Can BPA Help You Grow Your Business?28 Apr, 2016 By: Christina Robbins, Digitech Systems, Inc
Did you know that one of the most records-intense parts of the business also has a low adoption of digital automation? As such, it represents a fantastic business opportunity for you.
Many companies use the terms Business Process Management (BPM) or Business Process Automation (BPA) to describe the transition from analog, people and paper-driven processes to digitally managed workflows. And, there has been a ton of conversation about this topic, because organizations are recognizing significant returns when they invest in technologies to help with BPA. For example, the Gartner Group explains that 70% of today’s most profitable companies use real-time predictive analytics and extreme collaboration (components of BPA) to improve business processes.
What does BPA mean for Value-added Resellers (VARs), and should you be investigating this as a source of potential revenue? Yes! As technology continues to push the relentless pace of innovation, resellers are in the perfect spot to help businesses achieve BPA goals. In fact, Wintergreen Research explains that the market for these types of technologies will grow from $3.4 billion in 2014 to $10 billion by 2020!
That’s a pretty big pie, so what will it take for you to claim your piece? Well, don’t be intimidated by thinking you have to tackle all business processes or every type of automation technology. Start with one that is easy-to-understand and a ubiquitous problem for companies: accounts payable (AP). This particular part of the enterprise has been slow to adopt digital technologies, so you have the potential to really impact your customer’s bottom line by introducing digital records and workflow technologies that you may already have in your product line-up.
Why Accounts Payable (AP)?
Though other business functions are moving toward digital processes, accounting has been traditionally slow to convert. The Institute for Finance and Management (IOFM) specializes in accounts payable research and education. IOFM indicates that between 70 and 80% of invoices are paper-based and as much as 70% of invoice processing costs are related to document handling and manual data entry. This reliance on paper leads to slow processes, lower overall accuracy rates, and higher costs.
When organizations can move toward AP automation, however, they experience significant time and money savings. Businesses can reduce the average cost of processing each invoice from $11.76 to just $5.46 (a 53% cost reduction) simply by going digital. As a technology reseller, you can help companies realize these savings by moving them toward digital invoices and business process automation for accounts payable.
AP Automation in Five Easy Steps
In the past, many AP professionals were scared away from automation, because they believed all of their suppliers would also have to issue e-invoices in the same standard format in order to become fully digital. This is no longer required. Though invoices may arrive in many different page layouts, file formats, and even in paper form, Enterprise Content Management (ECM) can handle them all. Most ECM systems, in fact, will ingest almost any type of enterprise content and can then group similar items, like invoices, into categories that define processes and apply specialized security. Digital invoices ensure better control of information and are easier to retain in compliance with regulations.
Today’s scanning and imaging technologies have simplified AP automation. ECM and workflow applications then allow the electronic invoices to be sorted, processed, and paid much more quickly. In fact, with today’s technologies, AP Automation can be accomplished with an eye toward five simple steps:
To implement AP automation, paper invoices need to be scanned into a digital format. Once digital, they benefit from the same electronic security, retention, and routing as their electronic counterparts. Rather than scanning after invoices are processed (often called back file scanning), we recommend scanning upfront—upon receipt—so that natively digital and natively paper invoices follow the same process flow and security measures.
Critical capabilities: Scanning software that works with virtually any scanner at its full-rated speed, ability to clean-up scanned images using image filters like despeckle and deskew, QC that allows operators to quickly assess the quality of scanned images
Once scanned or ingested, digital invoices should be labeled with identifying information to make them easier to find using keyword search. Automation that eliminates manual effort is critical during this step, because paying employees to hand-key data is expensive! Look for applications that can sort invoices into categories and automatically extract business information such as invoice amount, date, and vendor details.
Critical capabilities: Automatic classification of similar documents into categories, automatic extraction of index information to minimize manual data entry, integration with leading accounting applications such as Microsoft Dynamics GP, SAP, and Oracle
Once received, invoices are typically compared to purchase orders and shipment delivery receipts to cross-check line items and totals. This process is known as a three-way match, and it is the first step in invoice processing. ECM applications allow AP clerks and accountants to view documents side-by-side to verify purchase order, invoice, and delivery information, satisfying three-way match requirements. Best of all, identifying index values make searching for related documents painless and quick.
Critical capabilities: View multiple documents side-by-side, integration with other line-of-business applications such as inventory management and accounting applications
Invoices that are received must get paid, and often suppliers have negotiated discount terms that offer companies incentives if they pay invoices early. Streamlining invoice processing times by routing invoices through approval processes electronically dramatically reduces the time spent processing each invoice enabling the company to take advantage of more early payment discounts. IOFM explains that a 2% early payment discount is the equivalent of a 36% reduction in annual interest rate—huge savings for the average business.
Electronic routing is simple. Each approver in the process can view not only the invoice, but also any supporting documentation, so they’re able to authorize the payment and move the invoice into remittance much more quickly. Even more important, automated processes can help to ensure internal controls are followed with every invoice from the moment it is received to the moment the payment is sent, ensuring compliance with regulations.
Critical capabilities: automatic routing of documents, ability to search for all related documents from one screen, ability to apply electronic signatures to documents as required
Once paid, the active life of most invoices is over, but financial records are subject to particular retention schedules that require businesses to keep copies for years. Electronic records are easier and more cost-effective to retain. Many ECM systems include the ability to setup retention schedules as financial records are received. These schedules can notify administrators when documents are due for destruction, and can prevent records from being destroyed without proper authorization.
Critical capabilities: Automatic retention terms applied to every document, management authorization prior to record deletion, ability to hold documents past retention deadlines as needed
Real Customer: Implements AP Automation and Boosts Productivity
Located in Ankeny, IA, Industrial Refrigeration Services (IRS) specializes in commercial and industrial refrigeration. Their AP department receives approximately 2,000 invoices monthly, and they recently implemented AP automation technology to streamline processing. IRS captures digital copies of invoices received on paper, and they upload invoices to a cloud-based ECM service for management and retention. After switching to automated processes, IRS saves more than 500 employee hours per year, and they believe 100% of invoices are now secure from loss, theft or damage. “We use ImageSilo® for just about anything you can imagine, including AP processing,” explained Pat Myers. “We’re on our way to being completely paperless.”
The Business Process Automation marketplace is a great expansion opportunity for many scanning and content management VARs, since our technologies naturally lend themselves to solving document-centric process challenges. Find your niche (perhaps you’ll choose AP), and get started growing your business today!
Christina Robbins is Marketing Manager for Digitech Systems. Digitech enables businesses to securely manage, retrieve and store corporate information using either PaperVision® Enterprise content management (ECM) software or cloud-based ECM service, ImageSilo®. Digitech improves efficiency, boosting information control & saving organizations money. They are the source for EfficiencyNOW! ControlNOW! MoneyNOW! ECMNOW! Buyer’s Lab has recognized both PaperVision® Capture and PaperVision Enterprise as the best products in the enterprise capture and ECM fields. To learn more, visit www.digitechsystems.com .