Paperless Factory: Invoice Processing Digitalization

  • Paperless Factory: Invoice Processing Digitalization

    By Shantanu Paknikar

Overview

Terms like “Paperless office”, “Paperless factory”, “Digitized Office” have been around for a long time, as an aspiration for the future. And yet, even today, the ground reality is that there are a lot of paper documents that are still in existence. Purchase Orders, Invoices, Shipping Notes, Goods received notes, Proof of delivery notes, and several other documents are still generated, received, and processed in large numbers in companies all over the world. Processes to handle paper documents are largely manual, time and effort consuming, prone to errors, require data re-entry at multiple stages, and result in operational inefficiencies. The need of the hour is to leverage technology to digitize such documents and automate the processes to handle them.

Example use case: Accounts Payable (AP)

Consider a typical use case for Accounts Payable (AP) and the Procure to Pay process at a factory that receives shipments from its suppliers. Trucks arrive at the factory gate with an invoice for the goods they are delivering, along with associated documents such as a shipment note and sometimes the purchase order (PO) corresponding to that shipment. Let us look at how the documents are typically handled.
The invoice and associated documents are in the form of a hard copies (physical paper copies). At the factory gate, this physical invoice is manually inspected, and tallied with the ERP system data. Once done, the gate clearance is recorded (manually again) on the physical invoice, or printed out as another physical document to attach to the received invoice. The invoice is then passed on for further processing.

The further processing might involve invoice being sent to a verifications team, where the received shipment is checked for quality. Once done, the ERP system is updated (manually) indicating that the shipment received has cleared the quality check. The quality clearance might then get recorded manually on the physical invoice document, or a QC certificate might get printed out and attached with the invoice.

The invoice (and the received goods) are then sent to the stores section where there is a quantity verification (counting) process. This involves matching of the ordered quantity of goods from the original PO in the ERP system, with the quantity in the invoice, with the actual quantity received. The matching requires a visual inspection and a manual comparison of the PO and Invoice for quantity as well as other details.
Once the matching is completed, the goods are accepted at the store, the ERP system is updated (manually), a Goods Received Note (GRN) is printed out and handed over to the supplier's delivery associate, and the physical invoice is sent to the accounts team for the payment approval.

Business Challenges

The limitations of this process are obvious. It is inefficient to have the paper invoice (and other documents) being sent across from one department to another. There is quite a bit of work on data entry and re-entry including updates to the ERP system, which could also result in data errors. Also, with a paper-based process, search and retrieval of documents later (e.g. during audits) is a very painful process since the actual physical documents are not easy to find. These inefficiencies impact both the cycle time as well as productivity of the factory personnel involved in receiving and processing shipments.

The solution: Invoice Processing Digitalization

These inefficiencies can be addressed by a technology solution that involves converting the paper-based manual process into a digital, automated process. Such a solution involves two main steps:

  1. Digitization of the physical invoice
    This involves the following

    • Scanning of the invoice and converting into digital (e.g. PDF) form
    • Optical Character Recognition (OCR) to extract specific data fields and values from the document
    • Generating and adding “tags” or “meta-data” to the digital document, to help describe the document and to help for later search and retrieval
    • Storing the digital documents in a document repository or document management system (DMS), to be accessed when needed
  2. Intelligent automation

    Just converting the documents to digital form and storing them is not good enough. The next step is to have a process automation/workflow engine that can orchestrate the document workflow via a process application. The process application will handle approvals, automatic forwarding of the document to the right stakeholder, automated alerts and notifications, and integration with any back-end systems that might be needed. Process applications can be made “smarter” or “intelligent” through technologies such as artificial intelligence (AI) and machine learning (ML). The use of AI to complement automation is in fact what has given rise to the term “Intelligent Automation”.

Benefits

Invoice processing digitalization offers some obvious benefits. The scanning and conversion of the document to PDF form can be done at the gate itself, after which the physical documents can be sent for filing immediately, eliminating the risk of the physical document getting lost or damaged. Search and retrieval can now be done on the digital documents, reducing the time required from a few hours to a few seconds. With intelligent automation, manual data entry or re-entry can be automated fully or partially, reducing the chances of data entry errors. Overall, digitalization offers direct improvements in operational efficiencies with invoice processing cycle time reduction, reduced costs, and improved staff productivity.

Summary

While this article covers the AP area and a portion of the Procure to Pay process, digitalization equally applies to other areas such as Accounts Receivable (AR) and Order to cash processes. These processes are a part of any organization and digitalization of such processes goes a long way towards achieving the vision of the “digitized office” or “paperless factory”. This is of course, provided that companies are willing to invest in digital technologies such as intelligent automation. A lot of companies have already implemented such solutions, or are in the middle of doing so. Where does your company stand?

Footnote: Tangentia’s Invoice Digitalization Solution is designed to help you address the challenges related to handling physical invoices and related documents. Leveraging the power of Robotics Process Automation (RPA), Artificial Intelligence (AI) and Workflow / BPM technologies, the solution delivers all the benefits of digitalization including reduced invoice processing cycle times, reduced invoice processing costs, elimination of data entry errors, improved staff productivity, significantly reduced time and efforts for document search and retrieval and zero risk of documents getting damaged or misplaced during processing. The solution is a part of our Digitalized Office / Paperless Office offering, which includes automation solutions for Procure-to-Pay as well as Order-to-Cash processes.

Please contact us for a complimentary, no-obligation demo and a free consultation with one of our experts.

Write in to automation@tangentia.com today!

LEARN MORE

Get Started today

Interested in Automation but don’t know where to start? Looking for a reliable Automation reseller with the best possible pricing? Looking for somebody to help maintain, support and enhance your existing bots? Or just want to say hello? Contact us now. We promise a human will answer your query, not a bot.
Contact Us

How to Pick an EDI Service Provider … Do they have a Karen?

  • How to Pick an EDI Service Provider
    Do they have a Karen?

I have worked next to one of the hardest working, most knowledgeable and talented EDI sales and support people in the business for over two years. Her name is Karen and she has been working with Tangentia for close to 5 years. She arrives early and stays late. She has the best attitude and is always willing to put in a little extra effort. In every case, it’s not just a little extra effort but a lot of extra effort. That’s what you want when choosing an EDI provider.
Sitting next to Karen, I am always amazed at how she manages to get so much done. She is always working. She works so hard she literally has to be reminded to go have lunch. There is no one person that I have ever worked with that has impressed me more. Any company would be lucky to have a Karen.
When selecting an EDI provider, most things are the same. The prices are similar. The services are similar. Every vendor wants your business, and you as a client are looking for a secure, scalable solution that just works. If you are thinking about switching EDI service providers, you have your pick. But the question you have to ask yourself is, do they have a Karen?
Without a doubt, Karen leads our customer service team on all accounts. Listening to her laugh, I would say she is probably the happiest person in the world. Customers love her, her colleagues love her, and I’m confident you will, too.
I was asked to write an article to help us sell our EDI services. When I thought long and hard about why I would choose Tangentia for EDI, sure the technology is world-class and setup is easy. You’ll definitely save money and the system is also super user-friendly. But besides that, the real reason I would choose Tangentia is because I know that if I did need support, I could call Karen and she would not only solve my problem, but also put a smile on my face and make my day. This I can guarantee.
So if you are new to EDI and considering your options, or if you are looking for alternatives to your current EDI provider, the question you should ask any vendor is “Do you have a Karen?” Chances are they don’t, because there is nobody like Karen. We are lucky to have her on our team, and you will be, too, when you decide to choose Tangentia as your EDI service provider.
To work with Karen directly and have her setup your company on EDI, just send her an email with your contact details to:
kbriones@tangentia.com
She will promptly call you back and will be so happy it will make you smile.
Thank you, Karen, for all that you do.
We love you.

PS: A note from Karen…
Thank you so much for your kind words. Never did I imagine that I can be blogged about in this lifetime. Your blog submission truly made my day – should I mention it made me tear up a bit? Hehe.
As for the blog requirement, since this could be published on our official blog site, my edit suggestion would be to emphasize the characteristics that all of us at Tangentia share as a team, rather than as individuals. It would be a great opportunity to highlight the things that set our team apart from our competitors which are: our team’s consistent hard work, positive attitude, and going the extra mile to help our customers overcome their challenges.

PPS: As you can see, even when Karen is recognized for her efforts, she goes out of her way to share the credit with the entire team. That’s a real team player.

1-877-TANG-BIZ

sales@tangentia.com

Stories from the last 15 years – Do you want to keep driving trucks or change the world?

  • Stories from the last 15 years – Do you want to keep driving trucks or change the world?

Ask most people in Toronto about what they remember about 2003, and many might remember the crippling power outage that shut down most of the North East in August of that year. For me personally, it was the start of Tangentia towards the end of 2003.

I always wanted to start something of my own but the catalyst was when the French company I worked for at that time sold their operations in Canada sans me ( yes I was literally the only employee left in Canada). I decided that if I was going to have to build a business from scratch, might as well do it as an entrepreneur rather than an employee. Throwing caution to the wind, I looked around and found Mohan who was somebody I hired as a java programmer at a previous job in Montreal and who had also moved to Toronto.

Mohan, believe it or not, had got himself a truck driving license and was driving refrigerated containers to Chicago from Toronto! Having been to business school and having read Steve Jobs do the “do you want to sell sugared water all your life” to John Sculley, I asked Mohan “Do you want to drive trucks all your life or change the world” and he agreed to help me during the week and drive his trucks over the weekend. So now I had a programmer and I took on all the remaining positions in the company.

We got our first project which was for a customer in Montreal that wanted us to install an AS2 software on an AS400 and integrate it with their JD Edwards ERP system and they wanted it done ASAP. With no projects in hand, we had to think fast. We asked them if they had their maintenance agreement with IBM up to speed and they said yes. Far from installing software on it, neither Mohan nor I had ever seen an AS400 server but I felt that if somebody could do it then we should be able to do it as well.

It was already past noon in Toronto and the customer wanted the install done the next day in Montreal and we did not budget any travel costs. So this is what we did: Mohan got a rental car and he drove to Montreal – I got hold of IBM support and conferenced Mohan as he drove to Montreal, and we figured out that the AS400 libraries were different from a windows directory etc. However, with Mohan’s strong UNIX background, we were able, over the next 5 hours that it took him to drive to Montreal, to understand what had to be done.

Mohan stayed with his uncle as we obviously had not budgeted a hotel and walked into the customer’s office the next morning. We had a few minor hiccups but before the end of the day the software was installed and the customer who was a large apparel manufacturer was transacting EDI purchase orders and invoices seamlessly with Walmart via AS2. I spoke to the customer a couple of years later and everything was still working as we had installed it!!

We got lucky, as in 2003 Walmart was mandating all their vendors to move their EDI from the VAN ( Value Added Network) to AS2 and we got very busy doing these small migration projects all over North America. This is the origins of the Tangentia EDI & Ecommerce group that 15 years later has 1000+ customers globally including many Fortune 500 companies that outsource their entire B2B Infrastructure and Order Management to us.

Somebody wise once said – the harder you work the luckier you get.

1-877-TANG-BIZ
sales@tangentia.com

Wallgreens is phasing out SupplierNet

  • World leading, proven EDI & B2B integration solutionsTangentia EDI

Wallgreens is phasing out SupplierNet

Walgreens announced in their March newsletter that they are rolling out their SAP implementation to the Distribution Center (DC) level, and will be retiring SupplierNet EDI portal beginning April 2018.  What this means is that all Walgreens vendors are required to use EDI to exchange electronic business data with Walgreens.Walgreens, along with other major retailers worldwide including Walmart, Costco and Hudson’s Bay, utilize EDI to manage a massive amount of business data that they exchange with their suppliers and trading partners. In a typical setting, suppliers who wish to do business with these major retailers are being required to become EDI-compliant to enable them to receive electronic purchase orders and send electronic shipment notices and invoices.

Tangentia’s Tangentia Gateway solution is a web-based EDI solution offering that has EDI connectivity with more than 2000+ trading partner worldwide, making it one door for many opportunities to quickly start doing business with some of the world’s largest retailers. It enables SMB and large enterprise companies to be fully EDI compliant with their trading partners’ requirements at a fraction of time and cost. Tangentia Gateway is hosted and managed on our cloud, running 24×7, and ensuring that all transactions are seamlessly received end-to-end. Tangentia’s award-winning security cloud infrastructure, built in partnership with IBM’s cloud services offers cost-effective enterprise EDI. EDI has never been more secure, more reliable, and consistent in delivering your important transactions.

Tangentia Gateway also helps organizations successfully integrate their EDI data with their ERP/WMS system. We have the experience and flexibility to custom integrate with various ERP/Accounting systems such as NetSuite, Microsoft Dynamics NAV, SAGE 300 (formerly Accpac), SAGE 100 (formerly Business Vision), Sage 50 (formerly Simply Accounting), Quickbooks, SAP B1, SAP R/3, SYSPRO, Oracle, AX (Axapta), GP(Great Plains), Acomba, JD Edwards and many others seamlessly. Furthermore, Tangentia Gateway also seamlessly integrates with eCommerce platforms such as Shopify, Magento, and WooComnmerce, which eliminates the need to manually key in data that are coming in from your eCommerce sales channels into your ERP / Accounting system which improves efficiency and faster fulfillment.Once your EDI data is integrated with your accounting system, any change in EDI specifications by one of the trading partners will no longer mean a change in your accounting system. Tangentia Gateway automatically validates product info, shipping data, and internal pricing rules, creating cross-references where necessary,  to maintain the integrity of suppliers’ accounting systems and databases.Do reach out to us today to establish your EDI connectivity with Walgreens and more.

1-877-TANG-BIZ

sales@tangentia.com