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Microsoft Dynamics Users: How to quintuple your AP invoice processing power & why you should do it.

Updated: Feb 11, 2019

Imagine being able to process 5 times the number of invoices you’re currently processing with the same – or fewer – people, all-the-while reducing human errors. Forward-thinking Dynamics users, especially in transaction-heavy industries, are doing that today.

Let’s look at how this works. There are two primary factors that will drive your ability to process more invoices more efficiently. The first factor is how you get the invoice captured and its data entered into your ERP system. The second is how you route that invoice for approval once it’s in the system.

Document capture No matter much you’d love to control the format in which invoices are sent to your company, the reality is that invoices arrive at businesses in paper form as well as in many different electronic formats (PDF, spreadsheet, etc.) and via many different delivery methods - by email, by fax, by regular mail. The first step to increase processing efficiency is to be able quickly and easily get the data from the invoice into your Dynamics database. The fastest and easiest way to do this for paper-based invoices is by use of a dedicated scanner or digital copier. But don’t forget about the other formats, most notably invoices received via email. If you can’t drag and drop these into your system or have them automatically inducted, you’ll miss a large (and growing) volume of invoices.

Once you’ve got all of your inbound formats addressed, you’re off to a good start. In fact, Paystream Advisors calls this Level 1 on the road to AP automation. Automated Data Capture with OCR . The next step toward increasing AP processing power includes the ability to key from image (keying data from the document image instead of a physical copy of the document) and the addition of automated data capture using technologies such as Optical Character Recognition (OCR).

OCR functionality actually extracts the data from a scanned (or emailed) invoice and performs rules-based analysis of the data, much like a person would, only much more efficiently—and with far less need for error corrections. When errors and other exceptions do occur, your AP automation system will have to handle these smoothly (i.e., without canceling out all of the other efficiencies AP automation enables). Common exception handling scenarios include:

  1. Duplicate checking.

  2. PO match exceptions like unit of measure variance, over receiving, under receiving, unit price variance.

  3. Open PO lookups for cases when the PO number is not on the invoice but the OCR system recognizes the vendor.

Getting invoices into your system more quickly with improved accuracy and flagged exceptions is all well and good, but how you handle the volume after that makes a big difference in processing power. In many ways, efficiency of invoice processing can be gauged by the number of “touches” an invoice requires. Higher end document management solutions for Dynamics include automated features to allow what some call “touchless” AP processing.

Here’s one example of how this could work.

Incoming invoices – whether received by email or web upload, or as paper via postal mail – are inducted into the system and routed automatically into a workflow queue to be processed by the OCR engine. The OCR engine extracts the header and line item data from the invoice and, if necessary, displays the data to the data entry clerk for verification. The data entry clerk confirms that the data has been extracted correctly from the invoice. To accelerate this process, more sophisticated OCR solutions will apply a configurable set of business rules and flag any exceptions. To the extent the exceptions involve insufficient recognition of the data on the invoice, the system should focus the data entry clerk’s view on those specific characters that the OCR engine may not have recognized sufficiently. Once the data is verified, the OCR engine automatically creates the record in Dynamics and uploads the header and line item data into the record where additional business rules can be applied and other users can route and approve the invoices.

Why you should care whether or not you process a massive volume of invoices, increasing your invoice processing power has a number of benefits. Make better use of your employees. Few people aspire to be data entry clerks and most have more to offer your company. By increasing the efficiency of invoice processing you create time for these folks to do more valuable work. Absorb rapidly increasing volumes.

Let’s say your company is experiencing explosive growth and/or you acquire another company. Suddenly AP volumes go through the roof. With invoice processing under control, you can easily scale to accommodate the additional transactional volume. Minimize data entry errors. With the OCR and workflow automation features I mentioned before, data entry errors almost become a thing of the past. Improve supplier relations.

By being able to accept and process invoices in virtually any format, you’ll become a better supply chain partner and make it easier for your company to do business globally. Avoid hiring five new people. Finding, hiring and training new data entry clerks is time consuming, distracting and surprisingly expensive. With the ability to process 5 times more invoices with the same number of people, you won’t have to worry about that for a while. Find what you need fast. If you’ve ever spent hours searching for an invoice or its supporting documentation– and that’s almost de rigueur inside AP departments – you’ll certainly appreciate the ability to get what you need with a single keystroke. What to do next If you’re interested in seeing a demonstration of how such an add-on works with Dynamics, here’s a great video to watch: Touchless AP Processing


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