By Daniel Hunter
New independent market research by industry analyst, Redshift Research, on behalf of Eclipse Group has found that finance staff are still struggling to eliminate paper from the finance department.
The survey, which samples the views of 200 financial decision makers, found that despite the fact that 88% of respondents consider removing paper to be important, just one third of documents within the finance department are scanned; whilst almost half of all purchase and sales invoices are still paper-based.
Furthermore, 46% of organisations are still manually re-keying purchase invoices into the accounting system; and 35% are still manually moving invoices around the organisation for approval.
The vast majority of respondents recognise the benefits an Electronic Document Management System (EDMS) could deliver, from cost savings (54%) to efficiency gains (46%) and reducing storage (30%). Almost one fifth of those surveyed (19%) also cite the green agenda and accuracy (18%).
Yet despite this, 51% of respondents have no plans to invest in EDMS, with two key reasons for non-adoption based on misunderstanding. Indeed, over a third of respondents (34%) cite fear of data loss as a barrier to adoption; yet as long as correct back-up procedures are in place, Eclipse Group believes the process of scanning and storing documents is actually far more secure than traditional paper-based processes. Invoices are scanned, saved immediately to disk and backed up to a different location, creating two records, one of which is often off-site.
A third (33%) of respondents also believe that auditors require paper documents. Yet according to Eclipse Group, on the basis that HMRC has approved the use of scanning solutions there should be no major issue with auditors.
There are instances where organisations or auditors may prefer to retain the original documents — for example, for Direct Debit mandates — but these can be scanned and the originals stored securely off-site. From an auditor’s perspective, not only can scanned images be printed at any time if required, but the real-time search facility transforms the audit process, reducing time and costs for the business.
“The majority of organisations are already scanning some documents as they arrive in the building, so why not extend the model and take a strategic approach?" Gary Waylett, CEO of the Eclipse Group, said.
"Removing the most labour intensive element of the finance process, namely the handling of in-bound and out-bound paper invoices, not only delivers immediate cost savings but provides a raft of opportunities to drive further benefits — from improving payment timescales to eProcurement.
“It is time to stop this half-hearted, somewhat haphazard approach to document scanning — and to address incorrect assumptions about EDMS. Scan all finance-related documents; store them securely in a repository; put in place workflow to streamline invoice approval; automate the creation of relevant accounting transactions; integrate with the finance system and finally close the loop by generating all finance department outputs (sales invoices, statements, purchase orders, remittance advices etc) electronically.
"From a possible 90% reduction in invoice processing time, to meeting new payment regulation, effective management of electronic documentation is the key to realising the goal of finance automation.”
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