Illinois Chicago Chapter

Ideas to Streamline and

Improve your Accounts
Payable Process

Mike Narducci – President

NEXTEP Technology Solutions
www.NEXTEP.us
About Nextep Technology Solutions

• SAP Consulting Company specializing in recommending

the best third party products for all areas of SAP

• SAP Recruiting and Staff Augmentation

• Headquartered in St. Louis Missouri, Serving North

America and the World through our partners.

• Focus is on enhancing the SAP Experience while

improving the Total Cost of Ownership

• www.NEXTEP.us
About NeXtep Technology Solutions
Learning Points

• Look at the typical Accounts Payable process

• Examine the “Top 10” Reasons why time is wasted,

according to Gartner Group

• Simple and straight-forward methods to improve your

Accounts Payable processes

• Look at today’s technologies that can dramatically reduce

the time and costs associated with the Accounts Payable
Invoice processing

• Fits into every company’s Compliance strategy

Return on Investment

Save Time and Money !

• Process documents, faster, with significantly less costs and greater

control

• The process improvements and technologies discussed have proven in

project after project to have a dramatic Return On Investment.

“A process that previously took 8-10 hours to do in a manual,

paper-based process now takes us only a few minutes. Based on
our labor costs, the Solution is expected to save us several
hundreds of thousands of dollars annually.”
Ms. Bonnie Miller, CIO, Ramsey, Krug, Farrell & Lensing, Inc.
A/P is Prime for Process Improvement
9 Typically a Time consuming, Labor intensive process
9 Out-of-site, out-of-mind
9 Not glitzy but vital to the Business
9 Only visible when it’s not working
9 De-centralized processes may lack controls
9 Fear of change
9 A huge Cost Center for most organizations
9 The greater the Invoice volume the greater the ROI
9 In the past, technologies were not available at a reasonable cost
and were difficult to implement – Not any more.
The Typical A/P Process

•Manual key-entry – Labor intensive

•Paper-based process
•High Volume
•Every vendor’s document looks different
•Complex/lengthy approval process
•Difficult to manage
Top 10 reasons why time is wasted
1. Documents are hard to find
2. Document content is hard to manipulate and reuse
3. Documents are hard to update
4. Documents are hard to share
5. Document content is hard to publish consistently
6. Document creation is an ad hoc process
7. Document review is an ad hoc process
8. Importance of document content is not obvious
9. Paper-based distribution and storage is costly
10. Paper-based archiving is expensive and inefficient for
retrieval

Source: Gartner Group

Business Documents - The problem
The Current
Situation is
the most
expensive
HIGH COST
Storage room, TIME
Office Material, Furniture, Labor Intensive Retrieval,
Cost of copier/printer One check-out per time

MISPLACED
Lost Documents,
Labor Intensive Storage,
Slow Retrieval
Ways to Improve your A/P Process
9 Integrate procurement card payments seamlessly with SAP Purchase
Orders
9 Make your vendors pay themselves
9 EDI
9 Have your vendors e-mail invoices and use technology to post
9 Utilize bolt-ons to make transactional work easier
9 Implement an Invoice Imaging, Information Capture & Workflow
solution
9 Enable shared services and/or global sourcing of part of your back-
office A/P processes
Ways to Improve your A/P Process
Integrate procurement card payments seamlessly with SAP Purchase
Orders

9 Now we can truly integrate procurement cards with SAP Purchase

Order functionality.
9 No checks are cut creating greater cost savings.
9 Typically no invoices are needed, pay directly as items post to card.
9 Fully leverage total spend for each vendor whether as a p-card
purchase or as part of a P.O.
XiBuy – High Level Flow

Begins with your Adds payment card Import detailed Extends native SAP Flexible reporting
SAP System profile structure transaction data controls & workflows provides visibility
Ways to Improve your A/P Process
Make your vendors pay themselves

9 Vendor input invoices through your portal most likely

9 It can be very costly to implement
9 Security is an issue
9 Vendor buy-in is a huge issue
9 You can lose control of the process
9 Ultimately, a possible solution for just some of your vendors
Ways to Improve your A/P Process
EDI

9 Need support staff and continuous monitoring

9 Especially useful when it’s critical to maximize float
9 Useful for a small number of high volume vendors
Ways to Improve your A/P Process
Have your vendors e-mail invoices and use technology to Post

9 High volume vendors e-mail invoices from static addresses

9 Invoice attachments are identified and optically read
9 Invoices are Posted into their A/P system
9 Same can be done using SAP and off-the-shelf bolt-ons for e-
document delivery and archiving
9 Another solution for high volume vendors, but easier to implement
and maintain.
Ways to Improve your A/P Process
Utilize bolt-ons to make transactional work easier

9 Input your FI invoices (FB60’s, etc.) into Excel spreadsheets and upload to
SAP (useful for other FI transactions & Budgets as well)
9 Speed the input process by 80%
9 If you use the leading spreadsheet uploader, all master data is verified prior
to upload, ensuring an error-free process
9 No-brainer for most organizations, inexpensive with a huge return on
investment
9 Implement in no time, with little or no training– it’s Excel
9 Highly recommended
Ways to Improve your A/P Process
Implement an Invoice Imaging, Information Capture & Workflow
solution
9 The Biggest Bang for the Buck !
9 The technology is real, straight-forward to implement and inexpensive
9 More modern SAP Archiving solutions are now available at costs much lower
than the old players
9 Handles every Invoice that comes in the door through a combination of
Layout and Content Classification and Data Extraction
9 Truly enables organizations to automate the A/P invoice process
9 Shift to ‘Information Capturing’ vs. just ‘Image Capturing’
9 Get a huge ROI now and further leverage for your SAP Archiving project that
you’ll need to do eventually anyway
9 Utilize throughout the organization, imaging opportunities are everywhere
9 Recommended for EVERY organization regardless of invoice volume
Ways to Improve your A/P Process
Enable shared services and/or global sourcing of part of your back-
office A/P processes

9 It’s a fact of life

9 If you can centralize and streamline you’re A/P process, you’ll be
able to source those processes efficiently for even greater savings
9 A/P invoice processing is a prime business process for global
sourcing
 The 3rd Party Imaging Decision Process
9 Who can not just “capture images” but can “capture information” for
even greater cost and time savings
9 Must be a fully SAP Certified Solution
9 Knowledge and Experience
9 Scalable Architecture
9 Performance and Throughput are key
9 Standard Product vs. Custom Integration Project
9 Fast User acceptance - Usability
9 Short implementation time to “Go Live”
9 Modular Product Line, Concurrent User License - Low Cost
9 Ease of Implementation
9 Simple Knowledge Transfer Methodology
9 Part-time Administration
9 Service and Support
 The ROI Benefits:
9 Security and administration of electronic documents represent up to 100%
savings in comparison to paper documents and microfiche
9 Reduced operating costs
9 Increased security for document retention
9 Efficient and complete audit trails
9 Improved filing according to regulatory and legal requirements
9 Improved efficiency from workflow processes
9 Up to 30% time savings for approval workflow based processes
9 Take advantage of Prompt Payment Terms
9 80% to 90% efficiency savings from Document Capture and automated
Classification and Data Extraction
9 Increased transaction volume per employee, 70 – 75%
9 Integration of documents into business processes = 20% increased
efficiency
9 Increased customer satisfaction resulting from faster customer inquiries
9 Shorter access times to business documents
9 80% time savings for document search and access
Differences in Solutions
Time

Enterprise Content Management (ECM)

Link Management

Content Management
Workflow

Portals
Groupware

Document
Management Classification
Systems

Data
Archiving

Complexity
Process Improvement Opportunities

Invoice

Purchase
Order

Delivery
Note

HR
Records

Paper &
Automatic “linking“ of paper &
Electronic electronic documents to existing SAP
Docs
transactions or Master Records
 Assigning Then Storing = “Late”

No change in business processes!

Conventional work with Paper Documents

Posting in SAP R/3 with collection of Barcode,
Scanning and Linking
Storing for Subsequent Entry = “Early”

ScanningÎÎSAP Inbox ÎÎElectronic Processing

WORKFLOW
Image Capturing vs. Information Capturing
80% of the labor cost in a DMS system are for indexing the documents

• We have to change from image capturing to information

capturing
• A new kind of software with more intellectual abilities
• Even for smaller volumes of documents
Digital Mailroom

Inbound Documents

Capture Scan

Layout-Classification
Classification
Forms Processing Content - Classification

Extraction ICR / OCR Freeform- Data Extraction

ECM, DMS, ERP WorkFlow DMS SAP

Digital Mailroom Solution
Digital Mailroom Electronic
Automatic
Classification
1 &
2 Extraction

Paper
3
Standard Scan Process Document Types

Invoice No Invoice date

Correspond Date
9001 15.06.2004
9002 Contract # Contract
15.06.2004
From: To:
Retrieval Process Date
Type:
Customer: Subject:
Vendor:
4 Contract
Type:
Renewal:

5
Exceptions
(Dealt w/ Manually)
The Digital Mailroom
Forms and Inbox Workflow
unstructured + Index-Data
Information
•Invoice •Invoice
No date
•9001 •15.06.200
“Invoice” •9002 •15.06.200

•date •employee

•13.04.20 •MAS
Classification “HR” •02.05.20 •RKK

•No •contract
•1002 •Paul Palm
•546732A •Pam Prue
“Legal Affairs”

“Sonstige”
The Digital Mailroom
Forms and Inbox Workflow
unstructured + Index Data
Information
•Invoice •Invoice
No date
•9001 •15.06.200
“Invoice” •9002 •15.06.200

•date •employee
Intelligent
Extraction •13.04.20 •MAS
“HR” •02.05.20 •RKK

•No •contract
•1002 •Paul Palm
•546732A •Pam Prue
“Legal Affairs”

Business
Businessrules
rulesfor
forinformation
informationdelivery
delivery
“Sonstige”
Complex Business Processes
 Streamlining the A/P Process
9 SAP Business Workflow
9 Increase Accounts Payable production
9 Reduce costs to run A/P department
9 Scanning of Inbound documents at earliest convenience
9 Identifying document type
9 Invoice with or without verification
9 Invoice with or without PO
9 Inbound purchase orders
9 Return receipt
9Signature on delivery note, etc.
9 Scanning into inbox of processing group
9 Workflow inbox
9 Highest Benefits in terms of cost cutting and streamlining of
business processes
Requirements and Needs Analysis Strategy
9 Assess and review current system status
9 Objectives and benefits:
9 Outline objectives for Imaging, Document Management
9 Outline major business drivers
9 Identify key benefits (reduce costs, increase productivity, etc.)
9 Involve users early in the process
9 Address IT Management/C-Level requirements and concerns
9 Analysis and review:
9 Perform Document Management / Imaging Analysis in various
departments (A/P, A/R, HR, Legal, etc)
9 Get expert validation of findings or perform analysis (depends on
internal knowledge)
9 Determine access methods (SAPGUI, non-SAP users, Web users)
9 Understand organizational Compliance requirements
Corporate Compliance
Gramm-Leach Bliley Act
SEC Rules
17a-3 & 17a-4
All records related to
securities transactions to be
maintained for 3 years
Health Insurance Portability
Accountability Act (HIPAA)
Right to carry insurance
between jobs; privacy
of patient
information
Sarbanes-Oxley
(GLBA) Fiscal accountability for all
Privacy of financial public companies
information
Basel II
Capital assessment and reporting
standards for global banking
Compliance
U.S. PATRIOT Act
Customer documentation
requirements in order to
NASD 3110 DoD 5015.2 “know your customer”
Written policies and and UK PRO
procedures for review of Federal standards
correspondence of records management
with the public
Scalable Architecture
Boston Paris

Scanner Scanner

Workstations Archive Workstations Archive

Data Center

Dallas New York Tokyo

Scanner Scanner

Workstations Archive Workstations Archive

Data Center

Ohio

• Hundreds of concurrent users across a # of branch offices

• High document volumes (Paper, word docs, e-mail, fax, etc) and docs are local
• Archiving, Retrieval, and also check in/out with versioning
• Fail-Over locations, data centers with global visibility
• Final worldwide implementation incl. Hundreds to Thousands of users in # of locations
• Integration into existing applications
Distributed Documents with Automatic Fail-Over

Boston New York Paris

Access
Doc Cluster Cluster Doc
Docs Server Broker Broker Server Docs

DB

Replication/
Fail-over

Dallas Tokyo
Docs DB

Docs Doc Cluster Cluster Doc Docs

Server Broker Broker Server
Ohio
Selecting a Scanner

• Single-sided
• Duplex
• Pages Per Minute rating
• Flat bed vs. Sheet Fed
• Paper Feed Capacity
• Paper size
• Color
• Reliability MTBF
• Serviceability
• Cost
Feed them (almost) Anything...

Number Company Code 1 Code 2 IO-number Country Number

-------------------------------------------------------------------------------------------------------
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698

123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698

123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
123456 KODAK NV 3456767 786767 888 98798 87-87878878-7698
Compliance Oriented Revision-Proof
Archival Storage

Standard Plug & Play Devices

Optical Storage Libraries 30 +/- GB

16X
9.1 GB

8X
4X 5.2 GB
2X 2.6 GB
1X
1.3 GB
.65 GB

'90 '92 '94 '96 '98 ’01 ’04

Very low Cost per Gigabyte

 Thank you !
Mike Narducci
President
Nextep Technology Solutions

mike@nextep.us
www.nextep.us
636.458.1107