SUBMITTED BY DataServ

We teamed up with our friends at the Institute of Finance & Management (IOFM) to produce an informative webinar about Single Stream P2PYou might know this process as "open e-invoicing" or "single stream invoicing" but it really encompasses so much more than just "invoices." Single Stream P2P can solve many of your AP automation problems and can do so in a rapid and easily deployable solution that doesn't have to change your current internal processes. If your AP team struggles with high costs, frequent errors, slow cycle times, or poor reporting and analytics—this webinar is for you.

Click the link below to view the webinar, or scroll down to read the transcript.

View "The Single Solution to Invoice Processing Headaches" Webinar Now


Webinar Transcript

[00:00:01] Shelley: Hello everyone and thanks so much for joining us for today’s webinar program. The Single Solution to Invoice Processing Headaches brought to you by the AP and P2P Network, and sponsored by DataServ. I’ve got just a few housekeeping notes before we get started. If you have any technical questions today, please use the chat box and I’ll respond right away. If you have any issues with your audio sound today please click on the phone icon which you’ll see above the chat window to receive the teleconference information. To ensure call quality for those who have called in, everyone’s lines have been muted. The handout link was sent to registered attendees this morning prior to the webinar, and as you’ll see in the chat box there on the right hand side of the screen, I’ve also entered the link there for you. If you’re disconnected, you can log on again using the instructions provided in your initial confirmation email. If you continue to experience difficulty, please email webinars@iofm.com. We encourage you to ask questions throughout the presentation. Please type your questions into the chat box and hit the send button to submit them. This program will be recorded and you will receive a thank-you email with the on-demand materials within just two business days.

>> [00:01:16] Shelley: Our speakers for today are Mark Brousseau and Jeff Haller. For more than two decades, Mark Brousseau has been a leading analyst and researcher in business process optimization. He is a trusted resource to end-users across vertical industries, as well as to top providers of solutions and services for human resources, financial services, and healthcare organizations. He frequently presents at industry events and is a popular participant on webinars, including those from IOFM.

>> [00:01:49] Shelley: Jeff’s experience spans the range of professional services, consulting, information technology and telecom. His strong vision for the future coupled with an eye towards helping to improve lives through business technology led him to build DataServ, the first Software as a Service provider of document and process automation in 1994. Today, DataServ provides shared service document processing solutions to clients on a global scale. At this time I’d like to welcome Mark and Jeff to kick things off.

>> [00:02:21] Mark: Hey, thank you so much Shelley, and thank you all for joining us today. So for many of you, invoice processing costs too much, takes too long, creates too many errors, provides too little visibility and it frustrates your suppliers! And guess what? The problem is getting worse! That’s right; many of you assumed that as paper invoice volumes declined, all of those problems would wash away. But that’s not the case! And it’s not going to be the case as we move forward, and that’s what we’re here to talk about today, but, before we do all of that, I wanted to give Jeff a chance to talk a little bit about our sponsor; DataServ. Jeff?

>> [00:03:07] Jeff: Mark thanks very much, and welcome everyone. Glad to be here to talk about something which we have been spending a lot of time talking about for the last twenty years, twenty couple plus years, and we really started out as a company focused on financial transactions as a whole, so we started out in AR and AP, and our business has really grown in the AP side over the last ten or twelve years because of problems like Mark’s describing. So, we’re looking forward to talking about that with you, and hearing from you about what you think, and what you see as those issues, and offering some insights that we’ve picked up over the years. So thanks Mark for the intro, and looking forward to speaking.

>> [00:03:43] Mark: Thanks so much Jeff. Let’s set the table with a poll question which is about to be displayed on your screen. We want to know; how would you describe the complexity of your invoice processing compared to two years ago; is it significantly more complex, slightly more complex, unchanged, slightly less complex, or significantly less complex? Take a moment to respond to the poll question now displayed on your screen, and we’re going to discuss the results in just a moment. So Jeff, when you’re talking to businesses and organizations across the world, what are telling you is going on with their invoice processing complexity?

>> [00:04:28] Jeff: That’s a great question. They talk about it a lot, as this is the first concern I think when we meet a new company or talk to an existing client, they’re concerned about a couple of things. One is; the more global purchasing reach of their purchasing organization, which is generating invoices from all different types of sources and locations, time zones and languages; these are concerns that we hear a lot. The other is with the fact that it’s just a diverse group now, as opposed to the old days. It was all paper, it was really easy, everything came in the same way, but now, because of initiatives to improve and automate there has been a splintering, if you will, of technologies as well as approaches and techniques being applied to AP that didn’t used to be there, so it seems like both of those things are top of the mind.

>> [00:05:20] Mark: Jeff we asked our attendees how they would describe the complexity of their invoice processing compared to two years ago. One third of the attendees on the line say their invoice processing is slightly more complex, eight percent of the folks say it is significantly more complex by public school education Jeff tells me that forty-one percent of the folks on the line say their invoice processing is more complex compared to two years ago. Now, thirty-three percent of you say it’s unchanged, we could read that either good news or bad news. It might have already been incredibly complex. Does any of this surprise you, Jeff?

>> [00:06:01] Jeff: No, not really. This is kind of what we’ve seen. I do think you’re right about the historical perspective, so if we go back even more than two years, I think this has been a dialog for about five years perhaps, so that could be another explanation. I think some people probably were already complex before the two years ago, but it’s definitely supportive of what we’ve seen.

>> [00:06:20] Mark: And this isn’t a phenomenon of just large companies or just small companies; this is across the board and across industries, isn’t that true Jeff?

>> [00:06:29] Jeff: Yeah, I think again thanks to the internet, purchasing departments now can go buy from whomever, and individual department managers can buy from whomever, and these are generating these different transaction types, and these different complex invoices that come in.

>> [00:06:45] Mark: Alright, don’t lean back in your desk chairs just yet, we have a second poll question which is about to be displayed on your screen. We want to know; which of the following are major contributors to the complexity of your invoice processing? Check all of them that apply. Too much paper, multiple invoice delivery channels, complex invoices (you know those suppliers), operating in a shared services environment, operating in a global economy (multiple currencies, multiple languages, multiple regulations for tax rules, multiple freight rules,) or poorly integrated systems? Check all that apply. We’re going to discuss the results in just a moment. You made an interesting point Jeff; you said that the reduction of paper has actually created some unintended consequences. Was it the case that organizations were doing a fairly good job, if you will, of processing paper, and now they’ve got a situation where they can’t normalize that across these different channels?

>> [00:07:53] Jeff: Yeah, I think it’s that, and it comes back to the fact that AP people in general are just very, very dependable, and so we tend to put up with a lot, we tend to process anything that comes in. I think especially over time, you know, we just adapt. And that’s a great trait, but I think the company that’s driven from the top down changes like: ‘hey, we’re going to do more purchasing through a network.’ Or, ‘we’re going to do more purchasing through a P-card,’ or whatever. So these changes just sort of happen to us as AP people, and when it does, it makes this complexity happen. But we don’t complain a lot, right? We just tend to take it on, and because of that, I think that’s where it’s grown now to be a pretty sophisticated beast and may maybe more difficult than it’s ever been.

>> [00:08:40] Mark: You’ve heard it here first folks; Jeff says AP folks don’t complain a lot! We asked you all: which of the following are major contributors to your increased invoice processing complexity? And Jeff, good news! We’re not crazy. Seventy-six percent of the folks on the line say multiple invoice delivery channels are contributing to their invoice processing complexity. Sixty-one percent of the folks on the line, yep, too much paper has not gone away. Forty percent of the folks on the line say complex invoices. Thirty-four percent; poorly integrated systems, and I think that goes hand-in-hand with those multiple invoice delivery channels. Twenty-four percent of you said global commerce, and twenty-two percent said operating in a shared services environment. The fact of the matter is, that the reality for most AP departments is that invoices are still coming in the same way they always did! They arrive at a mail room, directly to a purchaser, or maybe directly to the finance department, either as paper, or electronically. In most cases still, it’s as paper; about sixty-one percent of the time according to IOFM data. In that scenario, the paper is gotta be reviewed, which can take one to two days, and then routed to someone for approval and coding. That process takes anywhere from five to ten days, and God help us! If there’s some sort of an inception that kicks off the inevitable back and forth phone calls, emails, and faxes between internal stakeholders and suppliers. Once we’ve got an approved invoice in our hand, its then typically gotta be manually input into an ERP system, or downstream BMP or archive. In many cases, you all are filing those invoices, maybe even putting them in cardboard boxes and storing them at some far-off warehouse, maybe even a converted salt mine for goodness sakes. All of this takes a lot of time and money, and creates lots of opportunities for errors. And complicating things even further, is the evolution of invoices that arrive to remote offices or people in the field. This exacerbates the problem. Those invoices have to somehow get to this on-ramp for processing, which takes more time, and adds more costs. The result is headaches. High operational costs, low staff productivity, and Jeff hit the nail on the head; AP is being asked to provide more value to the organization. Your senior finance management wants your team spending more time on data analysis, and less time on transaction processing. Did you know that eighty-four percent of a typical AP person’s time is spent transaction processing? Only sixteen percent on data analysis; the problem with that is best in class companies are spending twenty percent more time doing data analysis than their peers. Additionally that process that I just described is creating lots and lots of errors. In fact, this year’s IOFM benchmarking data shows us that a significant number of our members are experiencing errors on more than three percent of all their invoices. Three percent! Typically, a good rule of thumb is that error rates over half of one percent tells you that either your supplier database needs a good weeding out, or you’ve got some broken processes. So there’s lots of errors! Additionally, we’re seeing tremendous challenges in visibility; getting those insights into where we stand with our cash. The financial crisis of several years ago told on corporate America. We were caught with our proverbial pants down; we didn’t know where we stood with cash, and that made the financial crisis even worse. CFO’s have learned the lesson well, and they’re asking accountants payable to provide more data to the organization to drive working capital, to improve spend management. All of this helps you make strategic decisions, lower your cost of goods, and be able to drive higher profit margins. Tons of supplier increase when you have that kludgy work flow that we described, it’s hard to know exactly where an invoice stands. More so, it’s impossible for your suppliers to know exactly where things stand, so what happens? You get calls and emails. Our data tells us that it costs and average of three dollars and sixty cents to resolve a single supplier inquiry. A whole lot more if that call comes into your senior management directly. So we’ve got to figure out a way to eliminate those calls and emails so we can eliminate some of that overhead. We talked about working capital management; when you have a work flow where it’s hard to get visibility, and hard to control your cycle times, you’re not able to optimize your cash flow. Inevitably, you have lots of late payment penalties; you can’t catch your early payment discounts, and forget about optimizing payment strategies. And finally, you have a whole lot of audit and security risks. This remains one of the top challenges seen by senior finance executives when it comes to accounts payable. In fact, it’s one of the tasks they would like to eliminate. How do we do that? Well, we’ve got to automate those invoice processes. If you want to see the canary in the coal mine, just look at your straight-through processing rates. The majority of IOFM members tell us that they have to manually handle ninety-five percent or more of all of the invoices that come into their operations. That’s right! They’re only able to process five percent or less of all of their invoices straight through without a human operator intervention, and this creates lots and lots of costs. There’s that error-prone keying of manual invoice data, lost or misplaced invoices, long approval and exception resolution cycles, compliance and security risks, high paper storage and retrieval, delays in posting as well as difficulty implementing best practices. If your organization is trying to become best in class, (and why in the world wouldn’t you?) you’ve got to eliminate those manual or semi-automated processes. This is what many of you focus on, for those of you who are involved in invoice processing; you know the costs inherent in those manual or semi-automated processes. More than one third of IOFM are spending more than six bucks to process a single invoice! And look at this; you can see that one in ten of our members actually pay cost more than fifteen bucks to process a single invoice. Let me tell you folks; this chart is a complete and utter lie! You know why? Because we know that more than one-third of IOFM members don’t track their invoice processing costs at all. And those aren’t the best in class members, folks. Those are the guys who are sitting on the really broken, really expensive processes. So my thinking is; is that this chart understates the cost of today’s invoice processing environment. And as you suggested in your results to the survey we just did before, accounts payable is becoming more complex. In fact, compared to two years ago, fifty-three percent of IOFM members tell us that their invoice processing is more complex. And there’s a number of reasons for this. Number one: is of course paper. Despite the strides we’ve made in rooting paper out of our AP processes it’s still extracts a tremendous cost. Second: is the number of invoice we’re receiving from multiple channels. The fact is, as Jeff was alluding to, AP folks were doing a good job, such as it was of handling those paper invoices. We’ve heard of pizza parties during peak volume periods. You were getting the work done. The challenge is, that as we diversify to other invoice delivery channels those processes don’t work as well. You can’t normalize your processing across all of these different channels. In fact, many of you haven’t even automated some of those other channels, so all you’ve done is move the cheese, and in some ways some of the controls and some of the mechanisms you had for automating such as it was the processing of those invoices no longer apply. A classing example is that two thirds of you who have data capture technology cannot extract data automatically from emailed invoices or faxed invoices. So what are you doing? You’re printing them out and you’re scanning them as paper. Holy smokes! Other reasons for increased AP complexity: remove approvers- this is a fact of life in today’s global economy. This is a challenge. How do we get paper invoices to the people who need to approve them? And finally: complex invoices. Just as we’re trying to optimize accounts payable processes, you’d better believe your suppliers are looking for ways to ring costs and inefficiencies out of their invoice presentment processes. And so, what’s happened? We’ve had this consolidation of invoices that is adding increased complexity. Some of you are demanding it, so that you can capture that line-item data. The law of unintended consequences, we’ve got to get at that data! As Jeff suggested, we’re seeing this movement away from paper. Here’s a study we did last year where we asked folks how invoices are arriving into their organization. You can see that in this study fifty percent of invoices were coming in as paper. Thirty-six percent were arriving as email. Email has made tremendous growth over the past several years. And over the next several years we expect that to continue. In fact, the folks who responded to this survey told us that two years from now they expect to receive more invoices via email than through paper. The issue is; is that many cases organizations don’t have technology for automatically capturing that data from those emails. So what’s going to happen? It’s going to create more kludgy processes in the organization. You might have noticed an increased growth is anticipated in electronic invoicing over the next two years. This is not a phenomenon just in the United States. In fact, we’re seeing increased adoption of electronic invoicing across the globe. And while we don’t benefit from the mandates that certain regions of the world have implemented, we are seeing a steady growth of electronic invoicing. Here again; this is going to create a challenge for those of you with manual and semi-automated processes. How do we normalize those processes? How do we ensure the streamline matching, validation, approval, and posting of those invoices regardless of how they arrive? So the bottom line is: the decline of paper invoices is driving increased volume for other channels. You’re seeing it in your organizations; email, fax, EDI, E-invoicing, even XML. And without automation businesses are forced to process those invoices via email and fax as paper. In some cases you’re even processing those electronic invoices as paper. Holy smokes! Managing multiple invoice submission channels in a manual or semi-automated environment is creating more headaches, not fewer headaches for you. It creates fragmented processes for validation, routing, approval, storage, retrieval, all those things you figured out a long time ago, how to handle in a paper-based environment. What’s more, there’s limited opportunities for standardization, limited opportunities to become best in class. Trying to track, report, and control those invoices is a great example; I hear it all the time from companies that have implemented email invoice approval processes; “well, yeah, we just email invoices around the organization,” okay,” how are you tracking those?” “Well, we can’t track them, we just send an email to follow up and ask if they’ve done anything with it.” Goodness gracious! That’s not solving the problem. And folks, if you don’t figure this out soon, you’re going to find yourself even more underwater because accounts payable processing is about to become even more complex. Nearly half of all IOFM members expect that their accounts payable processes will become more complex two years from now. So if you’re sitting on those broken processes I described earlier, you are in trouble! And that’s not the only reason you’re in trouble; the C-suite expects you to have more visibility into that information. We alluded to this earlier. Fifty-eight percent of our members are telling us that they have experienced increased demand for AP visibility over the past two years, nearly as many expect there to be an even more heightened demand for visibility two years from now. So here again; those manual semi-automated processes just aren’t going to cut it moving forward. So what’s the solution? How are we going to fix all of this? Pollard and Partners asked AP professionals that very question, and the number one answer was improve exceptions handling, followed by new or improved technology. And before one of you think that there’s a fly in the ointment with that exceptions handling, let me tell you, that that’s technology too! You can’t throw more people at exceptions so it’s going to take technology to get you to the next level of performance. And sure enough, organizations are trying to do just this! They’re trying to reduce the number of invoices that require rework, and they’re trying to improve the number of invoices that they can process straight through, without human operator intervention. And they’re trying to do this through automation. But we haven’t made a whole lot of progress; only twenty-three percent of IOFM members tell us that they have a high level of automation. This means they’re mostly automated processes, very few manual processes. A higher percentage; twenty-nine percent have low or no automation at all. This can’t stand! And so we’re seeing a push towards different types of technologies. Scanning, electronic invoicing, data capture, EDI, P-cards; these are all popular technologies. There’s one big problem here; is that many organizations are implementing these in a one-off kludgy fashion that isn’t addressing the big problem. And the big problem is, is that we’ve got to address that multiple delivery channels. What we really need isn’t a piecemealed approach to automation; we need a single-stream approach to automation. And that brings us to our next poll question, which is about to be displayed on your screen. We want to know: how would you describe the level of automation in your organizations invoice processing operations? Do you have a high level of automation with very few or no manual processes? Do you have a medium level of automation; some automation with still quite a few manual processes? Or, do you have a low level of automation; mostly or all manual processes? Take a moment to respond to the poll question now displayed on your screen, and we’re going to discuss the results in just a moment. So Jeff, someone looking at this chart will say. ‘oh yeah, I’ve done that, and that, and that, what’s the problem with doing this piecemeal approach from your standpoint, and how do you see that manifesting itself in the organizations you’re talking to?’

>> [00:27:40] Jeff: Yeah, you talked about it a little Mark, you touched on the idea that there’s also a counter pressure from the organization to reduce staff, right? In reality learning about and knowing all these technologies makes it necessary to have more staff, and more technical staff, rather than more AP staff. So, I think what we’ve seen is that dual pressures; like, ‘get it automated, but we’re not going to give you any IT resources to do it, right? We’re going to buy this technology, we’re going to implement this process that’s more automated, but we’re not going to really give you any more technical resources to support that.’ So, it falls to the AP team to learn to deal with those multiple technologies, or work around them, which sometimes happens. Even though they’re there, they’re not being fully utilized because they’re not fully understood or implemented. Or, they don’t work together at the same.

>> [00:28:29] Mark: Jeff, I hear all the time from someone who puts in electronic invoicing; they stand up a portal, maybe they’re part of a network, and they’re doing electronic invoicing, so you say; ‘what are you doing with the rest of your invoices?’ And their response is something along the lines of, ‘we’re going to wait it out.’ Now that’ll all go electronic someday. What’s the problem with that?

>> [00:28:50] Jeff: Well first of all, I’ve heard that now for about twenty years. It’s hilarious that you say that because we’ve heard that for twenty years.

>> [00:28:54] Mark: Jeff you’re making you and I sound old, stop bringing that up!

>> [00:28:58] Jeff: Sorry, sorry. For a long time-

>> [00:29:00] Mark: There you go.

>> [00:29:01] Jeff: -people have said we’ll wait for the paper to go away. But, the paper hasn’t gone away, as we just saw in this survey, right? And paper hasn’t gone completely away, even when it’s been mandated by Mexico and other countries; those then flow into U.S. where they don’t have a way to handle them, so we end up printing them out and processing this paper. So, I think the struggle really is that the time is ticking, the clock is ticking, and the pressure is growing, not shrinking, and so you can try that approach, or you can look around for something more integrated, and I think there are options now emerging that are more integrated than that idea of ‘pick one thing and wait for it to become a dominant player.’

>> [00:29:40] Mark: Jeff, we asked our attendees how they would describe the level of automation in their invoice processing operations. Only ten percent, 1-0 percent Jeff said they have a high level of automation. Forty-nine percent; nearly half, said they have a medium level of automation, and thirty-nine percent of the folks on the line today say they have a low level of automation. So Jeff, you’re going to be talking now to the ninety percent of the folks on the line of what they need to do to automate their invoice processing in this environment that we just described.

>> [00:30:18] Jeff: Yeah, so that’s perfect. I think it all starts with the idea of going upstream, so we talk about single-stream because that’s what people need to have once the invoices have arrived, but it begins with the concept of going upstream in the capture process. And this has been done in several ways, but the approach that we’re proposing here is that we would do up-front capture; meaning that the invoices would flow first through a separate step, rather than what happens today is, as we mentioned at the beginning of the webinar; today invoices can arrive anywhere, and now with global organizations that are very widespread, this can happen at anyone’s individual house if they’re a telecommuter or a remote worker. And so, you’re talking about invoices now that are being, you know, spread further afield that really need a stronger control on that up-front capture and so, the idea is really to push all of those through a single digital mail room, if you will, for an up-front capture. However, it’s got to be flexible enough to handle all those different types and formats and sources, and so that’s really the key to our definition of single-stream invoices and purchase to pay. I think the key is, thinking about this from a global standpoint as well, you’ve got to be a bit like C3PO, I know there’s a new Star Wars coming out here in December, we’re all very excited about it here, we’re a bunch of geeks. But, C3PO if you remember is fluent in over three million forms of communication and I think that’s what’s happening with invoices and the shrinking planet, where these are becoming pretty normal; to get invoices let’s say, from China or from India or from Thailand, you know, all of these different sources, and so you’ve got to be a bit like that adapter that you take on a trip with you when you’re plugging into different power sources, that’s really what this ‘digital mailroom,’ this up-front capture gains for you as a user. And, I guess we talked about it earlier, but this trend that we see for more and more electronic formats has been a good and a bad thing; on the one hand, it’s been good that people have attempted to eliminate some of this paper, but I think it’s also been painful as they have found there’s more trouble in processing the multiple different formats, we’ve talked to a number of larger companies over the years that the power in their industry, maybe they were the dominant player in their industry and they could go dictate to their vendors, ‘you must send us this,’ and what they ended up doing was building a bit of a Frankenstein’s monster. They went to a big partner, or vendor, and said, ‘hey, you’re going to send us EDI,’ and that vendor said, ‘NO.’ And they said, ‘well, then you’re going to send us email,’ and they said, ‘okay, but we’re going to send you emails with a spreadsheet attached, and that was different than the next vendor they spoke to, who said, ‘we’re going to send you EDI,’ and the next vendor said, ‘we’re going to send you PDF’s in an email,’ and others insisted on paper. So, it really was a good plan, but it was sort of one-sided. And I think that’s what the vendor networks were try to reduce, which is to say, ‘hey, we’re going to be the middle-man here,’ but in reality, they’re really just trying to force a closed loop kind of a system, which is really hard to imagine working these days, because you might get a new vendor every couple of weeks, or every couple of days, and you’ve got to get them into that system, and maybe they don’t want to change to that method, is that work the pain? So, when this happens, a lot of folks had a lot of IT resources assigned to making these things happen, and then the problem becomes supporting it over time, which gets really expensive. So that leads us to this dilemma of competing priorities, there’s the reality of everybody wants to lower the cost, they want to reduce the head count, not just in AP anymore but in IT as well. And, there’s also risks, right? So everybody wants a digital business; the CEO is saying it, the board is saying it; digital business is a great thing. It’s coming, but we’ve also got this limited budget that you have to work within, and I think we’re all watching the world from a consumer perspective become more electronic and more digital. But there are certain risks that have become much more apparent as well, right? I mean, who hasn’t heard about a data breach, or some sort of loss of documents theft, if you will, even from an outside party, or from another country. So we’ve got to be careful really what steps we take to make it more automated, or make it more digital, but we also have to do it, because it’s not going away, as Mark said. So this is a diagram that we use all the time to get a reaction, I’m hoping, on the other end of this phone, you’re all looking at this going, ‘yep, we’re familiar. We know what this is like.’ This is just what we’ve seen in the trenches, talking with folks like you for a long time. This bubble here, this thought bubble of the tribal knowledge is the most precious part to us, and I think that’s really what we try to enable into our solutions here at DataServ, is to try to make sure that we’re taking into consideration the fact that people know a lot of this today, but there’s a dilemma with that, right? There’s an awful lot of folks that are retiring from AP, and we knew this was coming, but they’re taking with them a lot of this tribal knowledge on ‘how do you deal with vendor X on a Monday in November?’ You know, there’s a lot of that stuff still out there. What these systems allow you to do is boil that knowledge down into a process that is flexible, but standardized. And that’s really what is shown here, in this representation of a single stream process. So again, focus on that upper left quadrant, that’s the up-front capture idea, which is to get these documents transformed from whatever format they start in, into one single work flow, stream, that can be processed by really anyone in your organization, or without, if you have outside partners, or consultants, or vendors that need to be in the loop. That needs to be handled through that same stream, no matter where they are, or how they work; if they’re remote, or if they are full on-site person, or in another country somewhere on a different time zone. So, I think some of the key criteria that we usually look for in the, and we recommend to everyone we speak to is this idea of a turnkey existing process or digital mailroom, something that’s not going to require a lot of communication with vendors in conveying standards and going back and forth on negotiating transformation agreements, or transaction agreements among all of your vendors, that would be very, very cumbersome these days. Also, to look for this fully integrated idea of being able to interface between whatever system, and whatever systems you already have, is also kind of critical these days. You can’t take the approach of, ‘hey, pick this one thing and let’s wait for everyone to become this one thing.’ It’s also important to understand these documents at a deeper level, and I think that’s one of the things that we see companies struggle with; there’s really nobody inside the organization that can say, ‘yes, I know how to process EDI, but I don’t know how process PDF’s or, I don’t know how to process emails,’ and that’s really become the problem; is sort of these different expertise in the past, and now they’re coming together and need to be treated as one within a AP, and that’s been a complexity that folks have struggled with. People talk about OCR a lot, it’s a love-hate relationship; some people hate it, and some people love it, and I think the folks who love it have had a good experience with it, and those who hate it have had a bad experience with it, so it makes sense. But, it is not gone away; it is not going away any time soon. It needs to be improved, and developed, and continue to be developed; this idea as a software as a service option for that has proven to be a good choice for good experience. So the people should look for that. We’re also seeing this desire, Mark mentioned it, this desire for a higher level of accuracy, and I think that if you go into a solution like this you should be looking for something that raises the accuracy, not lowers it, and I think that’s something that’s harder to find out there, but is available. You also have to look at it as a continuous feedback loop. I mentioned it, this transaction cycle is not static; it is very fluid. You all know this, right? New vendors show up, vendors go away, vendors change names a lot, these days they get acquired, they get sold; there’s a whole bunch of changes that have to happen, so those need to be incorporated into this process, making sure it’s staying current with your business. It also needs to handle exceptions, Mark talked about this, we talked about this in the beginning, it was in the surveys; you know, exceptions are the most expensive part, they’re the hardest part, they’re in my opinion also the most valuable part of the process to focus on, because within exception lies opportunities for improvement, and it’s something that you need to be able to focus on systematically, by reducing the time you spend on just regular data entry and transaction processing, that’s really the key. Over the years, and here I go with history again Mark, I’m sorry about this, over the years we’ve watched things like EDI, which was originally recommended to be the standard, and it was ISO standard developed and everything, but it never really got to a hundred percent. Even among companies who were notoriously good at arm twisting their vendors into compliance, we know a story about a big brewer here in St. Louis, Anheuser Busch that was at the time the largest brewer in the world, I think they might still be, and they pushed really hard and got to about eighty percent EDI back in the 80’s, and they quit. They stopped pushing because the pressure on the vendors outweighed the value of making that happen, and so they ended up really just having to do both things; EDI and paper. Same thing’s happened over and over again over the years, the automotive industry in the 90’s, for example, tried to close the network with all of their common suppliers, and it worked for a little while but it’s not around anymore because it was too inflexible. Later supplier networks have come along, Mark mentioned this already, and it is a standard, but it is a standard which is not always acceptable to every party in the process, and that’s why that becomes hard to get to full compliance, or a hundred percent of your invoices. So I think these are partial schemes that have been proposed over the years. What’s different going forward now, is you can look for solutions that contain the ability to be a hundred percent compliant; all invoices, all vendors, without the pain on your vendors and your team, the pain of change we’re talking about there. And it will address all of the documents now, as opposed to only a portion or a subset. We’ve also seen the exception workflow get better and better; there are ways to build tolerances in the system for example that you can look for and allow it to handle variances which we know always happen, right? But you’ve got to be able to handle those, and you can actually automate many of those today. And I’ve mentioned several times; there’s this IT component which has become more scarce inside of most organizations we know, especially focused around AP. So no more skiing up hill; I think you can take one step to digital without burning these bridges with vendors without the risk of a big failure of a big project because of the availability of software as a service, technologies that you can turn on and implement slowly over time, as opposed to jumping in to a big, big expensive risky traditional software project and finding the chance of failure very high. Some additional benefits we’ve seen downstream involves audits and retention management. So, Mark and I touched on it in the very beginning, but those are still valuable to think about as you look at automating from end to end; this P2P process, so I think Mark touched on it, the survey touched on it, you all reinforced it with your questions, right? What we’re really looking for is more visibility, getting all electronic data passed in electronically to your ERP, is very, very possible, very capable these days of doing that. We’ve had a client tell us years ago, ‘it never takes a sick day,’ we love that quote; that technology doesn’t take a sick day. I think we need to think about our people, people need PTO’s, they need sick days, they can’t continue to work overtime every single day of the year, especially on month-ends and year-ends. We’ve also made sure to think about global, because I do think today companies, providers, are looking at this globally as we know clients are. And I think you should expect to have a guarantee of success when you put something like this in, because again the technology is not new, and the process is not really new; it’s something that can be done and it’s using proven methods to do that. Mark, that’s all I had.

>> [00:43:35] Mark: So we have a bunch of questions for you Jeff, but before we get those, we have one more poll question that we’re just dying to ask. We want to know; which of the following do you believe is the biggest benefit of a single stream approach? What Jeff just described; invoice process. Is it reduced costs? Is it improve staff productivity? Is it fewer errors? Is it faster invoice cycle time? Is it enhanced visibility or is it stronger systems integration? Take a moment to respond to the poll question now displayed on your screen, and we’re going to discuss the results in just a moment. Jeff, I can’t wait on this question from an attendee they want to know; so, is Jeff really advocating that we let our suppliers submit invoices however they want?

>> [00:44:29] Jeff: Yes, that’s exactly what we are saying. I think they do anyway, right? I don’t know if that’s a very radical opinion, but, I have had that opinion for many, many years. To me, commerce is very messy, and it always has been and it always will be, right? And this is what we’re talking about here; is commerce. And so, why are we trying to force control where we can’t? Instead, let’s let the technology do what it does best, right? Which is; transform any of these varieties of things into a single thing that we can deal with? That’s the only part we can control really. Anyways, that’s just my opinion.

>> [00:45:03] Mark: And there’s another question from attendee that’s related, so we’ll ask that one as well. So, what types of technologies and tools are you using to automate the invoices that come in via all of these channels? So, how is Jeff that you’re normalizing the processing of these invoices?

>> [00:45:21] Jeff: God, that’s the key to the whole thing, exactly right. I told you these attendees are very bright, Mark. So they’re thinking the right way. It takes a combination of what we used to think of as document processing technologies, that’s what they’ve always been called, but there are so many of them but what has been missing in the past is the unification of those into a single tool, and I think that’s really why it’s been hard in the past to achieve the single stream vision. If you go back ten years, this required buying ten different products, so there’s an email server, there’s an email converting process, there’s a OCR process after that, right? There’s the need to extract PDF’s from emails, right? Because some vendors send emails with PDF’s attached, and others send their invoice in the email body, and so you’ve got to be able to handle all of those varieties, and there’s a dozen more, maybe thirty more actually.

>> [00:46:18] Mark: And we have another question that’s related to this as well, So, we have already implemented a self-service supplier portal, would this solution replace that portal, or would it sit alongside it?

>> [00:46:31] Jeff: Yeah, that’s a great question. We have seen both things out there, and I think it, from a change-management perspective it would make sense to begin with this sitting side-by-side, because you’ve already put effort and energy into that supplier network, or that portal. And I think it’s probably working probably for some portion of your documents or some portion of your vendors, so our approach has always been evolve, right? Don’t revolt. And so, no need to throw another monkey wrench of change into the vendor relationship, right? Let’s talk about who’s not going through that portal and why, and then look at how we can automate that. And I think SaaS solutions in general suffer the service, it’ll allow you to scale down to do that efficiently, cost-effectively, because you don’t have to buy one solution for everything.

>> [00:47:21] Mark: We asked our attendees Jeff; which of the following they believe is the single biggest benefit of the single-stream approach you described? One quarter of the folks on the line, Jeff, said faster cycle times. Nineteen percent said reduced costs. Sixteen percent said improved staff productivity, and another sixteen percent said fewer errors. Fifteen percent said enhanced visibility. And, six percent said stronger systems integration. I think that’s understated there, but one quarter say faster cycle times. Speak to that, that’s where they’re obviously drinking the Kool-Aid, Jeff. How will you accelerate cycle times with this single stream approach that you described?

>> [00:48:04] Jeff: Yes, it’s brilliant. I think it is true, by the way, I think all of these apply, and so you’re all right, not just saying that but in reality we find that different clients have different pain points, and the solution can help with any of those that were listed here. But I think it’s interesting that it’s very evenly spread. Faster cycle times I think is a goal, right? For a lot of you to be able to turn these things around quicker, to give more visibility and more analysis possible before payments are made, and I think that’s really true, because of this up-front digital mailroom idea. The concept is that you will have access to and visibility into the transactions themselves, the documents themselves, no matter what the format. At least thirty days earlier, sometimes we see clients forty-five days earlier than they used to have access, because as Mark mentioned, some of these float around in the organization, and we had a slide very early on about many of them go to a remote location first, and then have to be collected and sent in centrally before they can by analyzed or even before you’re aware of them. So, I think the key to it is again, that up-front step of getting everything captured as early as possible. Vendors are in no-[crosstalk]

>> [00:49:17] Mark: Jeff, we have a bunch of-[crosstalk]

>> [00:49:18] Jeff: slowness, you know?

>> [00:49:20] Mark: Yeah, we have a bunch of questions from attendees, so let’s get to the rest of them. An attendee writes; please explain further about how this new process will result in less invoice errors?

>> [00:49:33] Jeff: Good question. So, accuracy to me goes up with the amount of energy that you put into it, right? Just like in the old days of paper and everybody’s current process where the more accurate you are; is because you’re spending more time on it, or more people on it. In this case, we’ve been achieving that though through layers of technology, right? So there’s the capture process up-front, for example involves image enhancement software to make the OCR more effective, just as an example. Post-processing once the OCR has happened, right, there’s going to be matching routines that run against other data, right? So again, we’re checking automatically against more sources for more accuracy. And then there’s a human validation step as well that can be applied after that to say, ‘hey, if this is within a certain threshold of questionable, let’s put it in front of a person who can make the ultimate decision.’ So, I think it’s the layers of technology, the advancements in technology has allowed us to put more of these techniques and technologies together into a single solution, into a single product.

>> [00:50:38] Mark: Another attendee writes; how much system change is needed in our ERP system, and how does the interface work?

>> [00:50:47] Jeff: Okay, great question. So, what we’ve seen done, and what we do with our solutions; we provide a single feed on a regular basis to avoid some of those hardships around integrating, because we know that a lot of companies out there have multiple ERP’s, or again they have this limited IT resources to make those changes, so we try to leverage what’s already there. For example, we do a pre-three-way match process. But we do not force the clients to change their ERP. We run the document data that we’ve collected through their ERP, their existing three-way match process in that ERP, so there’s really no change that has to me made on the ERP side. But what happens is you get cleaner results. You get fewer exceptions. In fact, you should have zero, because the data being set in has already been cleaned up, so that’s one way.

>> [00:51:43] Mark: Another attendee writes; does this technology provide a work flow for approvals?

>> [00:51:51] Jeff: Yes, I think it’s inherently required because we’re talking about, again, all of the invoices, right? So some of these are not going to be very well-know, or very established vendor relationships, right? It might be a one-off service purchase at a remote location that needs to go through several levels of approval. The same work flow would be used for exception handling as well, that’s one of our best practices we always recommend is; don’t create multiple systems for multiple work flows. Have one work flow that handles all of those.

>> [00:52:23] Mark: Another attendee writes; many public agencies have very stringent audit and records management requirements. How does this create visibility for auditors, and integrate with our records management systems?

>> [00:52:38] Jeff: Okay great question. So, I think what everyone should look for is a system that integrates not only this work flow that we just talked about, and this up-front capture that we talked about earlier, but also the idea of retaining the documents for their life cycle. I feel like that should be incorporated these days, it’s not a hard thing to include in the solution. And it’s something that everybody needs. And then giving access to that archive as well as the system has an audit trail, that’s a very key thing to look for so that an auditor can come in from the outside, or an internal auditor can actually go in and do searches on ‘where was this document received? When was it received? By whom? How was it processed and touched along the way?’ So, a full audit trail, along with access to archive and retention management would be incorporated; that would be my suggestion.

>> [00:53:28] Mark: Another attendee writes; why should we believe your OCR solution would generate greater accuracy than a solution we would install in our own operations? Boy, there’s a little edge to that question, I think. Address that, Jeff.

>> [00:53:44] Jeff: It’s love-hate, its love-hate with OCR, I get it. So a lot of folks have invested a lot of money over the years, and it has been in many cases, disappointing. The results have not been there. Mark mentioned on example earlier, we’ve seen that stuff for years, you know two thirds of the folks who own OCR already have a hard time getting invoices that are not paper through that OCR process, so one reason is just the adaptability, right? The fact that it can handle all of these different formats and types already; that’s one reason people have switched to a fast-paced OCR like ours. The other thing has to do with the amount of time and energy you’re willing to put in to optimizing it. We know many, many companies who haven’t spent the time optimizing their OCR, and because of that their results are much lower. So if you have the resources, and you have the time and energy and IT expertise, this is something you can achieve, it’s just been hard in today’s environment to achieve those results in-house. That’s what we’ve seen over and over again.

>> [00:54:46] Mark: Another attendee writes; is the digital mailroom on our premises, or managed at a third-party?

>> [00:54:53]Jeff: Well we are not recommending one or the other, I think it depends on the organization, but I think that the idea of it being turnkey and simple, sometimes requires that you do go to an outside third-party to acquire this, but it is not required to do it that way. It’s just that it might be easier, faster, to ramp up, and so the answer is what works for you, but I think they key would be; how quickly can you create this from what you have today, and the people, and the resources you have available? Can you do it yourself? Sure. How fast?

>> [00:55:29] Mark: We have another question about OCR, you’ve opened Pandora’s Box here; so what percentage of accuracy and re-grates are you getting?

>> [00:55:41] Jeff: Okay, this is a great question; people always ask about accuracy with OCR and it’s a good question, but it’s a bit of the wrong question in this scenario because what people need to worry about is what they receive back from the OCR. If you can get back from the OCR ninety-nine percent clean data, let’s say its equal to what our keyers used to do, right? Our data-entry folks used to do, you’d be able to do on paper, then I think that’s what you should expect. I think the industry would say sixty percent, fifty, sixty, seventy, eighty percent would be your accuracy rates, but I think the overall solution that we talked about earlier where we’ve applied these other techniques and technologies, that’s driving this higher output of cleaner data, and so I think we need to change the question just a little bit; we should start asking what kind of data do I get back? How clean is my data coming back? Because the exceptions have been extracted, they’re being worked in work flow and cleaned up before they’re put back in, and a lot of that is being cleaned up before it gets to your ERP, and that’s really kind of the key to the whole thing; is how clean the data is coming in to your ERP.

>> [00:56:51] Mark: We have a couple of questions that are along the same vein, so I’m going to summer- I’m not going to give vendor names, but folks are basically wondering, if you can integrate with existing ECM solutions; Enterprise Content Management solutions? Talk about that Jeff.

>> [00:57:09] Jeff: Certainly. We come from a long background in that industry, hence the deep knowledge around documents, I think that that’s where that comes from so we have done a number of integrations there with things like share-point for example and file-net in the old days, so there’s been a lot of talk of those systems being sort of the enterprise repository, and there’s absolutely a possibility to integrate with that for, let’s say retention management or long-term archival, whatever it might be that you’re using it for, that has been done and can be done.

>> [00:57:46] Mark: We have another question from an attendee. They say; we have multiple owners that share costs. The owners split can vary from invoice to invoice. How does the correct percentage get entered when an invoice goes through the system? So how are we allocating costs?

>> [00:58:04] Jeff: Yeah, I knew allocations would have to come up today, that’s everybody’s biggest nightmare, right? [Laughter] It’s a very good question. It’s one of those rule things; we mentioned tribal knowledge earlier, right? This is often something that is in tribal knowledge within your AP team, and one of the strategies that we’ve always recommended is, that you extract that knowledge as best you can and incorporate it into a process, and so I think there’s going to be occasions where that’s never going to be automated, right? Because it’s way too complicated. But there’s going to be many of those scenarios where it happens over and over again, so one of the technologies that we’ve created over the years is an ability to go back to a past invoice from the same vendor, in the system there’s a very quick button to do that, they go back to this prior invoice and you can see how it was allocated there and then you can copy that. We’ve also pioneered a capability to paste in from spreadsheets because often allocations are done in spreadsheets, and we allow people to paste that into a coding process, a coding system within our solution that allows them to use what they’ve already done in a spreadsheet and make that more accurate, therefore less keying involved. So, just finding ways to save time and make it less necessary to know all the details every time.

>> [00:59:24] Mark: An attendee writes; ask Jeff to describe some of the safeguards to secure data in the cloud. Jeff?

>> [00:59:33] Jeff: Okay, this is good one too. Everybody’s worried about this these days. I think the biggest thing, really, is to know your provider, and to have a provider that’s stable and been around, and also to have knowledge of where those documents live. Many, many times nowadays you’re not sure, and neither is your vendor who’s in the cloud where are the documents exactly? And this has been a problem for ages on paper as well, if you went with an off-site, third-party storage vendor; they couldn’t necessarily tell you where all your documents were. You could retrieve them, but you didn’t know where they were stored. So I think knowing those couple of facts is very important. I also think keeping up with the latest techniques and strategies around security is also key, and so we get a lot of questions now in an up-front discussion with a client very early on; ‘how are you securing these? How are they being secured?’ One of those is a single sign-on for example, so we offer a single sign-on option so that clients are trusting another system really, they’re trusting their own security which they already keep up themselves, and so you don’t have all these passwords floating around and multiple people logging in, and that kind of thing. So, they log into their system, they click on a link and go out directly to the other system through their single sign-on.

>> [01:00:53] Mark: And Jeff, you have a number of very large brand names that are using your service in the cloud. I don’t want to turn this into an ad, but for somebody out there that thinks that this is risky, or that their company may never buy off on this, the fact is you have a lot of very prominent companies already doing this with you, right?

>> [01:01:12] Jeff: Yeah, it’s not something that’s happened overnight, it’s evolved as these companies have asked us to solve a problem, we’ve been able to help them solve a problem and really just seeing the need for that in a broader group of companies today. Our focus has always been on the middle market, and so to answer that question we’re also not just for the big companies out there, it’s not something that you have to be gigantic to need or want or get. There’s maybe a lower limit, where if you’re volume is pretty small, it’s hard to get to that but even that limit is lower than it used to be because even mid-sized companies have these problems, right? With the multiple streams and multiple formats and global business, so I think it’s becoming more possible for everybody, more available for everybody.

>> [01:01:57] Mark: And that will be our final word. Thank you so much for a great presentation Jeff. And thank you all for joining us with that. I’m going to hand it back to Shelley. Miss Shelley?

>> [01:02:06] Shelley: Thank you very much for a great presentation today Mark and Jeff. So that is all the time we have for today’s webinar program, but if you weren’t able to ask your question, or you think of any additional questions after this, please email them to webinars@iofm.com. If you could please fill out the short evaluation form that appear once you close out of the webinar today so that we can better serve your needs in future webinars. Thank you again to all of our participants in today’s webinar. This webinar was brought to you by the AP and P2P network, and sponsored by DataServ. Thank you everyone and-

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