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Document Management

How to streamline your accounts payable operations

How intelligent data capture can replace paper with efficiency and create opportunities. By Robert Banwart

T

here is a continual demand for change within the healthcare delivery system that reaches down to every level of operations. Healthcare reform leg- islation has called for a consolidation of hospital systems, upgraded IT infrastructures and the implementation of new technologies that relieve the administrative burdens placed on operational management and staff. Accounts payable was no exception, and opportunities for streamlining and belt tightening will always exist. According to the Institute of Financial Operations (www.financialops. org) – a trade organization devoted to operational insights and best practices for back-office operations – manual keying of data is inherently problematic, with one in 40 keystrokes producing an uncorrected error. These errors can potentially disrupt supply chain, strain vendor relations, incur late pay- ment penalties, cause duplicate payments and more. According to Lawrence Livermore Labs, lost documents – a common hazard when trafficking paper throughout a large organization such as ours – cost an average of $120 each to replace (www.inc.com/magazine/19930501/3531.html). Aberdeen Group (www.aberdeen.com), a business intel- ligence research firm, finds that a streamlined, best-in-class accounts payable operation will process an invoice, on average, in about one-sixth the time, at about one-twelfth the cost, of so-called “laggards” in a similar situation. In answering the call for operational improvements,

Resurrection Health Care explored the strategic benefits of automating or outsourcing the slow, manual data entry routine that had burdened our accounts payable operation. Deciding that outsourcing the process would carry too many long-term costs, and concluding that e-invoicing would not offer a suitably comprehensive alternative, we turned our attention to capture-based automation technologies, in the hopes that efficiency might be obtained through the elimination of paper. We were looking for a product that would actually enable us to affect the bottom line – to take work out of the system and, as a result, enable us to allocate

16 November 2012

full-time employees (FTEs) elsewhere. We were looking for hard-dollar, bottom-line savings.

Our financial and IT management organized a practical test to evaluate available options; the test included a number of optical character recognition (OCR) products from such vendors as Kofax, EMC-Captiva and Brainware. Our approach was simple: We would invite each vendor to come on site at Resurrection, provide each of them with a sampling of invoices – 100 actual documents, reflecting a typical range of formats, including possible errors and inconsistencies, which we might handle on a given day – and observe their systems’ capabilities for processing and reconciling the data. Upon completion of these live demonstrations, we deter- mined that Brainware’s intelligent data-capture technology clearly demonstrated the ability to reduce costs throughout the accounts payable process. It could take a transactional document, extract the key header and line-item information and process it for payment without requiring our staff to intervene manually.

Brainware’s unique value proposition extended from the fact that the software did not require templates; its abil- ity to integrate with our existing systems and extract key information from a variety of formats almost immediately was unique among the vendors. They used a small, generic sampling of invoices to “teach” the technology how to identify an invoice, locate the data we needed, verify its accuracy relative to other line items on the document and validate it against internal sources (such as a purchase order database) as per our requirements. With thousands of suppliers in our database, each issuing their own unique invoices – including many through various electronic means, such as PDF – cre- ating a unique template, or set of rules or “anchors,” would place a burden on my staff that could potentially negate the benefits of automation, at least in the near term. Resurrection contracted Brainware to implement the software on Microsoft SQL Server for processing accounts payable documents into our McKesson ERP system.

HEALTH MANAGEMENT TECHNOLOGY www.healthmgttech.com

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