Top 6 AP Steps You Can Eliminate, Plus 7 Steps to Push You Forward

There’s always a smarter, easier and faster way to process accounting documents and invoices. Unfortunately, accounting departments have long held a stigma of having people stuck doing manual data entry, crunching numbers and month end reports. If you have heard that perception before, get ready to fight back, push forward and turn your accounts payable (AP) department upside down with a new, fresh outlook on accounting processes. 

Digital Transformation 

Perhaps you’ve heard this business buzz word being thrown around? Well, it’s got high ranking SEO for a reason. Digital transformation is the process of moving paper or documents with unstructured, unsearchable and inaccessible content into a digital format that workers can use and easily access. Accounting and invoice processing are top use cases for digital transformation because invoices and purchases orders have traditionally been either in paper or in an unsearchable PDF file and, therefore, are prime candidates. 

Dare yourself to dream for a moment: what would you do with your free time if you didn’t need to rekey invoice data into your accounting or ERP system? 

When you decide to digitally transform your AP department, there are 6 tasks you won’t have to do anymore: 

  1. Manual keying and data entry. There’s a better, automated way using Smart Capture® technology, which uses supervised machine learning to recognize any field, even if the fields are in different places on the page, and from different vendors. The OCR process can be done on-premises, using a hybrid cloud microservice, or solely in the cloud. Invoices are often still paper documents or are sent in PDF format, which is impossible to search for in your computer – leaving human eyes as the alternative search method. 
  2. Once you have automatically captured the data, there are solutions that can organize, index or classify the invoices. If you have selected a Smart Capture tool that utilizes supervised machine learning, the system can recognize the type of document it is (i.e., an invoice, purchase order or application) and even tag it by vendor or accounting code. Manual classification can be a time-consuming part of an AP role. 
  3. With auto-capture and classification, you won’t have to file away hard copy documents, which often sit for years untouched, taking up significant office real estate.
  4. Now that your data is recognized and organized correctly, the metadata can automatically be extracted from each invoice or document. The extraction stage is where all the data you need is pulled off each page and put into a structured and searchable format, so it can be easily accessed and used. Without automation, this would be yet another stage where manual data entry would be required. Depending on your organization’s tech stack, invoice processing often-times must be entered several times into several different systems, so automation will ensure this is no longer an issue. 
  5. You will not miss the mundane work of exporting and importing the data into your ERP, CRM, RPA or other line of business systems. 
  6. Most finance departments must endure yearly audits, with the accounting team spending hours and days pulling data and reports. This will no longer be a source of angst, as a Smart Capture system has metadata readily available for rapid reporting. Customers who use Smart Capture tools report that audits were reduced from several weeks to several hours. 

Let the Good Times Roll (Automatically)

The ramifications of digital transformation can have a highly appreciated and positive impact on your AP team. Customers who use smart invoice capture tools have reported a 400% increase in productivity. The tedious part of the accounting process is stripped away with intelligent software, making space for higher level, higher value work from employees. Not only does this boost morale, but it leads to higher employee retention, the ability to process more invoices faster and scale your processes with company growth. 

Additionally, AP departments reap numerous benefits with faster payment cycles. They can capitalize on early payment discounts, dynamic discounting and, in some cases, can even transform the AP department into a profit center. Honda Logistics, who uses Smart Capture for their invoicing process, is an example of how they were able to not only process 20,000 more invoices each year, but they implemented a Single-Use Account (SUA) payment program to turn AP into a profit center. 

7 Steps to Kickstart Digital Transformation

If you’re interested in learning how to start the digital transformation process for invoice processing from the beginning, here are 7 quick guidelines to tackle so you can escape those manual process listed above! 

  1. Create a “Tiger Team” to implement a digital transformation initiative, starting in your AP department with invoices. This includes having an executive sponsor, who will guide and promote the project. A finance department is one of the easiest departments to automate due to the high volume of invoices and other financial forms that often are still processed manually. Your Tiger Team will help you tackle and navigate the project forward. 
  2. Build a business case. The team will need to create goals and predict business outcomes and value in order to secure budget. Find out how the volume of invoices per week, month or year as well as note if there are any peak processing times. You’ll want to know how many accounting staff you have, how long it takes to process a typical invoice and how many exceptions are typically made. All these metrics will help guide you to your goals and provide before and after proof of success. 
  3. Research vendors. One of the most important vendor selection criteria is to decide on what type of operating platform you’ll need – cloud, hybrid cloud or on-premises? Will it be on a public hosted server or private cloud? These types of decisions can affect service level agreements (SLAs) with vendors, including details about data recovery, disaster recovery and downtime, which can produce financial penalties for failure to meet the SLA mandates.
  4. Once a smart content capture tool and vendor have been selected, the implementation process will begin. You’ll need to identify the fields you want to capture, such as Company Name, Invoice Number, Invoice Date, Tax, Shipping, Sub-Total, Total Amount and possibly other fields. Selecting these fields will simplify your accounting processes once you have a smart capture platform in place. The Tiger Team will work closely with the vendor on various activities to make the implementation a success.
  5. Change management. Before go-live, it’s important to rally the troops, especially the accounting team, to gain company-wide buy-in to ensure acceptance and excitement. Your executive sponsor should help spearhead positive change management.
  6. Training. Most importantly, your vendor of choice should guide you in training employees to use your smart capture platform. It should be easy and intuitive. 
  7. Finally, it’s go-live time and you’re ready! Have a plan to track metrics and your success. 

Digital transformation is the gateway and the solution to being able to unlock trapped data. Capturing and digitizing invoices are the first – and clutch – steps in the accounting process, freeing employees up to do more meaningful work. The benefits outweigh any of hesitation with proven results, accuracy, productivity, efficiency and cost savings. Ready to learn more? Contact us at info@ephesoft.com.