Ademero Document Management Software - Streamlining Accounts Payable

8/8/2019 Ademero Document Management Software - Streamlining Accounts Payable

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A DEMERO DOCUMENT M ANAGEMENT SOFTWAREStreamlining the Accounts-Payable Process

INTRODUCTION

Business Benefits of Document Management SoftwareThe path to success in todays business environment has changeddramatically over the past decade. Before this century, businesses carriedout daily operations primarily using a communication infrastructure ofphone calls, fax transmissions, and courier services. Documents createdto facilitate business activity were faxed or copied for relevant parties andthen filed or stored in some physical location. Recipients manuallyprocessed the information, often creating new documents using portions

of the originals.

These days the Internet and its various methods of communication anddata transfer have provided businesses with a faster way to send andreceive information to and from suppliers and customers. The speed is sorapid that it has become a competitive advantage for companiesembracing it. In technology-driven industries, businesses that cannotmove information as fast as its competitors cannot survive. Simply put, the20th century method of creating, storing, and accessing documents nolonger matches the capabilities of todays high-speed networkinfrastructure.

The speed capability of information transfer

between two business entities, such as supplier

and retailer, drives the characteristics of the

supporting infrastructure,including how

information is created,stored, and retrieved.

While document management software has existed for several decades,its usefulness has only recently become apparent. It promotes not only thespeedy creation and distribution of documents but also the efficiency of in-house workflow processes. Current-day software includes functionality tocreate documents from e-forms, automate storage management withretention policies, retrieve documents using search engines, track accessand modifications, and facilitate approval processing.

Along with modernizing customer relationship management (CRM)software and any line-of-business applications, implementing document

management software should be a top priority for any organization thatseeks to lower costs and streamline document-centric business processeslike accounts payable.

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Content Central Browser-Based Document Management Software Content Central, developed and supported by Ademero, is an electronicdocument management system (EDMS) that operates under the server-client model. Administrators install the software package on one or morecomputer servers, and deploy it to personnel via a single hyperlink. Usersaccess and interact with Content Central using a preferred Web browser,and software updates occur only at the server. Content Central isinherently remote-capable, but many organizations choose to use it onlyfor internal operations, fitting well in accounts-payable processing.

Inside Content Central users find tools to create, capture, retrieve, modify,manage, and distribute documents. Creation of documents occurs viaPDF-based e-forms. Files of any type can be captured from scanners,folders, e-mail addresses, or user input. Content Central converts scannedimages into fully searchable PDF files, and all documents can be retrievedusing content keywords and other index information based on thedocument type. Integrated e-mailing and faxing tools let users distributedocuments without requiring any e-mail or fax software locally.

Content Central includes a browser-based document viewer andannotations editor that users interact with inside the Web browser. Full

document editing begins with a single click, launching a documents nativeapplication. All revisions are maintained separately for historical purposes.An intuitive approval-processing system allows users to approve or rejectdocuments thathave been routedto them. Anembeddedworkflow enginehandles theautomatedportions of the

software,including sendingnotifications andperforming otherscheduled orevent-basedactions.

Figure 1: Content Central User Interface

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PART I

S TREAMLINING A CCOUNTS P AYABLE

Centralizing Payables DocumentsThe first step in converting most of accounts-payable workflow to adocument management system is to determine the various documenttypes involved and understand when and where they come into theprocess. From the buyers perspective, a purchase order is typically thekey document type in a purchase, but the invoice from a supplier orvendor is what begins the payment process. Any supporting documentsthat are needed to process and pay invoices will be defined as individualdocument types within Content Central. Each document type has its ownconfiguration, including the indexing structure, security permissions, andretention policy.

The Packet tool in Content Central will automatically link the documenttypes for a given purchase by a key identifier, such as the purchase-ordernumber. This virtual connection between documents is established assoon as the key values (in this case, purchase-order numbers) arrive inthe system, which cuts out the time spent actively gathering supportingdocuments from various sources to cut a check for a supplier. By usingContent Central to manage accounts payable, the overall processbecomes passive: users capture and identify documents as soon as theyarrive, and the software links them automatically while managing their lifecycle.

Figure 2: Accounts-Payable Packet with Missing-Check Identifier

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After document types have been configured, you will need to determinethe format of each document and its corresponding method of capture. Forexample, it will be common for many invoices to arrive in paper form bymail.

Content Central captures paper invoices with the help of a documentscanner. DirectScan, a browser-based scanning applet within ContentCentral, allows users to image and upload documents to the server.Alternatively, Content Central can accept images from productionscanners or multi-function devices, and an applet exists to simplifyscanning from select multi-function peripherals (MFPs).

For electronic invoice delivery, Content Central can monitor one or moree-mail addresses and capture either the body of the e-mail or itsattachments. XML-based load files can be used to provide index androuting information about the documents they describe.

Because each vendor is different, capturing the details of the invoice canbe difficult to automate, but you can choose to provide index informationbefore or after capturing an invoice. The minimum amount of indexingneeded includes the invoice number and purchase-order number. Enteringadditional index information, such as the vendors name and invoice date,will help users find invoices later.

This configuration procedure will be replicated for each of the remainingdocument types in the process.

Making Purchase Documents ElectronicCreating purchase requisitions and purchase orders electronically is aquick way to reduce the amount of paper produced. Content Centrals e-form technology can store PDF-form templates used to establish newdocuments in the system. After a new document has been generated withthis process, Content Central can automatically route it to an approvalprocess as well as distribute it to appropriate parties.

If your purchase process is currently paper based, you will experience animmediate savings in paper costs and storage space for these documenttypes because they will be printed rarely in your office. If you already havean accounting system that handles your purchase documents, you canchoose to integrate that information as described in the next section.

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Integrating Software Applications

Content Central can retrieve index information from accounting softwareand other applications by connecting to one or more databases andperforming lookups. The DMS establishes connections using ODBC (opendatabase connectivity). This information can be used to provide one ormore index values in documents. Some documents can be indexedcompletely using a single index value used as the key value for lookups.

D ATABASE SUPPORT FoxPro Microsoft Access Microsoft Excel Microsoft SQL Server MySQL Oracle Pervasive PostgreSQL ProvideX (Sage) QuickBooks QODBC (FLEXquarters)

This is particularly useful for incoming supplier invoices when ContentCentral has been connected to accounting software like QuickBooks. Afterprocessing clerks provide the PO number, Content Central performs adata lookup, and the integration can return the vendor name, PO amount,

PO date, and other relevant index data. The information will be asaccurate as what is already in the accounting database.

Implementing Electronic WorkflowNow that accounts-payable documents have been created, captured, andindexed within the document management system, daily workflow can betransformed from a physical process to an electronic one. ContentCentrals built-in approval-processing system and workflow engine containthe tools necessary to route, approve, reject, distribute, and manipulate

accounts-payable documents. Approval processes can be created foreach document type used to initiate workflow.

Figure 3: Electronic Workflow of Purchases

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For example, an approval process might be created to handle theworkflow of a new purchase. In this scenario, an employee can request apurchase by completing a purchase-requisition form in Content Central.The new form is immediately placed on an approval process where it mustbe approved by a department manager. The manager approves thepurchase in Content Central, and it moves to a purchasing agent. Theagent creates a purchase order the same way, but now the suppliers e-mail address is added as part of the document. After the PO has beencreated, Content Central can route it directly to the suppliers e-mailaddress without further human interaction. (Figure 3)

Another example is invoice processing. After an invoice is captured, itsimmediately routed to a processing clerk. The clerk then determines thepath it should take based on the department that it involves as well asother factors relevant to the process.

Furthermore, Content Centrals workflow engine can be configured tobegin payment workflow only when the necessary documents have arrivedto support the process. In this case, a separate check-and-balanceworkflow rule should be created to start the payment process if one ormore supporting documents have not arrived after a given amount of time.This ensures all invoices will receive attention in a timely manner.

An obvious business benefit of an electronic approval process is the smallamount of human involvement required. The software handles all routing,deadlines, notifications, tracking, and post-approval actions. Personnelsimply approve or reject the items in their individual queue.

PART IISEVENSOLUTIONS FOR COMMON A CCOUNTS-P AYABLE ISSUES

Early-Payment DiscountsPrioritizing invoices for early-payment discounts isnt the easiest task in apaper-based environment. By entering payment-term data when capturinginvoices, Content Centrals workflow engine can set approval-processingpriorities.

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For example, a workflow rule can be createdto set a high priority on any invoice withpayment terms 2/10 Net 30 (2% discountwithin 10 days, due in 30 days). When theinvoice is captured, the processing clerkselects a matching payment-term item from achoice list. After the invoice has beencommitted to the system, the workflowengine begins the approval process and setsthe priority accordingly.

Additionally, an administrative option can beset to force users to approve or reject itemsin their queue by order of priority, causinginvoices with discounts to be processedbefore those without discounts. To enablethis feature, select the Force user to approve only first item in the Approval Queue optionfollowed by the Priority sorting method. Dothis in the profile of each user involved. Figure 4: Entering Payment Terms

Invoice FraudPaying only legitimate invoices can be a challenge if processing clerks are

not familiar with your suppliers or vendors. To remedy this situation,department managers should be included in the workflow to approve allinvoices that are relevant to their individual department. When configuringan approval process for invoice processing, be sure to add a stage for theuser or group representing a departments manager or managers.

Figure 5: Document Revision History

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Its unfortunate but possible that some fraud can occur within your office.Content Centrals revision history keeps track of all changes, approvals,and rejections; a detailed audit trail can be produced when needed. Iftheres any question about a particular document or file, the Document History menu item from the View menu provides this information. (Figure 5)

Duplicate InvoicesContent Central can alert users duringinvoice capture if the invoice number for aspecific supplier already exists in thedatabase. This helps prevent processing thesame invoice twice, avoiding the frustrationthat can come from trying to get a paymentreversal or credit.

Figure 6: Duplicate-Value Check

When configuring the index field for Invoice Number , select Check for duplicate value on update/commit followed by a sub option Limit duplicates by other field . Pick the fieldrepresenting the supplier/vendor name oridentifier. By doing so, Content Central will alert users when entering aninvoice number and vendor that already exist on an invoice in the system.

Check ProductionReceiving, processing, and approving inbound invoices makes up the bulkof the work involved when paying a vendor, but a method of payment,often in the form of a check, still needs to be produced. Take advantage ofyour accounting system if it can be configured to carry out tasks based onexternal signals.

Content Centrals workflow engine includes the ability to run an externalapplication or script based on an event. First define the script or

application that will instruct your accounting system to produce a check.Do this by defining an External Application inside the Configuration Manager . You can specify information about the transaction usingcommand-line parameters. (Figure 7)

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Figure 7: External Application for Check Production

Next, define a workflow rule to launch this external application uponcompletion of an approval process by combining a single trigger and

action . Create a workflow trigger of type Approval Processes: Movement on Process with the evaluation type Approval by Final Member . Be sure tochoose the correct approval process. Then create a workflow action oftype Run External Application , selecting the external application youdefined earlier.

After an invoice has been fully approved, the workflow engine will launchthe application or script instructing your accounting software to produceand/or print the check.

Electronic InvoicesIt doesnt make sense to print invoices that arrive by e-mail, so let ContentCentral capture them in their native format as soon as they show up. Thisworks best for suppliers you work with on a regular basis. If you have asmall number of these high-use vendors, create an e-mail account foreach. Then create a Capture Job for each of these e-mail addresses usingthe Catalog Manager . (Figure 8)


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Content Central will monitoreach e-mail address throughoutthe day and night. Wheninvoices arrive they will berouted to the Coding Queue forfurther processing. You canhave processing clerks notifiedby e-mail when new invoicesarrive by establishing aworkflow rule consisting of aCoding-Queue Arrival triggerand a Send E-mail action.

Figure 8: E-mail Capture Job for Invoices

Figure 9: Auto-Increment Field

Purchase-Order CreationHandwriting purchase ordersand faxing them to vendors isstill a common practice in manyoffices. Consider changing thisusing Content Central. Convert your purchase-order template into a PDFform, providing data-input fields in the form of textboxes and selectionlists. Add some logic to the form to calculate totals. Upload this form intoContent Central using the Capture Form feature in the document type forpurchase orders. Afterwards, new purchase orders can be established by

selecting Form from the Capture Type list in the Capture area of ContentCentral.

PO numbers can be generated on the flywith the use of auto-incrementing indexfields. When creating a field, choose theNumeric type and select the Auto Increment Value checkbox. Initially, you can specify astart value to maintain the numberingscheme of your existing purchase orders.

Beyond the form creation and PO-numberconfiguration you can add an optional E-mail Address field to the purchase-order document type. The workflow enginecan be configured to e-mail new purchase orders to the recipient providedin this field. The e-mail can be sent before or after any approvalprocesses.

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Lost or Missing Documents

Estimates show that it costs $120 to find a lost or misplaced document,and $220 to reproduce a lost document. 1 A strong effort should be madeto capture as much of the paper that comes into your office. OCR (opticalcharacter recognition) technology recognizes and converts the text onimages of paper documents, and this information can be used to finddocuments in a matter of seconds.

Redundancy is another advantage to using document management software to centralize documents and information. Numerous copies ofyour data can be created for backup purposesa nearly impossible taskin the paper-based world. Furthermore, the cost of computer-based

storage space is extremely inexpensive compared to the price of addingfile cabinets, shelves, and real estate.

1Coopers and Lybrand

SUMMARY

Document management software provides a means to transform the way

accounts-payable processing gets done in todays business environment.Content Centrals browser-based model makes full use of the speedcapability of todays network infrastructure. Your organization canexperience a measurable savings in overhead expenses and labor bycentralizing payables data, integrating business software, andimplementing electronic workflow.

A number of solutions exist for common accounts-payable issues whenusing an electronic document management system. Some solutions, suchas enabling workflow rules to automate the purchase-order deliveryprocess, increase overall in-house productivity. Others, like entering

payment terms from an invoice for approval-process prioritization, cansave money.

The methods and solutions described in this white paper for streamliningyour accounts-payable process can be applied gradually over time, andthe best results come from properly training and encouraging personnelinvolved in the operation.

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A BOUT A DEMERO

Ademero develops and supports document management software andprovides related professional services designed to automate businessprocesses and simplify office workflow. Based in the Tampa Bay area,Ademero supports its customers with availability 24 hours-a-day on everyday of the year.

The company's flagship product, Content Central, is a browser-baseddocument management system created to provide businesses and otherorganizations with a convenient way to create, capture, retrieve, edit, andmanage documents and other content originating in hard copy or digitalform.

For more information on Ademero, visit www.ademero.com .

Copyright 2010 Ademero, Inc. All Rights Reserved. Reproduction in whole or in part in any form or mediumwithout express written permission is prohibited. Trademarks contained herein are the property of theirrespective owners. Ademero believes the information in this publication is accurate as of its publication date;information is subject to change without notice.

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Ademero Document Management Software - Streamlining Accounts Payable

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