New survey identifies paper-based processes as costing far more than automated equivalent
By PAUL QUIGLEY
ECM Plus +++ New research has found that organisations are spending £15.5 billion to £18.5 billion interpreting and entering business information, 80 percent of which is unstructured.
Benchmarking research into the financial function of global business organisation by document automation specialist Readsoft has suggested that rolling out automated processes in conjunction with invoice processing could help British businesses cut cost per procurement to 92 per cent lower than the average.
However, companies that use electronic processing are reducing cost per procurement by an order of 92 percent less than the average, ReadSoft said.
According to the research, which benchmarked over 4,000 organisations around the world, companies, the largest companies are process more than 41,000 invoices per full time equivalent (FTE) employee in the finance department. Yet the overall median for accounts payable (AP) per FTE is just 11,000, and for companies with less than £1.85bn turnover this falls to 8,000 per FTE, more than halving the department’s efficiency.
ReadSoft said that what is holding many companies back is the volume of accounts payable transactions that remain paper-based, as opposed to electronic. Top performing companies have twice as many electronic transactions than paper (120,000 versus 60,000), with pdf-based invoicing the fastest growing and most preferred option, ReadSoft added.
But, the overall median suggests most finance departments still deal with similar numbers of electronic and paper invoices (60,000 electronic versus 70,000 paper based transactions). To deliver better managed accounts departments, organisations need to be able to deal seamlessly with any transactional format, whether paper or electronic.
Simon Shorthose, managing director for Readsoft in Britain commented: “ReadSoft’s capability to automate all document handling, offering a blended model regardless of format and media, enables companies to transition to hybrid models that equally encompass paper and electronic invoicing. This then delivers greater integration of Business Process Management and data capture and leads to world class operations.”
“This research demonstrates that better document processing delivers immediate returns on investment” he added. “Any business not looking to automate its document management is simply throwing away shareholder’s money.”
Research on finance process was collated by ReadSoft and The Hackett Group which benchmarks 4,000 leading global companies. Organisation effectiveness was benchmarked against a range of financial functions including: days sales outstanding; days payables outstanding; accounts payable rework rate; customer billing rework rate; accuracy of forecasts and analysis; functional role in strategic decision making; per cent of time analytic focus in on proactive decision making; per cent of time spent collecting and compiling data for analysis; and per cent of analysts with acumen to function as business partners.
Organisation efficiency was benchmarked against: overall function cost as a percentage of revenue; process cost as a percentage of revenue; technology cost per function FTE; staffing levels by process; cycle times and iterations; unit cost of transactions; utilisation of self-service for inquiry; application complexity; automation of transactions; reliance on spreadsheets and per cent of business reports distributed electronically.