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January 14, 2021

It is not a common practice to create a request form to process invoice and then print it before sending with the paper invoice copy to the processing team. Globally, invoices are directly routed in system via e-Invoicing, EDI, email downloader, scan centers, etc. Terms like “Paperless office”, “Paperless factory”, “Digitized Office” have been around for a long time. But even today, the ground reality is that there are a lot of paper documents that are still in existence. Purchase Orders, Invoices, Invoice request forms, Goods received notes and several other documents are still generated, received and processed in large numbers in companies all over the world. Paper handling processes not only involve a lot of non-value adding overheads but are also cumbersome and not sustainable in recent times specially when a global pandemic like COVID-19 brings physical movement of documents to a halt.

Manually handling couriers and scanning invoices for indexing takes too long and creates overhead in timely payment to suppliers, so even if an invoice is received, it’s still difficult to track down. As a result, keeping visibility of invoices is quite a challenge. When invoices need to be manually sorted, scanned and indexed, there is a significant risk of human errors.  The need of the hour is to leverage technology to digitalize such paper handling processes.

As the buzz around digital transformation continues to grow, the terms ‘digitization’ and ‘digitalization’ are used interchangeably without knowing the difference between them. Understanding the difference between these two terms is critical as the digital transformation gains momentum and businesses move toward digital technologies to enhance visibility and eliminate inefficiencies in their operations. Digitizing means taking existing business models and processes to digital interface without changing the core downstream systems. Digitalizing business means going all digital with both core processes and business models developed using digital technologies.

Digitizing the paper handling process involves scanning of documents and converting into digital (e.g. PDF) form before using Optical Character Recognition (OCR) to extract specific data fields and information from the document. But just applying OCR in the process will not address all concerns as there will be cases where fields are not read properly, or accuracy of fields is not good due to reasons such as different invoice formats used by different suppliers. By digitalizing the invoice handling process, the entered source information can be stored for better accuracy to bring efficiency in downstream operations. Digitalizing does not stop only on better accuracy and can add a lot of value to overall process in comparison to digitizing. Next step in digitalizing is to have a process workflow engine that can orchestrate the document workflow to handle auto approvals, auto allocation to the right team and auto alerts to stakeholders involved. On top of that, application can be made “smarter” or “intelligent” through technologies such as artificial intelligence (AI) and machine learning (ML).

Digitalization can play a significant role in helping organizations to save costs, reduce carbon footprint and also reduce payment lead time to suppliers. But implementing digitalization is not so easy. There are quite a few challenges in terms of change management and execution. Switching various stakeholders from the decade old process to a new one can be a reason of discomfort due to the fear of losing invoice in transition that may impact processing cycle time. But if process application design is simple, user friendly and based on eliminating non-value adding activities, then these challenges can be easily overcome.

Digital invoice handling process can not only give touchless invoicing experience but also provide benefits such as:

  • Saving on printing and courier costs

  • Elimination of manual invoice handling processes such as sending, receiving and opening paper invoices

  • Automated tracking and monitoring of document handling processes such as courier

  • Easy tracking & clear visibility on invoice inflow

  • Reduction in lost/misplaced/damaged invoices

  • Faster payments to suppliers

Jogender Chahal is with Tata Consultancy Services and has been associated with TAPTM, TCS Procure-to-Pay Cloud Solution. He has over nine years of professional experience in Accounts Payable (AP) automation, retail merchandising, sourcing and spend analysis. He has extensive experience in the Retail and Manufacturing industry verticals. He holds a master's degree in Business Administration and a bachelor's degree in Electronics and Telecommunication Engineering.

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