Susan was the Financial Controller at a leading print services company, and she walked into her Accounts Payable department to discover they were struggling to process invoices, even with a supposedly automated solution. Susan started to investigate alternative solutions and thought that maybe one of the key areas would be around how to maximize straight-through processing.
But is straight-through processing the answer and what does that mean?
Had Susan considered the recognition rate, how many invoices will go straight through?
But is this the right question? Is this relevant and what factors impact the ability to achieve this?
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Straight-through processing means that when an invoice is received by an organization, it goes directly into their ERP platform for payment without any intervention. How is this achieved?
This can be defined as a supplier invoice arriving into an organization as an image file (e.g. PDF attachment in an email) or piece of paper where it will need to be put through a scanner. Then intelligent OCR (Optical Character recognition) would be applied to the image file to extract all the relevant and key fields from the invoice, such as:
Matching the extracted data to the Supplier Master Data held within the client’s ERP is the next step. If everything matches, it is within tolerance, and correct, the invoice can then pass straight-through to the ERP without any human intervention.
Yes, it is possible but the percentage you achieve will depend on many factors such as your Purchase Order first-time match rate, how accurate is your Supplier Master Data, the use of Blanket POs, and many more.
If you cannot achieve that 100% straight-through processing as it is rarely possible then manual intervention is inevitably going to be necessary.
Critically the question that should be asked of a supplier’s system is this:
This is the real area you need to focus on when looking at solutions to automate your invoice processing. Not the simple question of “What is your recognition rate to enable straight-through processing?”
For success in achieving invoice automation, there are always many considerations, so it helps to start with the fundamentals:
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About the Author: Jason Howard, Sales Director, Arcivate
Jason Howard has been immersed in the document management and invoice automation arena for over 25 years. He has been instrumental in driving the go-to-market strategy for Mi Invoices, Arcivate’s automated invoice processing solution.