Consolidation of Invoices by pimpdaddymust

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									   Consolidation of Invoices

 This presentation is an overview of invoice consolidation.
 We will cover:
      Objectives
      Assumptions on current scenario
      Options for enhancement
   Objectives

 The primary aim is to reduce the overhead costs of processing
  supplier payments
 Savings are made by:
      Reduction in the volume of paper work submitted by suppliers.
      Reduction in volumes of data entry.
      Improvements in accuracy of invoice entry
   Assumptions on Current Scenario

 The current assumptions have been made
      The primary source of invoices is Purchase Orders
      There will be General Expense purchase orders
      Invoices are currently received matching one or more purchase order
       distributions
   Problems with Consolidation

 Very little benefit if just a change to a consolidated invoice
 Manual entry of consolidated invoices leads to small savings
 Data entry for invoices turns into intensive activity
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 Even if the goal is achieved it is the supplier who benefits the
  most
   Improvements to Invoice Processing

 To gain benefits some automation is required

 The primary options are :
      Scanning to read paper invoices
      Providing suppliers with on line submission
      Eliminate invoices where possible
   Scanning of Invoices

 The first method of improving invoice processing would be to
  scan and OCR
 There are common off the shelf packages to do this
 Of course this also assumes that the supplier uses a fixed
  template for their invoices, which most do.
   Process of Scanning Invoices

 First the invoice is decoded
      The invoice is received
      Then scanned and using OCR tools converted to text
      The text document is then applied to a supplier based template to
       extract information
 Stage 2 Loading invoice
      The text interpreted from the invoice is loaded into the AP interface
      The invoices are then imported
      Errors will have to be manually corrected or keyed
 Stage 3 Approval
      At this stage the current business processes can be used for invoice
       approval an payment.
   Issues with Scanning

 Advantages
      Scanning is a proven technology with plenty of sources
      It integrates well into existing systems
      It can just replace one stage
 Disadvantages
      There is a significant cost for hardware
           £5000 to £10,000 for a high volume scanner
      If the scanner develops a fault then manual key entry is required until
       repairs are performed.
      Not every document scans properly. Poorly printed invoices are
       problematic.
   Electronic Submission

 Using a web based service
 Suppliers can log in to look at outstanding Purchase Orders
  and their status
 Suppliers select which received items to submit invoice
 Once the invoice is submitted it can be loaded via AP
  interfaces and go through normal approval paths
 Of course this wouldn’t work for General Expense invoices as
  there is no Purchase Order to match against
 For General Expense an upload facility or gateway is required
   Issues with Electronic Submission

 Advantages
      Its just a progression from scanning
      Some off the shelf scanning software can process external feeds too
      It puts most of the cost of invoice processing on the supplier
      Errors in keying are near eliminated
 Disadvantages
      There is a cost for development
      There is a cost for training suppliers on usage
      Some invoices may still need to be processed by hand
   Self Invoicing

 For Purchase Orders, why bother with supplier invoices?
 On receipt of goods against a purchase order
      Generate an invoice number automatically
      Load into the AP interfaces and process
      Use Oracle Workflow to trigger the invoice generation
 At the end of each month/quarter send out a remittance
  statement to the supplier listing:
      Items paid for
      Items awaiting delivery
 Effort is the spent looking at problems rather than just day to
  day processing.
   Issues with Self Invoicing

 Advantages
      It can be implemented with a relative low cost compared
      Invoice matching becomes a non issue
      Errors on invoices become non existent as its triggered by the PO
 Disadvantages
      General Expenses won’t benefit from this
      For some suppliers it may be a culture shock having the customer
       dictate invoice numbers and invoices.
    Benefits

   For a typical invoice it is estimated
   For a paper invoice approx £10
   Consolidation of invoices can only save a fraction
   By automatic scanning can save 50%
   Self invoicing can save 90% or more

								
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