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 todays technologies that can dramatically reduce
the time and costs associated with the Accounts Payable
Invoice processing
Fits into every companys 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 its 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 vendors 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,
Office Material, Furniture,
Cost of copier/printer

TIME
Labor Intensive Retrieval,
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 backoffice 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

SAP System

Adds payment card

profile structure

Import detailed
transaction data

Extends native SAP

controls & workflows

Flexible reporting
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 its 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 edocument 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 (FB60s, 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 its 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
9
9
9
9
9
9

than the old players

Handles every Invoice that comes in the door through a combination of
Layout and Content Classification and Data Extraction
Truly enables organizations to automate the A/P invoice process
Shift to Information Capturing vs. just Image Capturing
Get a huge ROI now and further leverage for your SAP Archiving project that
youll need to do eventually anyway
Utilize throughout the organization, imaging opportunities are everywhere
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 backoffice A/P processes

9 Its a fact of life

9 If you can centralize and streamline youre A/P process, youll 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
Systems

Classification

Data
Archiving

Complexity

Process Improvement Opportunities

Invoice
Purchase
Order
Delivery
Note
HR
Records
Paper &
Electronic
Docs

Automatic linking of paper &

electronic documents to existing SAP
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

ScanningSAP Inbox Electronic 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
Scan

Capture

Layout-Classification
Classification

Extraction

ECM, DMS, ERP

Forms Processing

Content - Classification

ICR / OCR

Freeform- Data Extraction

WorkFlow

DMS

SAP

Digital Mailroom Solution

Digital Mailroom

Electronic

Automatic
Classification
&
Extraction

2
3

Paper
Standard Scan Process

Document Types
Invoice No

Retrieval Process

Invoice date

Correspond Date
9001
15.06.2004
Contract
#
Contract
9002
15.06.2004
From:
To:
Date
Type:
Customer: Subject:
Vendor:
Contract
Type:

Renewal:

5
Exceptions
(Dealt w/ Manually)

The Digital Mailroom

Forms and
unstructured
Information

Inbox

Invoice

Workflow
+ Index-Data
Invoice
No
9001
9002
date

Classification

HR

Legal Affairs

Sonstige

Invoice
date
15.06.200
15.06.200
employee

13.04.20 MAS
02.05.20 RKK
No
contract
1002
Paul Palm
546732A Pam Prue

The Digital Mailroom

Forms and
unstructured
Information

Inbox

Workflow
+ Index Data
Invoice
No
9001
9002

Invoice

Intelligent
Extraction
HR

Legal Affairs

date

employee

13.04.20 MAS
02.05.20 RKK
No
contract
1002
Paul Palm
546732A Pam Prue

Business
Businessrules
rulesfor
forinformation
informationdelivery
delivery
Sonstige

Invoice
date
15.06.200
15.06.200

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

9
9

departments (A/P, A/R, HR, Legal, etc)

9 Get expert validation of findings or perform analysis (depends on
internal knowledge)
Determine access methods (SAPGUI, non-SAP users, Web users)
Understand organizational Compliance requirements

Corporate Compliance

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

Gramm-Leach Bliley Act

(GLBA)
Privacy of financial
information

Sarbanes-Oxley
Fiscal accountability for all
public companies

Compliance

NASD 3110
Written policies and
procedures for review of
correspondence
with the public

Basel II
Capital assessment and reporting
standards for global banking
U.S. PATRIOT Act
Customer documentation
requirements in order to
know your customer

DoD 5015.2
and UK PRO
Federal standards
of records management

Scalable Architecture
Boston

Paris

Scanner

Workstations

Scanner
Archive

Workstations

Data Center

Dallas

New York

Tokyo

Scanner

Workstations

Archive

Scanner
Archive
Data Center

Workstations

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

Archive

Distributed Documents with Automatic Fail-Over

Paris

New York

Boston
Access
Docs

Doc
Server

Cluster
Broker

Cluster
Broker

Doc
Server Docs

DB

Replication/
Fail-over

Tokyo

Dallas
Docs

Docs

Doc
Cluster
Server Broker

DB

Cluster
Broker

Ohio

Doc
Docs
Server

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
123456
123456
123456
123456
123456
123456

KODAK NV
KODAK NV
KODAK NV
KODAK NV
KODAK NV
KODAK NV
KODAK NV

3456767
3456767
3456767
3456767
3456767
3456767
3456767

786767
786767
786767
786767
786767
786767
786767

888 98798
888 98798
888 98798
888 98798
888 98798
888 98798
888 98798

87-87878878-7698
87-87878878-7698
87-87878878-7698
87-87878878-7698
87-87878878-7698
87-87878878-7698
87-87878878-7698

Compliance Oriented Revision-Proof

Archival Storage

Standard Plug & Play Devices

Optical Storage Libraries

30 +/- GB

16X
9.1 GB

4X
1X
.65 GB

'90

'92

2X

8X
5.2 GB

2.6 GB

1.3 GB

'94

'96

'98

Very low Cost per Gigabyte

01

04

Thank you !
Mike Narducci
President
Nextep Technology Solutions
mike@nextep.us
www.nextep.us
636.458.1107