Streamline Collections by Using Document Imaging Scenarios for Accounts Receivable

1. Streamline Collections
by Using Document
Imaging Scenarios for
Accounts Receivable
John Walls
Verbella CMG
© 2007 Wellesley Information Services. All rights reserved.

2. We Are Here Because …
• Collections in Accounts Receivable can be a very time-
consuming and costly endeavor
Today’s session will look at ways to:
Maximize the effectiveness of collections in Accounts
Receivable
Free up your staff for other tasks simply by giving them
access to documents and information that they need
1

3. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
2

4. Advantages to a Paperless Office
• Simultaneous multiple user access to documents
• Lower costs
Virtually no floor storage costs
No personnel costs involved in filing and retrieving documents
• Electronic documents can be cross-referenced when
they’re filed
Not limited to two-dimensional filing
3

5. Advantages to a Paperless Office (cont.)
• Disaster recovery
Documents are automatically backed up (best practice —
different locations)
• Electronic documents can be used in SAP Workflows
• Electronic documents are easier to produce for audits
They automatically adhere to system-configured retention
policies
4

6. Existing Storage Space Can Be Reclaimed with a Jukebox
128-238 slots
Jukeboxes are common
9.1 GB WORM* Platters — roughly 171,750 images
per WORM using 50 KB per image for a single page
image
* WORM = Write-Once Read-Many
5

7. Greater Storage Space Can Be Reclaimed with HDWO*
Self-healing
Self-configuring Net Apps
Self-administering
CAS Storage
Centera EMC
IBM
DR550
* HDWO = Hard Disk Write-Once
6

8. Cost Associated with the Paper Office
• Companies spend a lot on paper:
$20 in labor to file a document*
$120 in labor to find a misfiled document*
$220 in labor to reproduce a lost document (does not include
any legal penalties)*
• Average document gets copied 19 times*
• 7.5% of all documents are lost (1 in 20)*
3% of the remainder get misfiled
• 90% of corporate information resides on paper
• Over 4 trillion paper documents exist in the United States
alone — growing at a rate of 22% per year
* Source: Coopers and Lybrand/Lawrence Livermore
7

9. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
8

10. Common Terms
• ArchiveLink
A service integrated in the SAP Web Application Server to link
archived documents with the business object entered in the
SAP system
• Knowledge Provider (KPro)
A cross-application and media-neutral information technology
infrastructure within the SAP R/3 Basis (SAP middleware)
Provides the general infrastructure for storing and
administrating documents in the SAP Content Server
• Content Server
Server at the core of SAP’s document storage and
management concept
Provides the technical infrastructure for all document-centric
applications
9

11. Common Terms (cont.)
• Content Repository (means logical archive)
A way to logically manage content, usually by retention period
or by storage media
• Document types
Backbone of ArchiveLink customizing
Are 10 characters in length
Have several functions:
Used to describe the actual image
Can base security on document type
Act as pointers to different logical archives
Workitems are routed to the appropriate processor via
document types in the early archiving scenario
In some cases, it specifies the SAP t-code to launch
10

12. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
11

13. SAP Content Server — Typical Configuration
SAP R/3
SAP Content Server
File system or database
HTTP SAP Cache
(no optical media support) HTTP Server
HTTP
HTTP
No Scanner interface for
SAP Content Server.
Third-party document
capture vendors, like Kofax, Retrieval of documents through the
would be necessary. SAPGUI using the ECL Viewer.
12

14. SAP Content Server — What is It?
• Software for storing structured data (Archive
Development Kit files) and unstructured documents in
repositories
• Product of SAP Web Application Server
• Administration from within SAP, using the following
t-codes: CSADMIN and OACO
• Communication through the ArchiveLink HTTP protocol
• Multiple operating systems support, including:
Windows
Various Unix systems (new as of SAP Content Server 6.30)
• Does not support optical media (no direct scanning
interface)
13

15. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
14

16. Accounts Receivable Department Business Challenges
• Increase operational efficiency and productivity.
Reduce Days Sales Outstanding (DSO), ensuring free cash flow
Minimize bad debt write-off
Process more receivables with same amount of resources
Provide good customer satisfaction through quicker issue
resolution
• Reduce costs of collecting payments!
Have instant access to all documents involved throughout the
ordering process
Eliminate manual, inefficient invoice resolution processing
(faxing and request for documentation)
Reduce the costs for transport and storage of documents
• Comply with legal rules and regulations like Sarbanes-
Oxley Act (US).
15

17. SAP Processes That Could Have Documentation
Inquiry
Quotation
Purchase
Sales Order
Contracts
Sales Production
Orders Orders Goods
Receipt
Picking
Packing
Shipment Group
Deliveries
Deliveries
Goods
Customer Issue
Master
Invoice
Material Accounting
Master
16

18. Challenges in A/R Department
• Customer is missing documentation
• Wrong goods delivered
• Wrong price was invoiced
• Dispute as to whether the goods were received
• Dispute over the payment terms
• Product not to specification
• Wrong quantity delivered
Issue
17

19. Common Issues — Missing Invoices
Quotes and
Customer Master Delivery Invoicing
Sales Order
Contract Contract Original and Invoice
signed delivery
Prices and Prices and Dunning letters
note
conditions conditions
Correspondence
Packing lists
Correspondence Customer PO
Billing
Delivery
Order information
tracking list
confirmation
Trace
Clearance
Correspondence documentation
papers
What invoice?
18

20. Common Issues — Missing Goods
Quotes and
Customer Master Delivery Invoicing
Sales Order
Contract Contract Original and Invoice
signed delivery
Prices and Prices and Dunning letters
note
conditions conditions
Correspondence
Packing lists
Correspondence Customer PO
Billing
Delivery
Order information
tracking list
confirmation
Trace
Clearance
Correspondence documentation
papers
We never
received any
19

21. Common Issues — Wrong Price or Wrong Products
Quotes and
Customer Master Delivery Invoicing
Sales Order
Contract Contract Original and Invoice
signed delivery
Prices and Prices and Dunning letters
note
conditions conditions
Correspondence
Packing lists
Correspondence Customer PO
Billing
Delivery
Order information
tracking list
confirmation
Trace
Clearance
Correspondence documentation
papers
How much?
Is this what we
ordered?
20

22. Displaying Document Flow Within an Invoice
21

23. Document Flow — Display the Original
22

24. Document Flow — Original Sales Order is Displayed
23

25. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
24

26. What are Generic Object Services?
• Generic Object Services (GOS) offer functions that are
available in various SAP applications
The functions are always called and used in the same way to
keep the learning burden for end users low
25

27. GOS Overview
• Create
Create attachment
Create notes
Create external document (URL)
Store business documents
Enter barcode
• Attachment list
• Private notes
• Send
• Relationships
• Workflow
• Subscribe to object
26

28. Create Attachment
27

29. Create Attachment (cont.)
28

30. Display an Attachment
29

31. A Word About Using Attachments
• Technically speaking, notes, PC attachments, and URLs
are treated as SAP office documents
They result in corresponding entries in the SOOD and SOFM
tables
• Contents of the attachments are stored in the SOC3 table
• Contents of the PC attachments are written to the
SOFFCONT1 table
• For more information, refer to:
OSS Note 530792
OSS Note 389366 (if you need to move documents from the
database to an external content server)
30

32. Redirect the Category
• Assign a
content
repository to
the category
that uses the
HTTP content
server
31

33. Redirect the Category (cont.)
• Here you can see
the content
repository is
directed to the
SAP database
32

34. Remove the Menu Option Altogether
• In SM30, table
SGOSATTR
• Edit
CREATE_ATTA
• Replace
Subservice
PCATTA_CREA
with NOTE_CREA
Tip
33

35. Create Notes
34

36. Create Notes (cont.)
35

37. Create Notes — Display
36

38. Create Private Notes
37

39. Create Private Notes (cont.)
38

40. Create Private Notes (cont.)
39

41. Store a Business Document
40

42. Store a Business Document (cont.)
Sales Orders
41

43. Store a Business Document (cont.)
42

44. Store a Business Document — Drag and Drop
Sales Orders
43

45. Store a Business Document — Drag and Drop (cont.)
Sales Orders
44

46. Subscribe to Object — Delivery Note Deleted
45

47. Subscribe to Object — Delivery Note Deleted (cont.)
46

48. Subscribe to Object — Delivery Note Deleted (cont.)
47

49. View SAP Email Notification
48

50. Configure Subscription of an Object
49

51. Workflows
50

52. Workflows (cont.)
• You can request a workflow overview of running or
executed workflows for which an object is or was
involved
You can use this feature within sales orders to view who
approved the order
• You can start a workflow that uses an object
The system automatically determines all suitable workflows and
offers them for selection
You could use this feature from within the invoice transaction
to route a workflow to the Account Executive for invoice
resolution
• You can even search for workflows in the database or
in archives
51

53. External Third Party Required for Barcode Archiving
• Requires an external scanning client
• If you use third-party content management solutions that
are ArchiveLink-certified:
Their scan clients can handle barcode archiving
Example:
OnBase, IXOS, IBM, FileNet, Documentum, etc.
• If you use the SAP Content Server:
No scanning interface is supplied
Standalone imaging software that has an ArchiveLink-certified
interface is required
Example:
Kofax Ascent Capture*
* There may be other vendors unknown to speaker. Please do your own research.
52

54. Late Archiving with Barcode
53

55. Late Archiving with Barcode (cont.)
54

56. Late Archiving with Barcode (cont.)
55

57. Processing Solution Steps
Images
SAP
Scan Release
Validate Content
Server
Barcode is Barcode and
read image are
released
to SAP
56

58. Barcode Example with the SAP Content Server
57

59. Barcode Example with the SAP Content Server (cont.)
58

60. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
59

61. Outgoing Documents — Customer Invoices
• Snapshot in time
• Saves on processing time
• Retrieve the exact copy of the invoice that was sent to
the customer
• Used heavily in data archiving
Retrieval strategy
• Very difficult to reprint outgoing documents if they have
been archived
• Can access them through a customer self-service portal
after they have been stored
60

62. GOS — Attachment List
61

63. Select the Attached PDF Invoice
62

64. Invoice is Displayed
63

65. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
64

66. Proof of Deliveries — Signed
• Scenario
Customer calls into the call center and disputes receiving
goods, and in turn, the invoice
• Solutions
Capture signed delivery note quickly and effortlessly using as
much automation as possible
Print delivery notes with barcodes so they can be scanned
quickly and linked back to the appropriate transaction
65

67. Automated Delivery Capture
Delivery
documents are IIIIIIIIIIII
generated Customer
Signature
1 2
1
3
Delivery
Documents
4 4
SAP uses barcodes to
automatically link the
image to the correct
Archive Server
transaction 66

68. Understanding the Barcode Concept
SAP
Barcode is entered Barcode number
with SAP and SAP key
transaction fields added to
BDS_BAR_IN table
SAP
Scanning SAP processes new If a match is found,
software entries in both of both entries are
these tables looking deleted and an entry in
Document is for matching
scanned and the link table TOA01
barcodes is made
barcode is read
Integration
Doc ID and
Image and barcode
barcode are sent to
are sent to
SAP BDS_BAR_EX
archive server
table
67

69. Function Module ALINK_BARCODE_INSERT
68

70. Results of the Function Module
1
2
3
69

71. Capturing Invoices from a Handheld Device
• Original business process
Drivers used handheld devices to take orders and provide
service
Customer got original printed copy from driver
Printed invoices on three-part form, resulting in poor copies
Signed invoices were mailed in at the end of the week
Invoice scanned in by three operators, sometimes months later
Invoice stored in separate system by route, date, and customer
(same as SAP)
70

72. Customer Pains
• Third-generation invoice copies very hard to read
• Expensive three-part NCR forms for printing invoices
• Signatures became optional (10% were missing)
• Missing invoices (misplaced by driver)
• Very large expense for mailing in the signed invoices
• Three scan stations, resulting in mountains of paper
• Very unreliable storage system
• Customers would refuse to pay with no proof of delivery,
resulting in increased DSO
71

73. New Business Process
• Intermec device accepts a download file created by an
SAP program — each file is unique to each route
File contains all the information about the customers on the
route, including pricing, balances, products, and equipment
• When driver makes a sale or provides service, the
Intermec device creates a sales order or service order
This order later becomes an SAP sales order
• Customer signs and receives a signed, printed invoice/
service order
• Upon the drivers return, three basic things happen:
Sales information is uploaded into SAP, creating the
sales order
Image is uploaded with the signature to the content server
Next day’s route information is downloaded
72

74. Look and Feel
73

75. Look and Feel (cont.)
74

76. Far-Reaching Benefits
• Much smaller image size when using a 40K logo overlay
1,734 invoices on average = 68,000K or 68M saved per day
• Smaller image size
Much faster processing during the upload into the archive
server
Quicker retrieval times for the end users, many of whom are
dial-in users
• Flexibility
If the layout of the document provided by MobileTech changed
over time, new versions of the form could be created without
affecting earlier versions
75

77. Statistics and Benefits
• Invoices are signed and uploaded by 10 am the following
day
• 3 scanning workstations now down to 1 for occasional
manual invoices
• Improved images
• Number of deliveries/invoices per day averages 1,734,
and processing time is less than 10 minutes
• Number of total invoices archived is 2,397,186
• Started in May 2001
• Actual processing time for 1,734 invoices was 3 minutes
• Average image size is 8.8KB (40K with overlay)
Compared to 50-60KB for a scanned .tif image
• DSOs went from 44 to 32 days, which is a 27.5%
decrease
76

78. Ongoing Projects — A/R OCR for Customer Checks
• Pains — A/R Optical Character Recognition (OCR)
project for incoming customer checks
Five day lag time in processing the checks
Limited to processing 600 checks per day
Two processors and five part-time processors to keep up
Two processors work overtime on the weekends
Resources could be reallocated to collections
Time is wasted in collections when calls are made about
checks already received but not yet processed
Checks are physically deposited at the bank daily
Issue
77

79. Ongoing Projects — A/R OCR for Customer Checks (cont.)
• Assumptions
Currently no lockbox (too much money)
OCR will extract data from incoming customer remittance
Remittance image will be stored on the archive server
Exceptions are routed via SAP Workflow to processors
to handle
Actual checks will be scanned with a check scanner
Read and transmitted to the bank
Currently in the functional specifications stages
78

80. A/R OCR Incoming Checks Project
• Goals
Images of the remittance are stored on the content server
Exceptions are routed via SAP Workflow to processors to
apply manually
Reduce processing time down to one day from 13 days
Reallocate resources to collections (four FTE down to two)
Monies are deposited to the bank faster
79

81. F-28 Traditional Single Check Entry Screen
80

82. Rules-Based vs. Template-Based OCR
• Rules-based
Entire document is scanned and processed via OCR and
searches for keys “Phrases or Expression”
Keys are then used to logically locate content
Once configured, it’s most likely that all header information on
new invoices can be read
OCR rates are .5 to 5 seconds
Much faster because you are not using templates
81

83. Rules-Based vs. Template-Based OCR (cont.)
• Template-based
Each customer remittance must be maintained as a template
New templates are created when customers change formatting
in their remittance
New invoice will not be read
OCR rates are 8-12 seconds
Templates need to be stored in a database
Thousands of templates could cause performance issues
during the OCR process
82

84. OCR Processing Solution Steps
Document
OCR SAP Images
Rules Database
SAP Content
Server
Data
Scan Extraction Validate Release
Manual or SAP
Automatic Workflow
83

85. Validations
84

86. Validations (cont.)
85

87. Validations (cont.)
86

88. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
87

89. Common Mistakes
• Not archiving outgoing documents
• Not monitoring the open barcode tables
• Not managing the production of barcodes
• Not utilizing the content server for imaging
• Too many desktop scanners in one location
• Multiple makes and modules of scanners
• Too many document types and inconsistency in naming
• Too many individuals with delete access
• Allowing users to create attachments through GOS using
KPro and storing attachments on SAP database
88

90. Best Practices
• Single point-of-contact for producing and monitoring
barcodes
• Choose the correct scanner for the volume and the
situation
• Stay with the same brand of scanner
• Use USB 2.0 over SCSI
• Use ISIS drivers over TWAIN
• Know your retention periods
• Inquire about document security issues before
configuring
• Archive outgoing documents whenever possible
• Create a test content repository or content server
89

91. What We’ll Cover …
• Advantages to document imaging
• Common terms
• Architecture
• Business challenges
• Generic object services
• Simple archiving scenarios
• Complex archiving scenarios
• Common mistakes and best practices
• Wrap-up
90

92. Resources
• www.Credit-to-Cash-advisor.com
Click Articles and then search for “Days Sales Outstanding”
• www.Verbellacmg.com/scanners
Information on scanners and data sheets
• http://help.sap.com
ArchiveLink scenarios
http://help.sap.com/saphelp_erp2005vp/helpdata/en/93/51b
7569e0811d1a55e0000e82deaaa/frameset.htm
Administration of the SAP Content Server
http://help.sap.com/saphelp_47x200/helpdata/en/65/3359aa
935ad5408d49a1b6e8aa50bd/frameset.htm
91

93. 7 Key Points to Take Home
• Electronic images are easier and cheaper to manage and
provide extended flexibility
• Document imaging can be implemented quickly and cost
effectively using standard SAP scenarios
• SAP Content Server can be used as a reliable document
management system
• Barcodes can be used to streamline and automate the
imaging process
• GOS have many functional applications
• OCR does not have to be used for A/P only
• Use ArchiveLink over KPro
92

94. Your Turn!
How to contact me:
John Walls
John.Walls@Verbellacmg.com
93