Financial Operations Will Never Be Paperless - But They Can Be More Effective

For decades, financial operations executives and strategists have been cognisant of “the paperless office,” the dream that someday vital business documents—invoices, remittances, orders, claims, health records, legal documents, HR documents and others—will be processed and stored without need for paper, instantly transferrable as electronic data at a moment’s thought. Yet despite ground- breaking technologies that have changed our businesses in a manner that renders them extraordinarily different from what they once were, global enterprise finds itself using more paper than ever before. Notwithstanding the best intentions of software developers devoting untold billions to its creation, the “paperless office” remains as much a myth as it ever was.

If your suppliers, customers, partners, employees and others continue to bury your front and back offices in paper, the key to creating efficiency lies not in tediously converting these documents to electronic media, but by leveraging new technologies to better play the hand (paper) you’ve been dealt.Yes, you can save a great deal of paper through e-invoicing or EDI technology, but good luck converting your vendor master file to 100% e-invoicing/EDI when it consists of thousands upon thousands of unique suppliers. E-invoicing provides a possible solution—even a desirable one—for handling the small number of vendors with whom you conduct the bulk of your business, but that “long tail” of suppliers will remain the source of considerable burden to your resources.

Without some form of automation, the only way to scale for processing greater document volumes is to add headcount. As the business expands and acquires new units, the expense of handling paper increases. Want to capture every early payment discount? The additional labour will consume the savings. Want to reconcile all incoming remittances before the payment deadline, to ensure no disruptions to services (and therefore angry customers)? That’ll cost you. Are your paper documents falling through the cracks? According to the Aberdeen Group, it’ll cost you €165 to replace each of those. The International Office Management Association estimated that 1.6% of all payments areerroneous—adding up to a considerable sum for a multi-billion-dollar operation, not to mention the experience of vendor frustration and complications.

According to a recent survey of accounts payable professionals conducted by the Institute of Financial Operations, businesses globally—especially the largest (Global 2000) enterprises—are coming to embrace intelligent data capture technology as a driver for creating the speed, efficiency and control that has largely eluded financial operations since “paperless office” first became a buzzword. More than 80% of respondents to this survey reported that automation with this technology has decreased their process cycle times. Nearly 60% reported lower error rates. A plurality of respondents who have implemented intelligent data capture reported that the foremost benefit they’ve observed was greater visibility and reporting throughout the process, which translates to greater compliance, an ability to quickly respond to vendor inquiries and a stronger capability for managers to make informed, strategic financial decisions.

World-class productivity can be achieved when large businesses stop chasing the “paperless office” and start using intelligent data capture technology to manage what paper they do have. After implementing such an application, a global media conglomerate was empowered to immediately shift 80% of its accounts payable personnel away from manual data entry and towards more strategic, forward-looking functions within the organization. A shipping company was able to boost its remittance processing productivity by up to 500%, eliminating its weekend backlogs while maintaining the same accounts receivable data entry headcount as a €1.1 billion operation that it had as a €150 million operation. A manufacturer processes 2.5 million invoices annually, issued by 100,000 unique vendors, using only four data entry personnel. An energy provider sorts incoming mailroom (including email, fax, and other media) parcels into 1,000 unique document classes, and leverages the technology to create a completely transparent ECM, providing immediate access to necessary business intelligence from mailroom to boardroom. Countless healthcare providers are spending less time and money on paying the bills, and devoting more of its resources to research and patient care.

While the “paperless office” may remain a pie in the sky, technology exists today that delivers on the promise of efficiency, transparency and productivity unreachable through manual processes alone. Intelligent data capture offers executives the opportunity to streamline financial operations while making them more accurate and accountable, transforming resources spent shuffling paper into resources planning for the future and supporting the company’s core objectives.