New Approaches to Paper Documents

Feature Article | June 10, 2003 by Matthias Hilpert

Electronic recognition of paper documents has developed at a fast pace. This technology and complete integration into an enterprise resource planning (ERP) system creates a huge potential for savings when processing incoming invoices while minimizing errors and optimizing processes at the same time.
The first and most important step in optimizing invoice receipt with paper documents is converting the invoice data into electronic form. The invoices are scanned so that the appropriate SAP applications can read, process, and transport them. Audit security and permanent availability is guaranteed only when then documents have been archived electronically, but the decisive factor remains error-free creation of invoice data. Incoming invoices can be posted, verified, and paid only when the data is correct.

Document recognition

Various recognition procedures are used as the basis for automatic invoice processing. Form-based recognition applies only to predefined invoices, but learning systems enable a higher rate of recognition. Nonetheless, free-form recognition offers the greatest effectiveness and efficiency. It combines high-quality optical character recognition (OCR) with intelligent and flexible interpretation that handles the recognized data according to its significance and context. For example, free-form recognition interprets a number on the document as an order number, rather than a customer number or invoice number, regardless of the number’s location on the document. In collaboration with workflow components, this feature guarantees a high level of automation in the processes surrounding incoming invoices and thus reduces costs.
In addition to document recognition, the harmonious integration of scanning and archiving is a decisive factor in the overall flow of invoice recognition. An appropriate solution must fulfill technical, professional, and organizational requirements:

  • Documents from various business partners must be processed. Partner-specific solutions require a great deal of reconciliation efforts, so they should be used only in limited situations.
  • All types of documents must be considered. Invoices and credit memos without references to the ERP system remain part of day-to-day reality and still make up the majority of incoming documents for many companies.
  • All processes must be documented and archived completely and in a manner that allows for auditing. The incoming documents and the process must be monitored from the very beginning.
  • All components should be integrated into the existing infrastructure with standard interfaces – without causing any serious changes to the organization and flow of information, if possible.
  • Central workflow components must guide end users through all the required manual processing steps, and they must do so without changing the user interface or system. The integration of workflow ensures the optimal and flexible organization of work and information flow.

Overcoming the obstacle of media breaks

System and media breaks are the central problem of process optimization for incoming invoices. Up to now, solutions have worked with only one type of recognition, one preset to the ERP system. The disadvantage of this procedure is that employees must first work outside of an SAP application and then later work inside it. To transfer valid invoice data that can be posted to the ERP system, the business logic involved in recognition and postprocessing for SAP invoices must be reset for SAP solutions. Doing so requires a great deal of effort and does not completely satisfy the flexible customizing requirements in the SAP environment. InvoiceCENTER for SAP solutions, developed by PSINOVA AG und Océ Document Technologies, sets up a continuous process in SAP R/3. Controlled by SAP Workflow Engine, complete integration of archiving, universal invoice recognition, and a central user interface for all incoming invoices form the basis for the design of the solution.
Scanned documents are stored in an archive at the beginning of invoice processing (early archiving) for later entry. The paper invoices are unstapled at the scanning workstation and separated by dividers to delimit documents with multiple pages. Scanning occurs in batches; the scanned images are stored in the archive for future auditing over the ArchiveLink interface. The interface sends a unique key for each document and the type of document to SAP Workflow.

SAP workflow controls recognition, validation, and import

In the next step, a workflow actives the recognition component, DOKuStar from Océ Document Technologies, which is integrated into InvoiceCENTER for SAP solutions. DOKuStar consists of two components: the recognition component, DOKuStar Extraction, and the validation component, DOKuStar Validation. SAP Workflow controls and monitors the entire process of recognizing and validating invoice data. This feature ensures that the SAP software can reconstruct the processing status of every invoice. Data that has been read eventually travels over a standard SAP interface (an Intermediate Document or IDoc) and lands in the appropriate SAP application. The interface works both synchronously and asynchronously and imports data into the SAP solution from all types of documents (invoices and credit memos, with or without reference to an order).
InvoiceCENTER for SAP solutions offers a user-friendly template to simplify data entry. This feature ensues that the solution is release-independent and allows processing of all incoming invoices and credit memos over a central interface. For example, employees can also process electronic invoices using the template. It also serves to complete invoice data and assign invoice and order items to each other; it is the starting point for subsequent posting. Before the invoice data is displayed in the template, automatic checks and are performed on data from the SAP application to ensure that it is on target. If the invoice data is complete, it is automatically posted to the appropriate transactions in SAP Financials or SAP Materials Management. An employee’s list of tasks then displays only the invoices that require manual supplements or checks. The level of automation is variable so that an additional check by another employee (according to the principle of separation of function) is possible. Once the invoice data is posted to the appropriate SAP applications, the workflows there (such as approval for invoices without orders) process the data, thus integrating it completely into the existing environment.

A central user interface for accounting clerks

The entry template is the central user interface for InvoiceCENTER for SAP solutions. The template combines all the essential input fields that are spread across several screens in SAP R/3, particularly in releases prior to SAP R/3 4.6. The template also corresponds to the look and feel of SAP software. The template automatically relates the data that has been read to SAP data (from goods receipt or orders, for example) and displays it together. Accounting clerks can then check the data, assign it, and even supplement it quickly if needed. The scanned invoice remains visible on the screen during all processing. This feature allows accounting clerks to verify or supplement the data. A direct connection to master data maintenance exists for missing or changed master data, such as the vendor’s address or bank information. These tasks can also be controlled with SAP Workflow.

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