One of the issues I consistently see in the field is the lack of good organization surrounding the AP Process. Specifically, many companies are taking steps to improve their process by adding scanning of documents, single step data entry, invoice header extraction, and line item extraction using technology such as Kofax Transformation Modules, Oracle Forms Recognition (OFR) and ReadSoft Invoices. These platforms can greatly improve the speed and efficiency which invoices are processed, but they are not a cureall for a bad process. They are a cog in the process and to truly get the full benefit of AP Invoice processing the entire process must be reviewed, documented, and analyzed so logical phases can be applied to improve the process. Unfortunately, many customers expect “straight through” processing just weeks after implementing an AP Capture solution – without consideration for the processing that happens prior to scanning the invoice, or consideration for what happens after the data is extracted. Unlike the RonCo “Set it and forget it Rotisserie”, the entire process must be scrutinized.
The first step in the process is to review the current paper process. Automating an existing process that is not good will simply result in a faster bad process. This is a great time to consider starting over and moving away from the “we have always done it this way” mentality. Below are some key steps to consider when reviewing your current AP Processing System.
Document Preparation – Moving this function to a mail room will free up AP staff to do other things. Mail room staff can easily be trained on how to determine regular mail from invoices. A separate PO Box or routing can also be added to the address to help this process. Have them open the invoices and separate them into single and multi-page invoices. Multi-page including two or more should be separated by a separator sheet that the scanning automation platform supports. For example, Kofax separator sheet, blank page, bar code separation, etc. During the process, all documents should have the staples removed, sticky notes detached, and all documents should be aligned correctly at the top and sides of the papers. Keeping staples away from the scanning area or other machinery is a simple way to prevent damage to the scanner and avoid costly down time issues. Invoices should be batched into groups of 50 to 100 pages. This is to allow the next step in the process to include batches that are manageable. For example, a 1000 page batch, in some systems, cannot move onto the next step unless all pages have been indexed. In the past, many process required documents to be counted so they could be matched to the system to ensure the correct number of pages have been scanned. In most cases, this is no longer needed as the double-feed detection on new scanners, especially the Fujitsu scanners that we recommend, work perfectly.
Scanning – In some cases, we see the mail room doing the scanning once documents have been prepped. I would estimate about 20% of our customers are doing this. The remainder still has the Accounts Payable department scan batches. After the scanning process, the batches can be boxed with a date, and retained by day or week for redundancy and compliance if needed. If you must keep the paper for 7 years, clearly label the full box with the date range and the year the documents were scanned. Lastly, develop an organized method of storing these boxes in a warehouse until destruction is required. Keep in mind how documents may need to be accessed if required for auditing. In most cases, the last year should be easily available. Other boxes should also be stored in such a way that allows for them to be destroyed without upsetting the prior boxes in the chain. First in First Out (FIFO) is great, but just be careful that the documents to be destroyed are not 3 pallets deep on the bottom of a stack. The process of storing these documents off-site by companies such as Iron Mountain is a good idea if it works for your solution. They handle the destruction based on rules you setup. All you need to do is fill the boxes with scanned invoices and they will pick them up on a weekly basis.
The above tips can be implemented even if you don’t use a mailroom for scanning or have a company to handle document warehousing. The key to a good up front process is organizing the tasks, and keeping workers who sort and prep the documents functioning efficiently while using the least amount of steps in the process.
By Paul Pitts
VP of Professional Services
All Star Software Systems, LLC