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Predictions of a ‘paperless office’ have been being made publically since 1975[1], but for many organisations this is still a dream, rather than a reality.
Nowhere is this more apparent than in accounts payable departments. Almost three-quarters[2] (71 per cent) of AP organisations state that over half of their invoices arrive in paper format.
Many finance professionals recognise the benefits that the paperless office can bring – reduced admin, faster processes, better visibility, streamlined operations – but are unsure of where the journey begins.
Knowing where you stand when it comes to automating processes and driving paper out from your organisation is a good place to start.
Working with the The Institute of Financial Operations we’ve developed the Paperless Office Maturity Model (POMM). It’s designed to help finance professionals measure their progress towards the paperless office. To know where you want to go, you need to understand where you are today.
From our work together we’ve been able to identify five levels of maturity on the road to automation and a paperless office reality.
Level 1: Paper-Based
A high-cost, transaction-driven environment, which is totally based on paper. There is manual indexing, data capture and workflow, storage is typically in filing cabinets and enquiries tend to be handled in person by phone or email.
It’s a decentralised, disconnected environment.
Level 2: Image-Enabled
What we see here is paper-based invoice receipt combined with front or back-end imaging. There is manual or partial automatic indexing of content and document storage may be either electronic, physical or a combination of the two.
It’s the first step towards automation.
Level 3: Workflow-Driven
This is the jump to electronic invoicing. The operation is at least partially centralised with a move towards consolidation or shared services. Invoices are typically scanned at point of entry and data usually extracted automatically using Optical Character Recognition (OCR). Reporting and workflow processes are automated and indexing of content allows for easy access.
It’s becoming a centralised, connected environment.
Level 4: E-Enabled
The first signs of touchless processing are emerging with significant progress towards full automation. Paper-based receipt and processes have been replaced by imaging and intelligent data capture. There is selective use of electronic data interchange, e-invoicing, PO flip and supplier portals for self-service querying.
It’s a transformed operation, well on the way to full automation.
Level 5: Paper-Free
At last, paper-free nirvana.
All invoices are received, processed and paid electronically. There is close integration with core business systems, such as ERP and ECM, automated supplier onboarding and self-service portals.
Progression from Level 4 to 5 sees the organisation focused on continuous innovation. Using data from processes and suppliers it can develop and evolve operations to add value at every level.
It’s a paper-free operation, analytics-driven and focused on value.
[1] The Office of the Future, Business Week (2387), 30 June 1975: 48–70
[2] 2013 AP Automation Study conducted by The Institute of Financial Operations
This content is provided by an external author without editing by Finextra. It expresses the views and opinions of the author.
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