A recent study by Credit Control Magazine has revealed that the vast majority of management figures in companies across the UK believe that document management solutions should be seen as central to efforts to recover from the current economic downturn. This article examines Credit Control’s findings in more detail and examines how a Document Management system, such as those used to automate payments for purchase and order-to-cash processes, can provide organizations with improved cash flow as well as cost and efficiency savings that will be crucial in lifting them out of the downturn.
Document Management: An Affordable Luxury or Essential Consumption?
Understandably, under economic conditions testing, companies are looking for ways to cut non-significant costs and save costs. But it seems that the perception that document management solutions are somehow a luxury consumption or an extra ‘extra’ for businesses seems dramatically lacking. Credit Control argues for a compelling case that ‘companies should not put theirs [document management] software purchases are on hold ‘and they should actually invest in the key systems that enable more efficient operation and’ continued growth and development ‘. Without the right software systems in place, it is argued, companies will leak money and not run as efficiently as they could be. Electronic document management along with automation, paper-based processes will ensure leaner, more streamlined operations and greatly reduced costs.
Credit Control study:
The key to Credit Control’s claim is a survey they have conducted by 160 senior financiers and IT professionals (CFOs, financial controllers and IT executives) across a range of public and private sector organizations. The survey revealed that 88% of respondents thought it important to have the right software systems in place for businesses to thrive in the current economic climate. And of these, 60% said it was ‘important’ to have the right software systems. Of the remaining 12%, 10% of respondents thought it was ‘relatively important’ to have the right software systems in place, while only 2% of respondents did not know if they thought software systems were important to help companies to flourish or not.
Document management solutions: The first place to save:
The Credit Control study seems to confirm that leadership figures within most organizations recognize the importance of software solutions, including document management systems, to succeed in any economic climate. And since 37% of respondents were actually interested in implementing electronic document management solutions at the time they were asked, it seems that most people consider document management as a particularly effective means of achieving cost-saving and efficiency goals.
How Can Document Management Systems Help?
Procure-to-Pay (P2P) is a surprisingly expensive process that can cost as much as £ 50 per Transaction. It can be extremely time- to receive purchase invoices in an organization, log this information into the accounting system, photocopy the invoices for the relevant files, send invoices around the business for authorization, and then return these invoices to accounts payable for payment and send Consumer banknotes are often quite expensive and are, of course, vulnerable to human error. Using an integrated electronic document management system, this process automates so that when a purchase invoice arrives at an organization, it can be scanned and automatically tagged to the correct entry in the financing system. Optical Character Recognition Technology (OCR) technology is able to read and verify the data on the invoice before uploading it to the core financial system, eliminating the need for manual data entry and the associated errors. And, using document work software and predefined authorization routes, the invoices depicted can automatically be sent to the relevant decision makers to approve, reject or query. Authors are also able to view associated documents onscreen, such as purchase orders or proof of delivery, to assist with invoice authorization. Once the invoices are approved, the finance department can pay the suppliers and a remittance advice can be automatically generated and e-mailed to the supplier advising them on payment.
Getting cash into an organization as quickly as possible and maintaining a healthy cash flow is absolutely essential to the successful running of any business and especially in a time of financial uncertainty, where it is becoming increasingly difficult for everyone except the most capable organizations to flourish. Investing in document handling To streamline the credit check function, Credit Control Magazine has argued convincingly should be seen as a necessity and not a luxury.
Reducing the time credit controllers spend on pushing paper by introducing document management systems can help bring cash into a business faster and cost-effectively. One particular area where such solutions can really help is proof of delivery or PODs, as they are often known.
By scanning in PODs using an electronic document management system and attaching the mapped POD to the relevant transaction in the financing system, users can create a permanent record that cannot be lost or destroyed. With this type of POD always at hand, it can be delivered to the customer with the associated sales invoice, so there is even less excuse for non-payment. And being able to send POD electronically like this one, rather than sending it, is of course also faster process.
Document management outside the finance function: