The impact of implementing effective automation technologies and processes can be significant.

by Danny Schaarmann, CEO & President, xSuite North America

Given the massive emphasis being placed on digital transformation in general and automation in particular, organizations can perhaps be forgiven for thinking that these major trends are goals in their own right.

After all, almost every conceivable business process now has an app that promises to help users do things faster, more effectively and at lower cost. In many cases, these digitized solutions are as good as they claim, but when looking at critical tasks such as the automation of financial processes, it’s always worth stepping back and considering both the opportunities and challenges.

Arguably, one of the most important issues any team needs to address is when is the right time to move forward with a digitized approach and away from tried and tested solutions? Just as important is whether the impact and benefits of digitization can be expressed in tangible figures that will demonstrate an improvement in efficiency or wider ROI.

Take the automation of inbound invoice processing, for example, where the first question most people ask is: what steps can they automate? Typically, there are two places to focus on –  first is the automatic capture of invoice contents, followed by the options for workflow-supported invoice processing.

When building a process to automatically capture invoice contents, most organizations employ Optical Character Recognition (OCR) to extract content from digital invoices. Typically, these will include PDF files or scanned paper invoices, and the content detected by the OCR technology is then automatically passed to the ERP system.

The particular advantage of this approach is that it saves considerable time usually taken with manually typing in the invoice contents. Across an entire team, this adds up to a significant reduction in the workload for accounting staff. In one real world scenario, an organization that had implemented OCR worked out that they were subsequently reducing time spent on the process from nearly 40 minutes to just 25  – a savings of around a third.

Turning to invoice processing – which includes validation, verification, completion and release – this often requires input from several employees across different teams. In doing so, it depends on a precise workflow involving the accounting department, the department that ordered the goods..

An automated workflow solution for processing invoices, however, can both optimize and accelerate collaboration between these parties. In practical terms, as soon as a work step is completed, the invoice is immediately made available to the processor responsible for the next step. Right away, there’s no more waiting for the in-house mail before the workflow can move forward.

What’s more, because this collaboration is taking place online, users can have access from any location. In today’s increasingly remote working environments, this is particularly useful for employees who perhaps travel a lot and are not in the office every day, such as cost sales employees.

Bottom Line Benefits

The impact of implementing effective automation technologies and processes can be significant. For example, a recent industry survey asked users about its effect on their workload and efficiency, revealing that the lead time of an invoice was reduced by 50 percent.

These efficiencies become even more apparent when including cash discount losses and dunning charges into any ROI analysis of investment in automation. There’s no doubt that many organizations out there lose substantial sums of money by wasting time across these processes, whereas they could be making money by being more efficient. The potential is huge, with one organization saving around half a million Euros a year by minimizing their processing time.

While digital transformation should not be pursued as an end in itself, applying the right technologies and processes to the right business challenges can deliver significant benefits. Organizations that approach automation with that mindset are in an ideal position to succeed in both the short and long term.