Why don’t vendors of ERP or financials software include invoice automation as a native feature of their products? The task and procedure of getting invoices and information into an ERP system or financials software is a manual process in many organisations that creates additional headaches and costs that negatively impact the bottom line profitability.

There is a wide variety of different ERP applications for medium to large businesses. SAP, Oracle and Microsoft Dynamics lead the way but there are a vast number of alternative ERP platforms from vendors such as Epicor, IBS, Sage, QAD, NetSuite and TechnologyOne.

For SAP, Oracle & Microsoft there are a host of invoice automation offerings (see IDM's Invoice Processing Enterprise Guide  for a comprehensive list of solutions).

There are thousands of different invoice processing applications in the world, and many different workflow platforms to route the invoice once it has been scanned and captured or deal with a PDF or image attachment that arrives by email.

Despite a lot of claims for EDI overtaking paper invoicing in the 90s, the revolution has not been widely adopted.
Organisation such as Basware and Ariba (just acquired by SAP) are attempting to establish payment networks that link suppliers and customers to provide end to end purchasing and invoicing, but the vast majority of organisations treat their financial processes as islands.

SAP & OpenText

SAP has developed a close relationship with OpenText and offers OpenText Invoice Capture Center for SAP Solutions (ICC) as an option for SAP Invoice Management by OpenText.

Mark Frear, head of solution management, SAP ANZ reports that local success is gathering momentum since its introduction in early 2010.

“These joint solutions go through our internal testing and roadmap planning resulting in a best-in-class solution, where to the customer, there is no distinction between these solutions and core SAP products. The product is so well integrated that Invoice Management uses the native ERP configuration, security, user, role and workflow capabilities, and the OCR can be validated against all the important reference data to ensure maximum read rates, which in Australia is exceeding 95% accuracy for header data, driving huge efficiency gains.

“In our experience the resolution of errors arising from mismatches between ordering, invoice and goods receipt is where the most time is consumed. A system delivering the user an automatic notification informing them of what is actually incorrect, giving all the details on one screen (including the scanned image), allowing one click resolution in a familiar screen will deliver the best business productivity.

SAP has recognised that while automated interfaces and EDI have gone so far to alleviate data input it has had limited success where smaller trading partners were involved, as the cost of “on boarding” became prohibitive.“

Recently SAP acquired Crossgate’s cloud service which allows trading partners to submit, to a central hub, invoices in the manner most convenient to them (fax, email attachments, EDI, etc.) which are converted automatically to the EDI format for the recipient. The cloud service performs the on boarding process and provides the translation technology. This provides an inexpensive way to achieve EDI like commerce and can extend beyond invoices, to the whole cycle of purchase orders, advanced shipping notices, remittances etc. There are 30,000 companies connected into the Crossgate cloud hub.

“This eliminates paperwork and allows transparency e.g. around shipment and payment statuses,” said Frear.

”However EDI only deals with the “data capture.” Business rules around mismatches and missing/invalid data still need to be applied and “work flowed” around the organisation, and as such, SAP & OpenText’s solution supports ‘any channel’ input.”

“In reality the business process should be designed to capture some information, process the next task then add some further information. Thus the input of an invoice can be accelerated if the operator references to the Purchase Order and only makes changes to that based on what was actually invoiced. OCR will improve efficiency in this area but it is not the major area for business improvement – process visibility & governance is the key.” said Frear.

“In our experience the resolution of errors arising from mismatches between ordering, invoice and goods receipt is where the most time is consumed.

“A system delivering the user an automatic notification informing them of what is actually incorrect, giving all the details on one screen (including the scanned image), allowing one click resolution in a familiar screen will deliver the best business productivity,” he said

ReadSoft

Jeff Leibovici, Director of Sales - SAP at ReadSoft Oceania, said, “The core of any ERP package is supply chain, its finance, its HR and payroll, that’s the heart of their business. ERP vendors provide the basics if you will, and companies like ours extend the functionality of the core offerings. “

ReadSoft offer a scan, match and workflow solution for P2P automation that is highly specialised for SAP and Oracle ERP.
There are more than 30 SAP sites in Australia and New Zealand that have adopted ReadSoft solutions for AP automation, including  Rio Tinto, Orica, Fortescue Metals, Incitec Pivot, Caltex, Goodman Fielder, Coca Cola, NSW Police, NSW Roads & Traffic Authority, Monash University. Service First, NSW BusinessLink.

ReadSoft also powers AP automation at a number of Oracle sites include Queensland University of Technology (QUT), Boral and Leighton .

Automated Invoice Processing is offered as an optional line item for Oracle’s next generation Fusion Applications. There is one organisation in the region based in Singapore which is currently implementing Fusion Financials.

Oracle says it intends to offer the same internal AP automation capacity for its Oracle E-Business Suite, PeopleSoft, Siebel and JD Edwards software but has not indicated when it expects this will be available. Most organisations will turn to a third party systems integrator or solutions providers to provide them with the ability to extract information from paper or PDF invoices and interface to their financials/ERP.

Lee Fisher, Chief Executive Officer of solutions provider Efficiency Leaders, said, “Whilst organisations are becoming increasingly aware of the burden of manual processing of documents, it is always going to be challenging for ERP/finance system vendors to provide the level of personalised automation intelligence to answer the very specific business rules/processes of each end user customer.

“The level of research and development that has evolved over many decades is a discipline in its own right and while, on the surface, it may seem attractive for some ERP vendors to incorporate capture into their offering, capture alone is only a small piece of the puzzle.  I believe that organisations are looking for enterprise ready technologies that can address all business unit concerns, within the one processing platform.

“Implementing capture at the front end is a critical step to answering all information processing procedures. However, the benefit of partnering with a specialist integrator, like Efficiency Leaders, is the unique specialist knowledge and experience within our team that can turn creative innovation into meaningful business logic, eliminate the data entry effort and minimise human validation/rework, not just for the Accounts Payable function but across the entire enterprise.” 

“Far too often we see organisations crying out for help because they have two, three, four or more silo systems in place to answer different business unit issues. 

“It’s inevitable that the majority of organisations have more than one back end system and therefore the significant effort and costs associated with any capture solution provided by each vendor of back end systems would be duplicated, leading to inefficiencies and ROI concerns.

International Business Systems (IBS), a global integrated ERP and supply chain provider with a customer base in Australia, has recently dropped development of its own Accounts Payable Workflow platform, instead choosing to partner with Medius to offer its workflow tools to IBS enterprise customers.

Lars Mellergaard, Managing director of Australian Mediusflow reseller Sigel said the business challenge of AP automation was not a main priority for ERP vendors.

"They have other priorities such as improving functionality to lower inventories, management of storage and workforce efficiency in the warehouse, lean manufacturing, order management, electronic trading, etc."