The rapid development of IT solutions available for businesses is leading to a continuous need to adjust the way we handle internal activities and documentation in order to optimize company’s resources.
What can you do to adjust and simplify your accounting processes? How to increase data extraction success rate and what are the advantages of these changes?
Accounting activities’ evolution over the past few years is a good example of how technology influences the way we handle routine tasks that usually bear a high risk of error when performed by individuals, needless to say how much time they take up. So, what are the best practices nowadays, in terms of financial data and documentation management?
Eliminate human errors and remove unnecessary administration routines
- Eliminate basic human errors – you can achieve that by using electronic invoices. Paper invoices are passé for some time now and invoices are exchanged electronically either via e-mail or through secured cloud platform. Thanks to this approach, you will no longer lose paper documents in the office and you will be able to keep payment deadlines.
- Let technology handle your routine activities – use OCR (optical character recognition) to extract and validate data from your accounting documents. Don’t rewrite them manually to your systems. Automated data extraction will save significant amount of time.
- Make sure everyone is on the same page– use a unified accounting workflow system in order to better track the status of each activity and remove any misunderstanding regarding approval status or responsibility level. Valuable training sessions are other key elements in employee engagement. It’s good to record them and provide to employees on cloud to rewatch anytime.
- Remove unnecessary administrative activities– Walking from office to office with every document approval? Almost impossible at the time of regular home office. Offer your employees the possibility to input their expenses or any other type of requests online.
- Don’t sacrifice well-performing areas or software in order to improve others– use flexible online solutions. TULIP, with its module TULIP Accounting helps clients to digitise whole AP process, which leads to the increase of accountant work and unburdening them from unpopular tasks. Using TULIP is not dependent on specific accounting software.
- Merely saving a document is not enough– you need to permanently have access to the entire workflow connected to that specific document and current technology is now offering you this possibility.
Shocking numbers about paper – 74 % of companies in the Czech Republic still print invoices
Research performed in the Czech Republic in March 2021 shows that 74 % respondents admitted that they still print their incoming invoices.
We can confirm the statistic with our own experience with business around Europe, not just the Czech Republic. What makes the number shocking? The fact that invoices are created online (usually as PDF), printed, signed and then scanned again and sent to client.
For one step, company creates paper document which is used for a few minutes, if not seconds.
It is completely okay to archive e-document with e-sign in most legislations. You don’t even have to sign the invoice. Why so many companies print them? The answer is that many employees are not familiar with the legislation, and they do that just in case to be sure they are doing the process properly.
If this is the case in your company as well, it may be good if the management set up rules in general. If you do not solidly forbid printing invoices (incoming or outcoming) and folding them to physical archives, you will not abandon this unfortunate habit for some time.
There are many sophisticated IT solutions for AP management, so let’s use them without being worried to automate.
Invoices’ data extraction – how to increase success rate?
Firstly, do not trust supplier who guarantees 100 % data extraction. This is simply not possible. There are many factors that have an impact on success rate of data extraction. If we exclude quality and technology of OCR itself (which might be various), success rate of data extraction depends on:
Do you see how many variables there are?
In addition, invoices are difficult for another reason – they are unstructured. It can happen that two invoices have different structure even if they are from the same supplier, e.g. cost summary can appear on different pages of the document due to the different number of lines.
Let’s describe an example:
Imagine an invoice that your colleague receives right at the time of enjoying his snack. He will hold the document with not exactly clean hands, put it down on the table and eat upon it (we once received an invoice that had a clear shoe sole imprint on it). This document will later be scanned to the system and extracted. It will not really be possible to extract 100 % of data from the document.
Even with a perfectly clean document, the system might have a problem recognise 0 from 8, letter B from number 8, E from F etc. So, it can’t extract data for 100 %. That’s why many OCR systems are set up in a logic that if an automat is not sure about a sign, the document gets paused and cannot be processed to the next step. Verification provided by human is required. Validation team member must provide control over the document, evaluate it and rewrite the unidentified sign manually. Only after this control, the document can be sent to the next step.
New technologies appear every day, machine learning can be programmed so repeating invoices from one supplier are automatically recognised, but the truth is that IT systems still miss the context that is only clear to human beings.
What can we perfectly manage via IT solutions in the accounting area?:
- Electronic invoice delivery
- Data extraction
- Approval workflows
- Automated booking
- Machine learning for repetitive suppliers and goods (TULIP has a self-learning algorithm for automation of invoice pairing)
Which human tasks are affected by accounting automation and how?
What will bring us using these new technologies? Well, everything that an employer requests from IT solutions:
Do you want to digitise your accounting workflows and automate invoice approvals? Ask for demo presentation of TULIP Accounting platform:
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