7 Ways to Calculate Your Total Costs of Invoice Processing

All companies have to process invoices. It’s just a part of doing business. However, once multiple locations come into play, the mountains of invoices can become a real headache – and a substantial drain on profits. To understand exactly how much invoice processing is costing your business, you must look at the entire invoice processing cycle.

Here are 7 things to review when trying to come up with that elusive number:

  1. How much time does it take to process and mail the invoices from each location to the main office? At a typical store, the employees must sort, categorize and manually enter each invoice’s data into a local system. They must then pack and ship those invoices to the corporate office. The time spent on these tasks can really add up.
  2. How many hours are spent at the corporate office reviewing each invoice? Once the invoices reach the corporate office, the Accounts Payable department must spend time reviewing the invoices and prepping them for outsourced scanning.
  3. How many hours are spent trying to find, and then fix, data entry errors? When they find discrepancies between the values coming from the locations and their calculations, they must manually track down and correct the issues.
  4. How much does it cost to ship the invoices from each store to corporate, then from corporate to an outsourced invoice scanning company? This one is pretty straight-forward. All of the postage fees must be included in this lump sum.
  5. How many hours of productivity are lost while your business waits for the scanned images? Once the invoices have been mailed, it can take 7-10 days for the outsourced scanning company to receive and scan them. Are you paying people to wait?
  6. While waiting for the invoices to be processed manually, did you miss out on any early-pay discounts, or did you get charged a late fee? If it takes 1-2 weeks to get an invoice prepped and in the system, you could miss out on important discounts or be charged costly late fees. The Aberdeen Group found that, “Annualized savings when capturing an early payment discount is 11.7%.”*
  7. How much are you spending on paper invoice storage? This cost would include the room, the cabinets, the folders, and other furniture or supplies used to store the paper invoices.

To estimate your cost per invoice, use the following basic formula with values for one month:

Personnel costs + late fees + lost discounts + postage costs + storage costs / # of invoices processed = cost per invoice

Here are some statistics from the Aberdeen Group, when comparing AP Leaders and Followers (in automation):

Invoice Processing Statistics

 

How does your cost per invoice compare with that range?

If it is close to $4.34 per invoice, then you are ahead of the pack. If it’s not even close, you have some work to do.

Has your business considered moving from manual invoice processing to an automated solution? Are you skeptical about how much the move could save you?

When comparing the two options, it’s important to make sure you have determined the REAL cost of manually processing invoices. You might be surprised at how much the seemingly minor inefficiencies are costing your business.

To learn more about how you can reduce operating expenses by streamlining invoice processing, download our FREE whitepaper.

 

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*Ball, Bryan. “Leaders’ Winning Strategies for Common Issues in AP and AR.” Aberdeen Group, October 2014.

Top 5 Ways to Automate Invoicing From Individual Locations to Back-Office

Top 5 Ways to Automate Invoicing From Individual Locations to Back-Office

Do you have multiple business locations that mail invoices to the back-office each week for processing? If you do, then you know all-too-well that the process can be error-prone, time-consuming, and expensive. Fortunately, there is hope.

Here are the top 5 ways to improve your current process by adding automation.

  1. Use an in-house scanning solution. Instead of manually keying invoices and outsourcing the scanning process, use an in-house scanning solution. Invoice automation software saves time and money by eliminating mailing costs and reducing overtime for employees working to meet deadlines. Your invoices could be in the system and visible in half the time.
  2. Use a software solution that seamlessly integrates into your enterprise resource planning (ERP) system. By using a system that integrates into your ERP, errors can be radically reduced while accuracy is improved. This not only improves overall profitability, but also minimizes security risks and compliance challenges.
  3. Find a solution that can handle practically any invoice. Invoices come in many shapes and sizes. Some are typed, while others are hand-written. A robust data capture system must be able to clearly identify the locations of each value and interpret those values. The invoices your business receives don’t adhere to one format, and neither should your invoice automation system.
  4. Make sure the system you use is scalable. As your business grows, your invoice automation solution should be able to grow with you. Make sure the system you choose does not require expensive customizations to include new locations. With a centralized capture system, new locations can simply tie back to the home office using web-based scanning.
  5. Find a vendor that demonstrates the necessary consultancy skills to understand your existing processes. Systems are rarely one-size-fits-all, so you need to partner with a software provider who will review your current processes, document the requirements, and then follow-up after implementation. Many times, the benefits experienced in the target business group can be expanded to include other departments. That’s why it is important to have consultants that are able to see past the initial pain-points.

Managing the invoices for multiple locations can be a real challenge. By using a data capture system, your employees can have the data they need – when they need it – and you can improve the accuracy and profitability of your business.

To learn more about how data capture can help, download this FREE white paper!

To see how our product has helped O’Charley’s Restaurants, download the O’Charley’s case-study.

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Leveraging Big Data as a Startup

Have you heard of Big Data?

Of course you have. And if you are a startup, figuring out how to gather and manage that data in a cost-efficient way can be overwhelming. All businesses are concerned about keeping costs low and profits high. For startups, this is especially true.

When expenses are being closely monitored, how can you possibly find room in your budget for data solutions? The answer is that you simply must. As an article from FierceBigData points out, “Many startups mistake running on a shoestring to mean tying themselves in knots. They work long hours powered by dreams and mired in details. But that’s not the best way to run the race, much less win it.”

According to Bluenose, a producer of customer analytics, “35% of startups are lagging behind in their big data solutions.”

Big Data for Startups

To stay competitive, understanding your business data is imperative. So, where do you start?

  1. The first step is to have a versatile and user-friendly data capture solution, such as Advanced Capture Spectrum. Remember that the accuracy of any data analytics tool is only as good as the data itself. If your business is still using manual data entry, you could be setting yourself up for costly mistakes and faulty analytics.
  2. Find a data analytics tool that fits your company’s needs. Some popular tools range from a desktop tool such as Tableau to a more robust system, such as IBM’s Watson.
  3. Leverage your data in meaningful ways to grow your business. In Bluenose’s full info-graphic, they share Five Ways Your Business Can Leverage Big Data:
    1. Personalize the Customer Experience.
    2. Predict and Reduce Churn.
    3. Streamline the Sales, Supply and Staffing Process.
    4. Target New Customers, Re-target Existing Ones.
    5. Make Use of Social Data.

While harnessing the power of Big Data can be overwhelming, including a robust, versatile data capture solution to your business process will help you keep costs low and accuracy high. When your data is accurate, you waste less time fixing bad data and can spend more time focusing on what’s really important: growing your business.

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5 Steps to Eliminating Data Entry Errors

Eliminate Costly Data Entry Errors

Data entry is a fact of life for every organization. It’s the process of taking information from one source, such as an invoice, or other physical document, and manually keying it into a database.

Let’s face it: data entry can be monotonous and time-consuming. At the same time, it is also very important to a company’s success and profitability.

Adamr freedigitalphotos.net
Data entry personnel are under a lot of pressure to be fast while maintaining accuracy. Unfortunately, the faster people enter data, the more mistakes are going to happen. Maybe a number is transposed, or an address is mistyped.

Either way the data is wrong. Mistakes in your data can then lead to big trouble.

So, here’s the critical question:

How can businesses improve accuracy and speed at the same time?

According to Joshua Phillips’ article, How to Eliminate Data Entry Errors, there are some basic strategies that can make a big difference:

  1.  Learn the keyboard. Memorizing the location of keys and proper hand placement will allow you to type quickly and accurately.
  2. Set up a suitable work environment. Place your keyboard directly in front of you and reposition your chair so it is at an even height with your work desk.
  3. Eliminate as many distractions as you can from your workspace. When your attention is unfocused, errors are more likely to occur.
  4. Practice your typing skills with online programs. Many programs are offered for free on the Internet that will grade your accuracy and speed.
  5. Double check your work. Though it might cause you to lose time that could be spent entering, many businesses value accuracy over speed. Taking the extra seconds to verify your work is properly entered does more good than harm.

Human error is unavoidable. Following the advice above can help reduce errors, but you are still taking risks when it comes to your data. Reduce the probability of human error by automating your entire data and document lifecycle. To learn more about how automation can help your business overcome data entry challenges, download our free white paper.

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(Photo credits: Adamr- freedigitalphotos.net)

Are You Being Smart With Your Data?

How are you using your data? Are you accurately capturing and storing it so it can be used to develop insights and enable your business? Or is it stored and disregarded until needed? The trend of smart data is on the rise, calling into question the life expectancy of big data.

Information-Age recently released an article to examine the difference between the types of data.

“Big data as a concept is defined around four aspects: data volume, data velocity, data veracity and data value.

“Two patterns emerge when these characteristics are looked at closely. While the volume and velocity aspects refer to data generation process and how to capture and store the data, veracity and value aspects deal with the quality and the usefulness of the data leading to the point.”

All four of these aspects are critical to business success; however, veracity and value are often overlooked.

“If businesses simply go by the volume and velocity aspects, it qualifies as a big data problem. However, in reality, a lot of this data comprises ‘noise’ (information or metadata having low or no real value for the enterprise).

“The purpose of smart data (veracity and value) is to filter out the noise and hold the valuable data, which can be effectively used by the enterprise to solve business problems.”

When making the shift from big data to smart data, it’s critical to identify which data points will lead to actionable insights. This way you are truly measuring what matters and not getting bogged down in the noise.

As the article points out, “The collection and exploitation of data is meaningful only when it is used to optimise and automate solutions and solve problems (data-driven decision-making).”

Simply put, having data and not using it in your business process is like knowing history but not learning from it.  Developing insights can result in monumental shifts in the organization or even just subtle tweaks. Having the data and learning from it is what separates a median organization from a “best in class” organization.

Data is more valuable than ever before; are you turning your big data into smart data? To read more about the rise of smart data, click here.

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Got Paper? We’ve Got Solutions

You’ll be hard pressed to find an industry that doesn’t have documents that need to be managed and stored. Whether you’re on Main Street or Wall Street, you have invoices, contracts, and various other forms of documentation that need to be handled securely and accurately.

Without a consistent process, the data and document lifecycle can become complicated and confusing, which commonly leads to errors. One Advanced Data Spectrum client was operating with hundreds of locations and multiple brands throughout 43 states. They had various suppliers that sent invoices to the individual store. The local invoices were input at the stores and then the paper was couriered to the head office each week. Both the couriered and direct bills were processed for general ledger coding and input using a back-end accounting system.

The process was error-prone, and required trained accounting staff to review the paper documents. Input errors needed to be identified and then manually corrected before the file could be loaded and the check-run completed. Due to the large amount of manual handling, it became difficult to track discrepancies. Further, the manual process made it nearly impossible to document errors so that feedback could be provided to the stores for improvements.

Advanced Retail Spectrum™ was implemented as a solution to their error-prone process. The system paid for itself in less than one year.  Advanced Retail Spectrum increased processing efficiencies in Accounts Payable by 25% and is expected to improve by another 15%.

The improvement in efficiency has resulted in benefits in several other areas of the business.

  • Employees are working less overtime to complete the work needed to cut checks
  • The ability to take advantage of early-pay discounts
  • Increased visibility into the financial position of the company

These same benefits can be felt across any industry looking to improve the capture and management of their document lifecycle. Learn more about the benefit of our solutions here.

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Don’t Let Inaccurate Data Put You in the Jailhouse

Don't Let Inaccurate Data Put you in the Jailhouse.

Alcatraz Island

Thomas Renault of San Francisco knows all too well that inaccurate data can cause a major headache. His office phone number was incorrectly printed on literature for Alcatraz, the notorious prison located in San Francisco Bay.

‘”The number is off by one,” he said by phone. “A long time ago, the fonts for 7′s and 1′s looked the same, and I think my number got reprinted on all the Alcatraz literature.”’

For the past five years, Thomas has received daily calls from tourists hoping to book a tour to the island. Despite the error being corrected, the material with his number is still in circulation and continuing to generate calls for Alcatraz.

Fortunately, Thomas has a good attitude about the situation and has taken the calls in stride, but that may not be the case when it comes to your business or your clients.

Human error is unavoidable. During data entry, errors occur in price, invoice coding, or simply in transposing numbers. To avoid errors in most cases, staff must manually review the paper documents to correct mistakes. This is a lengthy and tedious process that costs businesses both time and money. When those mistakes aren’t caught, the outcome can be costly.

Don’t take that risk when it comes to your data. Reduce the probability of human error by automating your entire data and document lifecycle.  Helping you prevent errors and eliminating the need to spend valuable time checking for typos are just a few of the ways Advanced Data Spectrum can solve your operational challenges.

To learn more about solving this common obstacle, watch Solving the Accounts Payable Challenge here.

Focus on the Mission

By Clint Carter, President/CEO of Advanced Data Spectrum

Early in my career, I had a passion for not just technology, but operational enablement using technology and positively impacting an organization and its mission. I realized that purely focusing on technology is limiting as a leader in the technology space. That mindset change also dramatically shifts the way you interact with your customer in very positive and meaningful ways.

When I was promoted to my first leadership role as a young lieutenant in the Air Force providing IT management for our squadron, I quickly saw the extreme of not focusing on the operational mission in delivering technology to your customers. My predecessor had run the IT shop with tight controls on workstation and server configurations and required squadron personnel, even senior to him, to prove that they really needed the IT resources they requested before taking any action. Needless to say, the squadron would try to work around him whenever they could, installing software themselves (sometimes exceeding our purchased copies) and going through other channels to avoid dealing with him just to get what they needed to get their job done.

Our squadron’s mission was focused on flight and laboratory testing of critical aircraft systems. Not stated, but implied, was the fact that the lives of the crew flying on that aircraft depended on our success. Technology was an essential tool to accomplish that mission. I realized that my job was to help the squadron achieve the mission, the REAL mission, not just to manage the squadron’s IT resources and enforce IT rules, such as licensing. I needed to focus on the bigger picture – the squadron mission – and not be constrained by a limited view of the role of IT.

When I took over management of the IT department, I knew that communication, collaboration, and alignment with the rest of the squadron would make the IT department a contributing part of the squadron successfully achieving our mission. I spoke with the different department heads and their teams to ensure that we were aligned with their needs. I shared our department’s commitment to help them get their job done. We streamlined the IT help desk request process. We allowed certain departments some flexibility in installing their own software as long as they reported the installations to us for licensing compliance. We focused on helping our squadron accomplish the mission using technology. We were better able to align with their goals and provide technology options to meet them. I was included in senior staff discussions about operational issues and contributed to the discussion at both an operational and technology level. The change created a dramatic improvement across the department and the rest of the squadron. The alignment meant we were equal members of the team. The attempts to obstruct or avoid IT compliance stopped.

That experience helped me grow as a leader and shaped my future as an entrepreneur in a technology business. I started Advanced Data Spectrum 21 years ago and established our company’s core value of being Stakeholders, committed to our customers’ success. The core value helps our team remember that our mission is not delivering technology solutions, but to help our customers achieve THEIR mission. The WAY we do that is to help them solve their operational problems and improve their operations using our technology solutions. I believe that philosophy has given our team a customer focus and a mission bigger than meeting the next deadline.

We have been successful in our mission through our products. We deliver operational enablement through the way that our automated data capture product, Advanced Capture Spectrum, works within an organization. We streamline getting data from paper and electronic documents by automatically capturing typed and handwritten text from those documents using optical character recognition (OCR), intelligent character recognition (ICR), and field-level capture techniques. The captured data is automatically updated into key business systems. Rather than require an IT level person to constantly tweak and manage the system and configuration in order to capture new documents that come in that might not fit the current rules, Advanced Capture Spectrum is designed from the ground up to be a business solution used and managed by business users. This approach helps to eliminate IT staff costs and bottlenecks to the process, which become hidden costs in using the technology. We feel that the operational department understands the documents and process best and is best positioned to manage the daily use of the technology within the department. Using a wizard-based approach, the operational team member can review documents that do not fit the current capture rules and train the system to capture the data from the document. The entire process is owned by the operational department as it always has been. The technology simply helps them do their job more efficiently.

As the leader of our company, the mission keeps me energized to look for new ways to meet the changing goals and needs of our customers, to find opportunities for our company to expand our technology solution offerings, and to grow our company. We started over 21 years ago as a one-man consulting company. Today, we are a multi-national data and document solution company helping our customers transform their data and documents into actionable information to drive business success and profits.

I find that my focus on our mission and our customer’s mission continues to develop me professionally. I get to have conversations with business leaders – company executives, department heads, and innovators – about their mission – what they do, how they do business, what challenges they face, and how it impacts their bottom line. We discuss options to address those areas of the business, and we align with their company mission and goals. We work on solving the business problem, not just delivering technology. In the process, I get to share my knowledge and experience with our customers and broaden their perspective on the business challenges they face, but I learn and grow as well, because my business knowledge, experience, and perspective is also expanded. Moreover, I get to share in the personal satisfaction of helping them accomplish their mission and being a part of something more than myself or my company.

Who Has the Control? The IT Spending Control Shift

ComputerWorld recently released a report titled, “CIOs Still Control IT Spending” that investigates the shift in tech spending from CIOs to business units. While the majority of decisions still lie with CIOs, a trend is expected to spread over the next few years that will see much of that buying power shifted or shared with business units.

“CIOs still have the last word over most IT spending, but over time they will work more closely with business units on buying decisions, a Forrester Research survey finds.

Only 6.3 percent of new technology purchases in the U.S. were made and implemented solely by business units in 2013, according to the report’s author, Forrester vice president and principal analyst Andrew Bartels. Some 9 percent of spending involved technology the business unit chose but the CIO’s team implemented and managed.

However, ‘the ideal tech-buying process is one in which the business and the CIO’s team work together to identify a need, find and fund a solution, choose the right vendor or vendors, implement it, and manage it,’ Bartels wrote in the report. ‘We estimate that more than a third of tech purchases will fit that profile by 2015.’

Moreover, the share of tech purchases the CIO’s group ‘primarily or exclusively makes’ will drop from 55 percent to 47 percent by 2015, Bartels added.”

The article is quick to point out that the process of purchasing technology is not a simple one, which must be taken into account.

“Still, ‘pundits who make sweeping statements about tech spending shifting from the CIO’s department to the business fail to appreciate the complex process involved in buying and owning technology,’ he wrote.”

In our experience, this trend in the shift of spending correlates to the change in the way technology solutions deliver value within the business.  As technology solutions continue to focus on helping to solve a specific business challenge and the enablement of the business user, the decision to move forward with any solution is less focused on the underlying technology and more so on the whether the solution is able to effectively solve the business problem with minimal IT resources required.

Have you seen a shift in your business or with any customers? To learn more about the shift in control of IT spending, read the remainder of the article here.

Overcoming Six Common A/P Challenges

The A/P Challenge

If you have experience with Accounts Payable, you’re sure to have encountered most, if not all, of the below challenges. These all-too-common issues create a work environment that leads to high frustration levels and inefficiency.

  1. High cost of data entry - It’s a lengthy and tedious process to manually move and process large amounts of paper invoices, and it takes numerous staff hours to get the invoice information into your ERP/accounting system.  But, this is just the tip of the iceberg when it comes to A/P challenges that increase the cost of data entry.
  2. Data accuracy issues - We’ve all heard the adage, “To err is human.” While it’s comforting to know that we all make mistakes, they can be costly when made during any step of the A/P process. Correcting data later in the process can cost your business three to five times more than getting it right at the beginning of the process.
  3. Late payment fees - Checks don’t always get out on time due to delayed approvals, inaccurate information, and a number of other reasons. Unfortunately, when that happens, it can come with a penalty.
  4. Disjointed invoice approval process - When you have a more complex approval process with multiple locations, multiple approvers, or even complex approval rules, obtaining approval for each invoice can be time-consuming and invoices can easily get lost in the approval process. A decentralized system leads to errors and delays.
  5. Losing focus on the real job- As we mentioned before, the data entry process is lengthy and tedious, distracting A/P staff from their real job – making sure that payments are accurate and timely, disputing invalid charges, managing cash flow, etc. Adding headcount isn’t always a viable solution, so core A/P functions may suffer.
  6. Difficult audits and no real-time reporting - Paper documents are easily misplaced, lost or damaged, thus creating problems during audits. Processing paper invoices often creates significant delays in reporting visibility to current payable balances and to where they are in the approval process.

The A/P SolutionAvoid These A/P Challenges

Process optimization, combined with strategic use of automation technology, can provide a solution to your A/P woes. Coupling automation in the A/P process with scalable technology solutions allows a centralized system to easily and accurately complete these A/P processes, eliminate costs, and free up personnel to focus on other key areas of the business. There’s no more need to struggle with common obstacles that are preventing your business from becoming efficient and scalable.

To learn more about how automation can help your business overcome the most common A/P Challenges, visit Advanced Data Spectrum’s website or download our free white paper .