The Importance Of Capture At The Start Of The Process.
You could have the best workflow, the best analytical tools, even the most up to date supplier portal, but none of this matters if you’re not getting high quality and high volumes of data in to your systems at the beginning of the process. Hence, the importance of capture within Finance and Accounts Payable.
Logically, it all starts at the beginning of any process, if you get a bad start it will continue on through the process and will only get worse, causing all sorts of issues as a result.
But, if you start with high quality data, the reality is that any breakdown further through your process is likely to be as a result of business rules or poor business practices.
Before Discussing Capture In Detail.
Before we talk about the importance of capture rates, we should first highlight how the information from an invoice is captured and processed into a finance system.
There are various options, but the most common three are; manual entry by an accounts payable clerk, outsourcing your invoices to be processed offsite and a finance automation solution.
Each have their benefits and pitfalls. As we’re discussing the importance of capture rates and process management, we will be focusing on finance automation solutions and the way that they capture and process the information.
How Do You Capture Information?
OCR (Optical Character Recognition) is the most common capture technology found in finance solutions, but you will also find barcode recognition and template-based capture. More recently, the most advanced solutions are using ICR (Intelligent Capture Recognition).
ICR technology is designed to capture as much information on an invoice as possible. In order to do this the solutions will normally scan and capture each of the characters on a document. The information captured is then matched against a database of keywords for reference (Invoice Number, Inv. No. Inv # etc.).
Once the key words have been found, the technology will then look for corresponding information based on historic rules (to the left, right etc.) This information is then extracted and sent to be matched against information held within other systems.
Template-based capture works very similarly, leveraging more traditional OCR, but first a template must be created by the user, the template is created with boxed parameters and any information inside the boxes will be captured.
If the location of the information is changed on the document, then a new template will have to be created. This is fine if you are dealing with one or two suppliers, but it can quickly add up and the automation you were trying to achieve, quickly turns back in to a manual process.
A barcode on an invoice works in a similar way that a barcode would work at a supermarket, the bars in the barcode represent numbers and letters. When the bar code is scanned the information will be cross referenced and will normally return an image of the particular invoice or document.
Smoke And Mirrors During Demonstrations.
Most invoice automation companies claim a capture rate that exceeds 90% and they will happily prove that with a demonstration of their software.
All you need to do is set a date and time… But before they demo, they request a sample of the invoices to “build the demo” and “show you how they process your own invoices”. Sound familiar?
So, what we probably shouldn’t tell you…
The chances are, what they will then do, will be to build a demonstration specifically for these invoices and the associated supplier master data, thus ensuring that when they put the invoices through the system again (I am doing air quotes here) they get a 90 or above match rate during the demonstration.
If they haven’t asked for the invoices before the day of the demonstration, they will still get you…
On the day before they explain the benefits of their system, they will give you insight into their history, expertise and pedigree. Then, when they arrive to run the demo, they will ask you to hand over the invoices to be processed during the demo.
Whilst the sales guy is giving his spiel, the tech guy is combing through the invoices, pin pointing areas they may give them trouble and pick invoices that will go through smoothly. In some instances building specific templates to ensure their success.
We are so confident with our scanning solution we are happy for you hand over your invoices just before they are required for scanning and capture by the solution.
We can guarantee a quality capture rate of 85%, this is before the system has been optimised for you, your suppliers and your invoices.
Of course, we would ask that you don’t supply us with copies of invoices that are so faded you can barely read them yourselves… We aren’t AP magicians!
Next time someone tells you about their capture rate, ask them to prove it. Don’t give them the invoices beforehand, put them on the spot and see what they can really do.
After all the proof is in the eating…
So, Why Is Capture The Most Important Element?
Data has become, arguably, one of the most valuable commodities in the world. Perhaps even more so than physical or digital currencies to many organisations and enterprises.
The need to take control and create real benefit from statistical information makes the capture and capture rates the most important piece of technology in any automation software today.
People will argue that it’s what you do and how you manipulate the data that drives real benefit for business, but I would argue that this is incorrect; it’s how much and the quality of what you capture that is most important.
The quality, speed and accuracy are key factors of any great capture piece, giving you the reassurance of quality data that allows you to manipulate and understand key areas of your business.
The speed at which you can capture the information will give you a massive advantage over any company that maybe using template-based OCR or even worse, manual touch, by removing manual errors and timing.
The accuracy of the data capture is fundamentally the most important quality of any great OCR or ICR capture solution, reliability of the information being captured from any source is a minimum requirement.
Every capture piece can, in theory, capture all the information i.e. template-based technology (old technology) but it’s how it understands what it’s capturing, being able to recognise letters, words, digits, currencies, etc.
Finally, can it capture what your business needs? We are not all the same, and we all have different processes. Flexibility is, possibly, the next most important element. Especially in these days of Cloud and SaaS applications.