Building a Document Management Plan

By: Ray Griffiths

Accounts Payable Entry Level

As organizations look to drive down costs and improve efficiency, manual and time-consuming processes in accounts payable (A/P) are an ideal place to start. A/P processes are sometimes distributed in nature, may require approval on many levels, and generate huge volumes of paper and electronic documents that are difficult to effectively manage. Document imaging systems enables companies to achieve process efficiencies and cost savings in three key areas:

* Capture, storage and retrieval of data and documents
* Automation of critical business processes to drive efficiency
* Sharing of information and extension of processes to internal and external resourcesI

Integration with ERP and LOB applications allows companies to seamlessly enable a single interface to all payables transaction content, and extend automated processes into these applications. Integration will significantly improve response times, eliminate time-consuming duplicate data entry, reduce errors, increase processing efficiencies and enhance levels of service.

Implementing document management/imaging technology helps managers and employees identify, classify, track and manage all forms of A/P information, from inception through the end of the content lifecycle. The technology manages all types of corporate records, regardless of whether the record is in the form of a physical document, an email with attachments, or an electronic spreadsheet. The solution allows users to establish retention periods, organize and retain these documents and other assets for legally required amounts of time, and provide quick, on demand access to them.

As was stated in Part I of this series, a document imaging system in accounts payable will have good ROI if some or all of these conditions exist:

1. There are 5 or more payables clerks
2. They are manually matching checks
3. Invoices have to be approved after they are received.
4. Receivers are being printed and sent to accounting.
5. Some payables become receivables.
6. You process hundreds of invoices every week from the same vendor(s)

Much of the processing in accounts payable can be automated to some degree by using document imaging technology. An analysis of the department will determine to what degree you can automate and realize a good ROI. This article addresses entry-level document imaging and how you can make it pay off.

An accounts payable department with at least 5 employees should be able to justify a document imaging system based on vendor research and check matching.

These two functions may take 30% or more of a clerk’s time. Eliminating check matching and reducing the time it takes to research vendor issues will increase productivity 15-20%. In addition you will have better control of your invoices, and auditing will be faster and cost less.

Setting up an entry-level document imaging system is not complicated it just requires a plan. The first step is taking a document inventory.

* Get samples of all documents that are part of the invoice paying process, which may include but is not limited to:

o Purchase order
o Packing slip
o Receiver
o Invoice
o Expense report
o Check

* Read How to select a document imaging scanner to help you select the right scanner for your needs.

* Determine origin of each document and how it is created.

o Internally or externally
o Computer generated

* Follow the flow of each document and determine how each document affects the process and the disposition of each document.

* After an invoice has been paid which documents are filed with the invoice and which documents are in other locations.

o Are checks matched with invoices and attached to the invoice?

* What are the retrieval requirements after the documents have been filed?

o These are the typical index keys used in accounts payable.
+ Purchase order number
+ Vendor number
+ Invoice number
+ Check number

Usually in accounts payable invoices and packing slips are scanned and indexed. The purchase orderFree Web Content, receiver and check can be captured from the print spooler through a COLD (Computer Output to Laser Disk) process. These documents can be auto indexed by the COLD process.

Is there a need to match and verify check amount and vendor against the invoice?

? Database integration can be used to automate the check matching process.

The next step is to answer some questions about how to size your entry-level system.

1. How many documents per day will be scanned?
2. How many users will be retrieving documents?
3. How many years of documents will be on line?

It is always a good idea to check with your computer department and find out what server platforms they prefer.

The last step is to determine where you want to go with document imaging by answering the following questions.

1. Do you want to do work flow in accounts payable?
2. Do you want to automatic data extraction from invoices?
3. Are there other departments that will use document imaging?

After you gather all of this information you will be ready to set-up meetings with vendors. Choosing the vendors to talk to will be a challenging task. The requirements of the computer department may limit your selection. Windows 2003 or Linux is the most common platforms used for document imaging. You can start your search for vendors by doing a search on the Internet. Look at the vendors web pages; this will give you some information about their products. Select several to contact and set-up an initial telephone call or visit to start the process. On the initial visit you need to determine:

1. What server platforms are supported
2. Are their systems open
1. Not hardware dependent
2. Images stored in standard formats
3. Provision for exporting images with associated data
3. Do they have the features that match your requirements
4. Is their system scaleable
5. How is their system serviced
1. Can they work on the system remotely*
2. Do they have source code
3. What are the annual service fees
6. Three references
7. Will their system fit into your budget

Call the references before moving forward.

Select no more than three vendors for the final phase of the process. Have vendors demonstrate their system. Give them samples of your documents to use for the demonstration.

After the demonstrations are complete decide which of the vendors you what to give you a proposal.

If you would like some help with this process send an email to

The next article in this series will cover accounts payable workflow and data extraction.

* If a company can work on your system from their office you will get faster service


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