serve a region or an entire corporation.
As a snapshot of how efficiencies can be improved within an organisation, the A/P department can set the standard of document classification and capture, with improved visibility of where information is within an organisation, reducing the risk of data becoming lost or unaccounted for. However, the benefits of data classification are transferable throughout the organisation, with automated systems improving the cohesion and productivity of a workforce along with the quality of work. In difficult times, organisations are increasingly looking for ways to implement cost-effective systems to improve efficiencies across the board. Automating transactional activities such as processing invoices, emails, faxes and hand written documents, can allow an organisation to streamline its workflow, freeing employees to concentrate on important business critical activities. The A/P department is a good place to start, but with the correct business foresight and strategy, automation can promote benefits to the rest of the organisation.