What’s the importance of high capture rates in automation?
If you cannot achieve the highest possible capture rates you will find that any automation project will struggle to really give the benefits you could have achieved.
Ensuring that you catch as much data as possible, with as little human input, allows you to generate far greater returns on your investment.
Reducing the manual input at every other step of the process, through authorisation, matching, sign off etc.
The importance of capture rates at the very start of the process.
You could have the best workflow tools.
Even the most up to date supplier portal.
None of this matters if you’re not getting high quality and high volumes of data into your systems with as little human input as possible.
This is 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 practices.
Your capture rates will determine the overall success of your AP automation project.
A note to start.
Before we talk about the importance of capture rates, we should quickly highlight the most regular methods of invoice processing.
There are various options, and we are not going to list them all, but the most common three are:
- Manual entry by an accounts payable clerk.
- Outsourcing your invoices to be processed offsite.
- A finance automation solution.
Each have their benefits and pitfalls. Some more so than others.
As we’re discussing the importance of capture rates and process management, we will be focusing on finance automation solutions.
Although it is worth noting… If you have outsourced the process it is a good idea to find out how they are processing your invoices.
Different levels of automation offer different capture rates.
You will also find barcode recognition and template-based capture still being sold.
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 the right information based on historic rules (to the left, right etc.) for each supplier.
This idata is then extracted and sent to be matched against information held in other systems, a purchasing system or an ERP for example.
Older applications for invoice capture.
Template-based capture works very similarly, leveraging more traditional capture.
First a template must be created by the user, the template is created with boxed parameters and any information inside the boxes will be picked up.
If one of your suppliers changes where they put information on an invoice you will have to create a new template.
This is fine if you are dealing with one or two suppliers…
But it can quickly add up if you have a lot of suppliers on the books.
Of course, the automation you were trying to achieve quickly turns back into 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 barcode is scanned the information will be cross referenced and will normally return an image of the particular invoice or document.
This isn’t really automation, it is more of a slightly advanced filing system…
Smoke and mirrors during demonstration.
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 that they will build a demonstration specifically for these invoices and the associated supplier master data.
Ensuring that when they “put the invoices through the system” they get a 90% or higher match rate.
If they haven’t asked for the invoices before the day of the demonstration, they may still get you…
On the day of the demo, before they explain the benefits of their system, they will give you insight into their history, expertise and pedigree.
Just before the pitch they will ask if you have the invoices ready for the live demo.
Whilst the sales guy is doing his bit, the tech guy is checking through the invoices, pinpointing areas they may give them trouble and picking invoices that will go through smoothly.
In some instances building specific templates to ensure their success.
And in other instances actually adding data into the demo platform to help the match rates.
How we prove our capture rates in a demo.
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.
After our sales guy has done his bit, and with no time for us to check what is going on. We even did this during a live webinar a week or two ago!
We can guarantee a quality capture rate of 85% 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! Yet…
Next time someone tells you about their capture rate, ask them to prove it.
Don’t give them the invoices in advance, put them on the spot and see what they can really do.
After all the proof of the pudding is in the eating…
Why is capture the most important element?
Data has become one of the most valuable commodities in the world.
Perhaps even more so than physical or digital currencies to many organisations and enterprises. You only need to look at the most highly valued companies to see it.
The need to take control and create real benefit from information makes the capture and capture rates the most important piece of technology in any automation software today.
People will argue that it’s how you use your data that drives real benefit for business.
We would argue that this is incorrect; it’s how much and the quality of what you capture that is most important.
Because this feeds your ability to then make use of your valuable information.
Quality, speed, reliability, doing what you need it to.
Quality, speed and accuracy are key factors of any great capture piece.
Giving you the reassurance of quality data that allows you to drill into 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.
It is no surprise that the more manual the process the slower, humans can only do so much for so many hours. Machines just don’t sleep.
The accuracy of the data capture is 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 and gives you confidence at each of the next steps in the process.
Nobody can capture 100% of every invoice, the only way we can see that being achieved is if there is only 1 supplier, and the invoices are always absolutely perfect…
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 where so many providers are offering a one size fits all application.