Johannesburg, 17 Sep 2012
There are often delays when processing invoices, meaning that there is a hold-up in paying these invoices, even when discounts for prompt payment are offered. In large companies, it is evident that the accounts payable process is a complex one; once an invoice is received, it is sent to the accounts payable department where a number of checks need to be performed before payment can be authorised.
"The accounts payable department needs to verify every invoice against purchase orders, among other checks, before authorising payment," explains NokusaEI's Leon Bouwer. "In large companies, vetting all of the invoices coming in can take weeks or even months, not only keeping suppliers waiting, but also meaning that the payer loses out on any discounts available for early payment."
Vendor invoice management (VIM) is a business process that automates the invoice verification process. The concept includes enabling suppliers to send their invoices electronically via e-mail, or to have them scanned into an electronic format as soon as they arrive. Using optical character recognition (OCR) technology by OpenText, the invoices are scanned and the relevant information, such as invoice number, purchase order number and amount, is automatically extracted from the documents. The OCR software uses a built-in knowledge base that understands how invoices are structured and where to find relevant information on them. The knowledge base was created using samples of thousands of invoices from all over the world. With the proven technology of the OCR option and its knowledge base, the data contained on most invoices can be extracted automatically. The knowledge base can be further extended using a learning component. The patented adaptive read technology allows for the software to be trained on specific invoice types by clicking on the data that needs to be captured. Once trained, the software will find the corresponding data on similar invoices in the future with much more accuracy.
Without human intervention, this information is then compared to the information already within the company's financial systems. "If there is a 100% match between the details on the invoice and the information stored regarding accounts payable, the invoice can be authorised for immediate payment without further delays," explains Bouwer. "The only impediments to payment would occur if the information on the invoice does not match the data in the company's financial system or when duplicate invoices are found. Only in these cases will human action be required to resolve the problem. However, in some cases, the VIM system can be customised to deal with these discrepancies automatically, or to alert the relevant employee and follow up on the problem to ensure it is dealt with in good time."
Bouwer states that there are many advantages to using a VIM system. One of these advantages is that it can easily be added to a company's existing business applications, such as SAP. A VIM system acts as an add-on module that interacts with the corporate system, while ensuring the security of the data therein. In addition, when using VIM, instead of having the current disorganisation that exists in many companies with regards to accounts payable, the relevant department will have a clearer, real-time view of the state of affairs as far as payments are concerned using the VIM Analytics dashboard. The invoice process can be monitored from start to finish so that nothing falls through the cracks. SAP Invoice Management enables you to monitor bottlenecks, cycle times, first-pass yield and liability accuracy. Through the use of analytics in the application, supplier (vendor) enquiries can also be researched from a single source to provide a rapid, accurate response to any queries. Moreover, the financial director or CFO will have a much more accurate understanding of the company's cash flow, as most, if not all, accounts payable will be dealt with immediately. Another important advantage is that, in cases where suppliers offer early payment discounts, the VIM system will be able to reduce the payments appropriately, saving the company yet more money and boosting the cash flow.
The primary benefits that NokusaEI's customers have reported from adding VIM to their SAP infrastructure have included that it enables fast and streamlined invoice processing, that there are no lost invoices, that no human error can occur, which would result in delays, underpaying or overpaying, that the companies now qualify for quick payment discounts, that cash flow bottlenecks are cleared, and that the number of staff required to handle invoices is decreased significantly.
According to Bouwer, NokusaEI has implemented the SAP VIM system by OpenText in a number of companies running SAP. All that is required is minimal architecture where the invoice processing is run and a secure storage area to ensure the data being processed does not end up in the wrong hands. "VIM software can be applied in any industry as it runs separately to the company's other business processes," adds Bouwer. "In the case of SAP, the VIM processes are already defined, as are various standard exception handling rules, all based on international best practices. It is always recommended that customers use the existing rules instead of trying to customise the VIM application to their own processes. While customisation is simple enough using ABAP for SAP systems, for example, it is advisable to adapt one's business to international best practices.
"Without a doubt, the VIM system provides the easiest and quickest return on investment (ROI) in the IT industry at the moment," says Bouwer. "It is an automated business process that is easy to implement and delivers immediate benefits without disrupting other processes in any way."
Share