white paper
How to Quit Paper
in Order-to-Cash
and Procure-to-Pay
Bringing New ROI
to SAP® Solutions
www.esker.com
Esker
white paper
Table of Contents
Executive Summary.......................................................................................................................................................................... 3
Document Process Automation. .................................................................................................................................................. 4
Leveraging the Esker Platform. ................................................................................................................................................... 6
Order-to-Cash..................................................................................................................................................................................... 8
Sales Order Processing......................................................................................................................................................... 8
Accounts Receivable Invoicing...................................................................................................................................... 10
Procure-to-Pay................................................................................................................................................................................ 12
Purchasing. ............................................................................................................................................................................ 12
Accounts Payable............................................................................................................................................................... 14
Conclusion........................................................................................................................................................................................ 16
About Esker. ..................................................................................................................................................................................... 17
Esker
white paper
Executive Summary
Many of today’s most profitable businesses run SAP solutions. Considering the significant investment in SAP systems, along
with the increasingly competitive business environment, organizations need to achieve return on the investment.
SAP solutions take businesses a long way toward standardizing — bringing together interrelated business processes under
a standard architecture that helps the enterprise become more efficient, productive and agile in response to changing
business conditions. Within the enterprise, SAP solutions do an excellent job of automating and integrating many aspects
of business processes.
What complicates matters is the simple fact that business processes require information to be entered into and documents
to be delivered out of enterprise applications. Enterprise software typically does not include capabilities for universal
communication between an organization and its customers and suppliers. Business processes extend beyond the
enterprise, but the automation and integration often does not. Manual processing of business documents, with all its
obvious disadvantages, is a part of the enterprise unchanged by implementation of SAP solutions. Friction is still present
within key business processes, and it costs time and money.
Return on SAP investments will not be fully achieved by a
business until it can quit paper and automate the flow of sales
orders, customer billing documents, procurement documents
and vendor invoices into and out of the SAP system. Because
they are such a vital part of business processes, these
documents will ultimately determine the investment return on
SAP solutions.
Why quitting paper matters
Although paper is an source of unsustainability, cost, errors
and inefficiency in business processes, it remains pervasive.
Worldwide paper consumption has tripled in 30 years and
continues to grow, and 8 million tons of office paper (3.2
billion reams) are used every year in the U.S. Each ton of
paper equals 17 trees, 3 cubic yards of landfill, 2 barrels of
oil, 7,000 gallons of water and 4,100 Kwh of electricity. The
average office worker uses 10,000 pages of paper a year.
Even some of the largest companies running SAP solutions
continue to process documents manually, for a variety of
reasons. “Built-in” document processing capabilities are
limited in their business systems, and the cost and complexity of
reprogramming at the application level — with support for a full range of file formats and transports — makes it impractical.
Yet, the increasing demand for information to satisfy the needs of customers and suppliers makes it a business necessity.
In addition, it is not always possible to dictate how customers and suppliers send and receive information. Varying sizes,
cultures, requirements, expectations and established processes of trading partners all figure into the mix. Attempts to
accommodate all customers and suppliers often create IT complexity and require customization, which generally means
added expense. The goal is to meet these varying needs while controlling costs.
The solution comes in the form of a comprehensive “quit paper” platform that automates and centralizes capture,
formatting, conversion, routing and storage of information flowing into, through and out of the enterprise. This type of
platform enables businesses to:
§C
apture the necessary information from documents
§ Integrate the information into the SAP system
§D
istribute documents to the right places in the right ways
§P
rovide ready access to documents, document content and process information
In addition to cost savings from elimination of manual processes, communicating with all customers and suppliers through
the most appropriate channels translates into higher service levels and stronger business relationships. Increasing speed
and accuracy through document process automation helps businesses fulfill customer orders faster, get paid for those
orders sooner, optimize financial management and maximize supply chain efficiency.
This white paper outlines the value of such a solution to businesses running SAP as a tool to achieve immediate additional
ROI through automation of document processes within the order-to-cash and procure-to-pay cycles.
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Document Process Automation
Business processes run on input to and output from SAP solutions. Each step in a process involving a manual touch point
causes friction that costs time and money. Esker solutions reduce this friction, helping companies maximize profits by
automating and streamlining document-intensive business processes from beginning to end.
IT industry analyst research consistently finds that companies with the fastest-growing profits in their industry sectors are
addressing document process and achieving real benefits. Businesses with effective document processes are more likely
to be leaders in profitability, and more responsive to changing market conditions. As a result, the recommendation is for
organizations to examine key business processes for opportunities to achieve ROI.
BUSINESS PROCESSES:
Sales Order Processing, Accounts Receivable, Purchasing, Accounts Payable
Before SAP
Solutions
After SAP
Solutions
Today, with
Document
Process
Automation
Process 1
Process 1
Process 1
Manual
Processing
Manual
Processing
Process 2
Process 2
Process 2
Manual
Processing
Process 3
Manual
Processing
Process 3
Process 3
Manual
Processing
Manual
Processing
Time and
profit gains
with SAP solution
Time and
profit gains
with automated
document processing
TIME
As illustrated above, SAP solutions condense business processes so those processes become more efficient and the company
becomes more profitable. With e-commerce strategies leveraging technologies like EDI, IDoc, XML and Web technologies,
many companies even think of their businesses processes as fully automated. But the reality for most businesses is that those
technologies do not cover all customers and suppliers, so manual touch points remain after SAP solution implementation.
The percentage of customers and suppliers who are not e-enabled may be a minority, but even a small number can
represent significant cost and loss of productivity. And as long as paper remains, the company will be limited in its ability
to optimize efficiency in the order-to-cash and procure-to-pay cycles. Addressing this situation further condenses business
processes, yielding considerable additional value that is directly attributable to putting document process automation into
the system.
Businesses that remain saddled with sub-optimal document processes are limited in their ability to achieve objectives
such as reducing Days Sales Outstanding, shortening transaction cycles, improving operational efficiency, cutting overall
business communication costs and increasing profitability. The more customers, suppliers and vendors a company has, the
more paper that must be printed, retrieved, faxed, mailed, photocopied and then filed, making the process longer and
more error-prone.
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Connecting people, documents and processes
As a tool to improve business performance and simplify the IT infrastructure, fully capable document process automation
connects functional aspects of business processes that revolve around documents and the different phases of document
lifecycles.
� Purchase Orders, RFQ, RFP, Specs
Purchasing �
� Sales Orders, Order Acknowledgments
Sales Order Processing �
� Shipping Reports, Shipping Confirmations,
Bills of Lading, Proof of Delivery, T&C
Shipping �
� Reports, SEC Filings, Investor Relations,
Executive Development
Corporate �
� Invoices, Statements, Account Summaries
Collections, Credit References,
Rsminder Letters
Accounts Receivable �
Accounts Payable �
� Remittance Advice, Electronic Fund Transfer
Sheet, Payment Request Approval
Document process automation encompasses:
§ Document content entering the enterprise — including capture and validation
§ Document flow through the enterprise — including document approval workflow and archiving
§ Document distribution to customers and suppliers — including notification returned to the SAP system
As the need to exchange business information with customers and suppliers through multiple media increases, organizations
recognize that the most practical way to automate all document processes for all business partners is through a centrally
managed information exchange platform that requires no custom programming to implement.
Intelligent technology to recognize document content makes this possible — and feasible — by automating document
processing based on business rules and user preferences through logic residing outside the SAP system. So, SAP applications
require no modifications. This solution extends the ERP standardization model to the exchange of information that supports
business processes, eliminating the cost and inefficiency of manual document processing.
The platform supports SAP communication and connection architectures, enabling automated processing of documents
into and out of SAP applications. When input or output reaches the platform, business rules determine disposition based on
content and corresponding preferences for transformation and delivery of the document. Users can manage document
processing through standard SAP desktop interfaces.
Comprehensive document process automation document delivery has three essential characteristics, including:
1. Unlimited flexibility in both what information can be processed and how it can be processed
2. Non-intrusive integration into SAP solution environments with a seamless interface and external residence
3. Fast implementation without the need for custom programming
The goal of deploying such a solution is to improve business process efficiency through information exchange with SAP
solutions, which have the ability to interact with technologies such as XML (Extensible Markup Language). Document
process automation achieves this communication by enabling SAP systems to use data contained in documents — both
electronic and paper. Information becomes transparently available, whether it is in data or document form.
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Leveraging the Esker Platform
In the big picture of business processes there are two basic cycles: the order-to-cash cycle of fulfilling customer orders and
collecting payment, and the procure-to-pay cycle of buying the goods and services needed to do business. The core
principle behind Esker document process automation is a focus on helping businesses quit paper to drive operational
efficiencies, cost savings and visibility for process control. Esker offers solutions specifically designed to eliminate, as much
as possible, the huge amounts of paper flowing through order-to-cash and procure-to-pay cycles.
ORDER-TO-CASH
SALES ORDER PROCESSING
PROCURE-TO-PAY
Customer
Order
Purchase
Order
Payment
Your Customers
E-PURCHASING
Payment
Your Vendors
Your Company
Customer
Invoice
Vendor
Invoice
ACCOUNTS RECEIVABLE
ACCOUNTS PAYABLE
Esker solutions satisfy the three key criteria for automated document processing with SAP applications. Leveraging SAP
certified integration and patented rules-based automation technology, and available both as an on-premise server or as
on-demand services (SaaS), Esker solutions integrate seamlessly to provide full document delivery capability — including
status notification returned to the SAP system. Esker solutions automate every phase and every type of document delivery,
from data capture to document formatting and transport.
Results with Esker solutions include reduced IT complexity, shorter cash collection cycles, more timely ordering and receipt
of goods, improved quality assurance due to less manual data entry, and lower overall business communication costs. SAP
customers worldwide have achieved rapid efficiency gains for improved ROI and immediate additional value from their
SAP solution implementations with Esker document process automation.
With Esker solutions, SAP customers can overcome constraints on document content and format, email and attachment
handling, and document merges and revisions — particularly when dealing with IDocs or raw data formats. Esker solutions
recognize and process SAP document formats, including RDI and XSF, which reduces form development (SAPscript) time.
And Esker solutions allow the use of any common document transport to meet the varying expectations and requirements
of trading partners.
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Document process automation functionality of the Esker platform encompasses:
§ Data capture capabilities, including image recognition
§O
utput management for a full range of document transports
§N
otification functionality to track document status from within SAP applications
§O
n-demand fax and postal mail delivery services leveraging vendor-hosted infrastructure
§R
outing capabilities for prioritizing, approval workflow and validation inbound documents
§A
rchiving for native document storage and retrieval
§ F orm processing features, including powerful formatting tools
§X
ML transports for efficient communication between applications
§D
igital signature and encryption mechanisms to safeguard enterprise content
§A
uto-bundling capabilities to create complete packages of purchasing and billing documents
§R
eporting capabilities to monitor key performance indicators
Phased implementation with options
Esker solutions allow incremental automation of business processes as time and needs dictate. In fact, many organizations
initially implement Esker solutions to address one specific process; then begin tapping into its full potential as a solutions
development platform that can be applied to any number of existing and future process automation initiatives.
Esker solutions offer organizations significant financial advantages with the ability to:
§E
liminate the high cost and wasted time associated with manual processing of documents into and out of SAP
applications
§A
chieve additional return on investment in SAP solutions
§S
horten transaction cycles, reduce Days Sales Outstanding and improve cash flow
§B
oost productivity by freeing staff for more valuable activities
§ Improve response time, enhance communication and strengthen loyalty among customers and business partners
§ L ower operating costs to improve profitability and competitiveness
§G
enerate high-usability, presentation-quality documents to support corporate identity
§E
liminate expensive SAPscript customization and programming efforts
By automating the processing of documents previously tied to manual methods, businesses reduce the cost of
communicating with customers and suppliers. The savings translate directly to increased efficiency for improved profitability
and return on the investment in ERP solutions from SAP.
In addition, the capability to make document capture and transport specific to the sender or receiver translates into better
service and stronger business relationships. Esker solutions transform business information into new electronic formats —
HTML, XML, PDF, TIFF, and text — and deliver documents via fax, physical mail, email, print, wireless message, Web, IDoc,
EDI, and more.
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Order-to-Cash
From the arrival of a sales order from a customer to collection of payment for the order, manual processing hinders businesses
in their ability to improve customer service, cut order processing and billing costs, and reduce Days Sales Outstanding
(DSO). Companies processing customer orders manually often have backlogs of several days and are challenged in their
efforts to support growth with limited resources, handle exceptions efficiently, lower rates of errors and returns, and monitor
the order pipeline. And while businesses are eager to save the cost of manually delivering invoices to customers, many
companies sacrifice electronic accounts receivable invoicing benefits to satisfy customers who prefer to receive their
invoices by fax or postal mail.
Sales Order Processing
Sales order processing time can be dramatically shortened with Esker solutions. By reducing or even eliminating up-front
data entry, customer service and cash collection improve as a result of real-time response to inquiries, fewer processing
errors and incorrect shipments, and faster delivery of orders. Businesses gain the benefits of full order confirmation and
processing notification capability, easy extraction of rich order data directly into the SAP system, and immediate access
to inbound sales orders — without custom programming or workstation software deployment.
Typical paper-based sales order processing can be a tedious process with a long series of steps. A customer places a sales
order, which is manually verified and entered into the SAP system (creating the potential for errors). A hard copy of the sales
order is filed by hand, both chronologically and in the sales order archive, and another copy is manually printed and sent
to the sales department. Then an order confirmation is printed and manually faxed to the customer, and multiple copies
of a delivery bill are printed for the accounting and production departments, and for manual archiving in the sales order
archive and the chronological archive. A packing slip is manually printed for inclusion with the goods that are sent to the
customer, and an invoice is also manually printed, folded, stuffed into an envelope, metered and mailed to the customer.
Copies of the invoice are sent to the sales department and manually stored in the document archive.
Automated sales order processing is faster and significantly more accurate than the manual, paper-based alternative.
Sales orders are captured by the Esker solution, using intelligent technology, validated through a Web interface, and
automatically entered into the SAP system. The Esker solution can automatically send a fax confirmation to the customer.
A sales order is automatically archived, and a delivery bill is automatically sent to both the shipping and accounting
departments. A packing slip is automatically printed for inclusion with the goods, and an invoice is automatically generated
and sent electronically or mailed through an Esker-hosted production facility. Copies of the sales order and the invoice are
automatically sent by email to the sales department, and are automatically stored.
Automated sales order processing benefits
§C
ut order-to-cash processing costs by up to 70%
§R
educe order processing time by up to 90%
§ Increase the percentage of orders and order line items captured electronically
§ Prevent lost or misplaced orders by keeping them electronic
§ Lower stored data costs as a result of electronic archiving
§ Free-up staff time by as much as 65% so they can focus more on customer service
§ Increase data entry accuracy by more than 99%
§ Reduce returns, which directly affects the bottom line
§ Lower labor costs of order entry: from $5–$15 per order before to $1–$3 per order after
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Automated sales order processing overview
VALIDATED DATA
1
Incoming sales order
received by email, fax,
paper or via web
2
Data captured, read and made
available for verification
4
ABC
Sales Order created
in SD (using VA01 or
through data feed)
12,6
253.99
GL Act
19.6%
102,20
John
45,00
Email
Fax
Sales
Order
SAP® Solution
SAP®
Content Server
Esker
Archiving
Database
or
Paper & Scan
Web
3
5
Web form validation
Capture accuracy
Customer exists in SAP customer Master
Duplicate PO check
Exception management
Document accessible
via SAP interface
Case study
Following the acquisition of another large manufacturer, the company had 120 customer services reps receiving and
entering orders arriving in different formats with different expectations. Reps entered these orders using a paper-based
process that took more than 43 minutes per order on average, causing a backlog of 3 days. Each order was tagged with
multiple delivery dates based on inventory, and millions of dollars in orders were not being invoiced because reps were
unable to match proof of delivery with the orders.
An independent study found that implementing the Esker solution resulted in annual labor costs savings of $5 million over
3 years in addition to cost savings as a result of using less paper and reducing off-site document storage. The backlog
was decreased to same-day order entry, and average order processing time was reduced to less than 5 minutes. The
company is now able to report on every step that occurs during sales order processing, and employees can devote more
time to serving customers instead of entering orders. A company executive reports that instant access to order information
has helped to reduce the customer service group’s first-call resolution by 25%.
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Accounts Receivable Invoicing
While invoicing keeps cash flowing into businesses, it also costs money when invoices are manually processed for mailing
or faxing. According to SAP, the cost of mailing an invoice can be as much as $15 USD. Even with state-of-the-art ERP
software, the best efforts of accounting departments are limited by inefficient delivery of invoices.
Before invoices can be delivered and customers can pay, data from the SAP system must be extracted and composed.
Documents are printed and sorted, then manually faxed or folded and stuffed into envelopes for mailing. Invoices often
wait to be delivered at the end the month, which results in payment delays that inflate DSO rates. Invoicing also typically
involves photocopying and filing invoice documents for various internal and external recipients involved in the billing
process. The higher the volume of invoices to be delivered, the slower the entire process becomes and the greater the
potential for human errors.
IT analyst research has found that the average U.S. company can save millions of dollars annually by sending invoices
electronically. The percentage of electronically delivered business-to-business invoices is rapidly increasing because
businesses want to reduce costs, improve customer service, and enhance ROI; customers want to move money faster and
reduce accounts-payable overhead; and the investment needed to achieve savings is relatively low.
Automated electronic AR invoicing with Esker solutions simplifies billing operations at minimal cost, helping businesses eliminate
manual handling and reduce DSO. Companies can send 100% of their invoices electronically, as they are generated, while
enabling customers to receive those invoices in whatever way they prefer — whether by postal mail, email, fax or via online
portal. Users can simply “print” to a business rule to send invoices. Customers can choose how they want to receive invoices,
and sent invoices are instantly accessible for viewing. Businesses maintain visibility over the entire invoicing process with
integrated monitoring and tracking tools. To support compliance with international invoicing requirements. Esker offers bestin-class digital signature and certification for more than 35 countries around the world.
For cash collection, Esker solutions automatically compose and send documents in the best formats at the correct stages.
By eliminating the manual printing, sending and filing of documents, the process is shortened and all correspondence is
delivered at the appropriate time. Businesses can give customers the same amount of time to pay, but reduce average
time to collect cash by shortening the overall information exchange cycle.
Esker AR invoicing solutions effectively removes direct paper invoice and manual handling costs, helping businesses
improve financial metrics and gain control of invoicing processes by automating workflow. Companies can resolve contact
management issues and satisfy varying customer preferences for receiving invoices while gaining the advantages of 100%
electronic AR invoicing.
Automated AR invoicing benefits
§ Cut invoice delivery costs by 40–90%
§ Reduce billing document handling time by up to 96%
§B
illing errors and returns reduced by as much as 90%
§ Reduce Days Sales Outstanding by 2–5 days at minimum
§ Increase process control and visibility with tracking of individual invoices
§ L ower overhead and paper handling for printing, folding, stuffing, stamping and mailing
§R
eallocate resources from mail operations to more productive activities
§ Improve service to customers with real-time delivery and more choices for receiving invoices
§R
etrieve billing documents quickly and easily with electronic archiving and web portal access
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Automated AR invoicing process overview
YOUR COMPANY
SAP
ESKER
If customer
accepts e-invoice
Applications
If not, the invoice is
sent by regular mail
EMAIL
with attachment
or link to portal
CUSTOMERS
ESKER PRODUCTION FACILITY
ARCHIVING
M A IL
FAC
TO R
Y
Post Office
Delivery
CUSTOMERS
Case study
A leading maker of digital circuits sends 100,000 invoices annually to customers around the world. These invoices are
generated by the SAP system, printed, and sent each day. Prior to the Esker solution, the company used old green bar
forms and sent the invoices via FedEx worldwide. Invoices to Asia were manually batched, and invoices for Europe had to
be manually archived for Valued Added Tax (VAT) audits. Total annual cost of the process was estimated to be $98,000 per
year; the company quickly recognized the need to route European, Asian and U.S. invoices in daily batches according to
the distributor, and either send a single email with multiple secure PDF attachments, or send all the invoices as one secure
PDF attachment.
Working with Esker, the company shortened its invoicing cycle while gaining automated archiving for storage and retrieval
— complete with an audit trail. Invoices go directly from the SAP system via print spool to the Esker solution, which applies
formatting specific to U.S., European or Asian invoices. Asia invoices are batched, converted to a PDF and submitted to
a secure Web site. Then a notification email is sent to the receiving customer with a link to the batched invoices. Europe
invoices are converted to PDFs that are emailed (as attachments or with a secure Web link) and electronically archived
for searching and retrieval. This ability to merge 100 PDFs into a single PDF and route the document was a key factor in the
company’s decision to implement the Esker solution. Initial annual savings totaled $68,000 with ROI in three months.
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Procure-to-Pay
When companies add up all the time and resources spent on sourcing and buying the goods and services needed to
need to run their business, the cost of generating and processing a single purchase order can be as high as $250. And
difficulties arise in trying to manage audit trails, keep track of documents, share supplier information across business units
and optimize inventory control. In a typical manual process it can take nearly 4 minutes to key in a vendor invoice and as
long as 2 days to complete approval. Average processing cost is over $20 per invoice and the error rate can be as high as
4%. Companies miss out on vendor discounts and struggle to prevent duplicate payments, support regulatory compliance,
and maintain strong relationships with suppliers.
Purchasing
The purchasing department generates added value and profitability for the entire organization by communicating with
suppliers to procure high-quality goods and services at the lowest cost and at the right time. This value is restricted by
archaic and inefficient working methods involving paper documents and time-consuming tasks. Businesses improve
purchasing by outlining each step in the process, identifying document-dependent manual touch points, prioritizing based
on cost/return, and automating the top priorities first.
A typical manual purchasing process requires handling of multiple documents, such as requisition orders, purchase orders
and confirmations, all of which are copied, distributed and filed by various internal and external groups involved in the
process. A purchasing department is typically in contact with the accounting/finance department, production planning
department or other groups that require goods or services, external suppliers and warehousing. Each purchasing document
must be printed, retrieved from the printer, faxed, sometimes sent via postal mail, photocopied (perhaps several times) and
filed. The process is duplicated with each supplier’s purchase order.
Departments requiring goods or services use the SAP system to create and print a purchase requisition. A purchase validation
request is created and manually printed and distributed. The purchase details are confirmed by hand with a stamp or
other manual means. The purchasing department uses the SAP system to create a purchase order, which is printed and
manually faxed to the supplier. A copy of the purchase order is printed and sent to the warehouse to ensure that it is ready
to receive the goods and confirm correct delivery. Additional copies are manually printed for the accounting department
and the paper-based archive. Suppliers fax order confirmations to the purchasing department, which manually collects
and files the documents and manually sends confirmation emails to the departments requiring the goods or services.
The automated purchasing process includes the same basic steps. This is important to note because Esker solutions do
not disrupt established procedures; they simply automate them. The department requiring goods or services creates a
purchase requisition in the SAP system. A purchase validation request is automatically created and emailed by the Esker
solution to confirm purchase details and approval. The purchasing department creates a purchase order in the SAP system,
which sends an automated fax to the supplier. A copy of the purchase order is automatically emailed to the warehouse
to ensure that it is ready to receive the goods and confirm correct delivery. An automated email is also sent to the
accounting department. The supplier faxes an order confirmation to the purchasing department, which is automatically
received and archived, and an automated confirmation email is sent to the department requiring the goods or services.
Each step is handled electronically, with no manual touch points.
Automated e-purchasing benefits
§ Cut the cost of processing procurement documents by up to 60%
§ Increase PO processing speed by up to 95% for faster procurement
§ Centralize storage of purchasing documents for high availability of supply chain information
§G
ain internal controls for regulatory compliance support and consistency in procurement across the enterprise
§ Strengthen supplier relationships and keep the supply chain running smoothly
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Automated purchasing process overview
Automated
Archiving
PURCHASING
DEPARTMENT
Purchase
order
SUPPLIERS
Fax
Purchase
order copy
SAP
WAREHOUSE
Applications
Email
Purchase
order copy
PRODUCTION
PLAN
Validation process
email form
ACCOUNTING
DEPARTMENT
Email
PURCHASING
MANAGER
Case study
A leading healthcare products manufacturer implemented an Esker solution to deliver documents throughout its worldwide
supply chain. The company saw payback in less than six months, achieved significant productivity gains and improved
communication with suppliers and customers. To supply its facilities in the United States and Europe, the company buys
materials from suppliers on both continents and sells its products through a network of distributors and retailers in more than
90 countries. Before implementing the Esker solution, the company delivered its SAP-generated transaction documents via
manual fax — paper-intensive, labor-intensive and costly.
According to the company’s estimates, the total cost of manually faxing a purchase order was $1.25. Delivering these
same documents via automated fax, the company has reduced this cost to $.25 — saving $1.00 on each purchase order.
With an annual volume of 250,000 procurement/fulfillment documents, they are saving $250,000 per year. In addition,
the company has been able to reassign more than one full-time employee and avoid any increase in administrator or
programmer workloads. Equally valuable, the manufacturer is now able to communicate with its supply chain more rapidly
and responsively.
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Accounts Payable
In a basic AP process, a purchase request is sent to a manger for approval in paper form. The manager or the requester
takes it to an entry clerk and a PO is created, either within or outside the SAP application. Then the PO goes out, in most
cases through the postal network, to the supplier where it is received and processed. The goods or services are delivered,
an invoice is eventually created and sent back, and the accounts payable process begins.
The invoice comes in, again in most cases through the postal network. Employees physically open the mail and determine
where the payable needs to go, which may be through an approval process. Then an individual keys the invoice information
into the SAP application so it can be paid. To make sure the goods were received, someone must to go back to the person
who placed the order to make sure they received the goods or services and were satisfied with them. Manager approval
may be required if the invoice has not been approved for payment, or of it exceeds a certain dollar amount. Then, in many
cases, the invoice is archived in a file cabinet. Many companies have entire rooms filled with file cabinets storing paper
invoices and related documents, which takes up valuable space and can make retrieval difficult.
Esker solutions capture data such as vendor number, purchase order number and due date for routing and indexing
when a fax, email, paper or electronic invoice arrives. No predefined templates are needed. The Esker solution checks
the extracted data to determine whether or not the invoice is associated with an existing purchase order. In the case of
a PO invoice, the Esker solution pulls information directly from the SAP application, either through BAPI or replication, and
compares the invoice content with the PO information. If there is a perfect match, the Esker solution can automatically
send the transaction straight through to the SAP application in a touchless process.
For invoices that do not match up with a PO, the Esker solution can perform the necessary exception handling, such as
checking to determine if the invoice is a duplicate, if there are any discounts that can be applied for fast payment or if
the invoice needs to go through an approval process. Coding may be done, either inside or outside of the accounting
department, at this stage. If any additional approval is required, the invoice can be transferred through the office
electronically. Users know exactly where the invoice is in the approval process, and it gets to the right people for the
necessary approvals to generate the information in the SAP system and book payment as quickly as possible.
Throughout the entire process, whether the invoice is with or without a PO, the Esker solution attaches information inside
the SAP system. Invoice data and the document image are electronically transferred into an archive (either SAP Content
Server, the Esker archive or a separate archiving solution) with a link back into the SAP application for quick and easy
retrieval of the information as needed. A complete audit trail of every step provides the ability to produce a complete
record of all actions that took place throughout processing, using the reporting capabilities of the Esker solution.
Automated AP processing benefits
§ L ower purchase-to-pay process costs by as much as 40–60%
§ Receive and enter vendor invoices up to 75% faster
§ Take full advantage of fast-payment discounts
§ Reduce errors resulting from manual keystroke entry and hand-matching
§ Prevent late and duplicate payments
§ Strengthen credit status
§ Improve response to vendor inquiries concerning invoice status
§ Gain visibility to see who is buying what and how often
§B
enchmark metrics such as vendor cost and employee performance
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Automated AP process overview
1
Incoming invoice
received by email, fax,
paper or via web
2
Data captured, read and made
available for verification
4
Invoice created
— available via
SAP workflow
Email
Fax
Vendor
Invoice
SAP® Solution
SAP®
Content Server
Esker
Archiving
Database
or
Paper & Scan
Web
3
5
Web form validation
Capture accuracy
Vendor exists in SAP vendor Master
Order number exists (for PO invoices)
Duplicate invoice check
Document accessible
via SAP ArchiveLink®
Case study
At a $3 billion international cable manufacturer with a 9,000 employees, AP transactions were all carried out manually
with over 24,000 vendor invoices per year having to be input on the main business system. With paper-based processes,
control and visibility were difficult to maintain. Manual invoice data entry created the risk of keystroke and selection
errors. Searching for matching order lines and delivery note details on larger orders added time for each line item to
be found. All vendor invoices were archived in physical folders. When price and quantity issues arose in attempting
to post an invoice, the physical document was passed to the purchasing department and the AP department lost
visibility. For authorization of non-PO invoices, groups of invoices were taken to a scanner connected to a PC and
each invoice was scanned to a directory as a PDF file, where it was renamed and then copied to a file server. The file
would be emailed to the authorizer, and then placed back on file. A key part of the business case for the project was
to understand and execute the most efficient processes to drive down costs for the business.
With the company’s Esker solution, vendor invoices are received as scanned images. The image is processed by a
business and split into individual invoices, which are then passed to invoice processing rules using optical character
recognition to capture predefined fields. Captured fields are used to create a user form for data validation. The user
form containing the data extracted from the image, along with the image file itself, is sent to an AP specialist for
validation of the extracted data against the invoice image. The specialist validates each extracted data field on the
user form against the corresponding field on the invoice image. Upon completion of the validation process, an invoice
is automatically created in the SAP application. Each invoice is processed through to SAP Content Server, with a URL
link posting into the SAP application. As a result, the company has been able to reduce its paper processing by more
than 98%, leading to full process control and visibility. Requirements for staff resources within the AP department have
also been reduced by approximately 60%. And response times for processing vendor invoices have been dramatically
reduced by cutting the elapsed time required for authorization and query management.
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Conclusion
Organizations running SAP solutions have made a major investment in standardizing business processes. Because documents
play such a vital role in achieving return on the investment, businesses will only achieve full ROI when document processes
are automated. Despite the revolutionary impact of SAP solutions on business processes, many essential documents — sales
orders, customer invoices, purchase orders, vendor invoices and others — remain bound to manual delivery. Significant
cost and time savings, as well as increased customer satisfaction, can be directly attributed to automated processing
(which encompasses both input and output) of these documents.
Intelligent automation technology has made it possible to remove paper from document processes with no applicationlevel modification of SAP solutions. Using patented technology, Esker solutions enable paper-based processes to be
modeled and automated based on content analysis and multiple electronic media options. This automation generates
significant financial gains while shortening business cycles and enhancing customer service.
IT analysts recommend that organizations take a close look at their document processes because valuable opportunities
exist for cost reduction, efficiency improvement and competitive advantages. Research has shown that organizations
with effective document processes are more likely to be profit growth leaders able to respond effectively to a changing
business environment.
With on-premise or on-demand solutions from Esker, businesses running SAP applications are able to:
§ Automate document processing with minimal implementation time, risk and cost
§ Transform manual task into fast and efficient information exchange
§ Reduce average time for order processing, customer invoicing, procurement and vendor invoice processing
§ Reduce (or eliminate) manual data entry and associated errors
§R
educe overhead and paper handling for printing and faxing or folding, stuffing, stamping and physically mailing
documents
§ Gain process visibility and control
§ Eliminate the pain of paper document routing and archiving
§ Make data and documents readily available for customer/supplier service and auditing
§ Improve customer and vendor satisfaction
§ Increase competitiveness
§ Achieve immediate additional ROI for SAP solution investments
Beyond improving communication with customers and suppliers, making business information more accessible and
employees more productive, and reducing demand on administrative resources, document process automation with
Esker solutions is a useful initiative in terms of dollars saved alone.
Learn more about Esker document process automation
Details of automated sales order processing, accounts receivable invoicing, e-purchasing and accounts payable processing
solutions are available in process-specific white papers available from Esker.
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Esker
white paper
About Esker
Esker is a recognized leader in helping organizations eliminate manual processes, gain visibility and control, and reduce the
use of paper by automating the flow of documents into, within and out of the organization. With its comprehensive platform
and patented technology, Esker delivers the advantages of automated document processing either as a powerful onpremise solution or as an on-demand services (SaaS) leveraging Esker-hosted infrastructure. Customers achieve significant
and immediate operational efficiencies, cost savings and measurable ROI in as little as three to six months.
As an established SAP software solution partner with certified integration, and an SAP customer itself. Esker has made
serving the needs of SAP customers a top priority. The results of the SAP and Esker partnership are demonstrated around the
world by SAP customers who have automated document processes with Esker solutions. Esker
has a dedicated R&D team focusing on SAP applications, and a primary objective to offer SAP
customers the best solution for document process automation.
Founded in 1985, Esker operates globally with more than 80,000 customers and millions
of licensed users. Esker has global headquarters in Lyon, France and U.S. headquarters in
Madison, Wisconsin. For more information, visit www.esker.com.
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Madison, Wisconsin
§ U.S. Headquarters
Worldwide Esker locations
Asia § www.esker.com.sg
Esker, Inc.
1212 Deming Way
Suite 350
Madison, WI 53717
Australia § www.esker.com.au
France § www.esker.fr
Germany § www.esker.de
Tel : 608.828.6000
Fax : 608.828.6001
Italy § www.esker.it
Email : [email protected]
Spain § www.esker.es
United Kingdom § www.esker.co.uk
© 2009 Esker S.A. All rights reserved. Esker and the Esker logo are registered trademarks of Esker S.A. in the U.S. and other countries. SAP is a registered trademark of SAP AG in
Germany and in several other countries.
www.esker.com
WP-ESKER-US-006-A