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Closing the Order-to-Cash Performance Gap
Between Document Processes and ERP Systems
www.esker.com
ESkER DElivERywaRE
Introduction .......................................................................................................................................................................................3
Document Processes in the Order-to-Cash Cycle .................................................................................................................4
The Esker DeliveryWare Solution ...............................................................................................................................................9
Automated Sales Order Processing .........................................................................................................................................10
Sales Order Automation Benefits .............................................................................................................................................12
Case Study: Kimball International ...........................................................................................................................................14
Automated E-Invoicing .................................................................................................................................................................16
DSO Advantages ..............................................................................................................................................................................19
Case Study: Visy Industries ........................................................................................................................................................20
Creating a Successful Implementation ..................................................................................................................................22
About Esker ......................................................................................................................................................................................23
Table of Contents
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Enterprise resource planning (ERP) applications standardize enterprise operations and support effective business management strategies, empowering companies to automate many processes formerly done by hand. But in many companies there is a gap between this automation and the documents that drive business processes. Some companies have implemented technologies to address this issue, but often only to a limited degree and/or through multiple point-to-point systems.
as long as document processes remain manual, rely on paper and lack transparency for a view of daily activities, businesses will face barriers to performance improvement. Nowhere is this more apparent than in the order-to-cash cycle of sales order processing and customer billing.
Performance in the order-to-cash cycle is a crucial benchmark of value with ERP solutions. if there’s a single characteristic that distinguishes high-performing companies, it is efficiency in the order-to-cash cycle. When companies examine ways to gain efficiencies and competitive advantages in a constantly evolving business world, document processes within the order-to-cash cycle emerge as key enabler of best practices for performance improvement.
Reducing the time it takes to turn an order into money in the bank offers strategic benefits to the company while strengthening customer relationships. Beyond cost savings, companies converting to an automated document processing system can realize efficiencies throughout the order-to-cash cycle.
along with reducing operational costs, freeing staff to spend more time on customer service activities and improving accuracy, automation of order-to-cash document processes gives companies more control and insight into what is happening on a daily basis. these factors help companies better manage customer relationships and gain competitive advantages as a result of prompt, accurate order fulfillment and billing as well as responsiveness to customer inquiries. Companies also gain support for compliance with regulatory requirements, control of finances and sales forecasting, greater visibility into business processes and improved overall profitability.
this white paper explores the challenges faced today by companies who have invested in ERP solutions but are still manually processing sales orders and billing documents. it also examines the outcomes of order-to-cash automation — including time, labor and cost savings. In highlighting a unique platform that integrates end-to-end document process automation with ERP systems, this paper covers:
§ Inbound customer orders and outgoing billing documents as part of the order-to-cash cycle
§ Key challenges: reducing order fulfillment time and Days Sales Outstanding (DSO)
§ Overcoming those challenges: process improvement through automation
§ What the solution looks like
Companies today also recognize that they must deliver outstanding customer service in order to acquire new customers and retain existing ones. The ability to fulfill orders accurately and on time, and to respond quickly when customers have billing questions, is at the core of this service model. Capabilities such as the ability to monitor order queues and identify top-priority orders are also key to enabling best practices for performance improvement.
with manual document processing, customer service suffers from the large amount of time spent chasing paper every day. Companies often have a backlog of several days to enter orders. human error is also a concern, as manual processing results in incorrect order entry, returns and billing disputes. Orders and billing documents can easily get “lost in the system.” and as the volume of customer orders increases, the level of staff must increase.
As a resource to help businesses gain efficiency and improve performance in today’s competitive environment, this paper is designed to assist customer service managers, finance professionals, executive managers, business analysts and it professionals in learning about, planning for and evaluating order-to-cash document process automation.
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Introduction
What is order-to-cash?Order-to-cash is a generic term used to encompass the business cycle that starts with the reception of a customer sales order and ends with collection of accounts receivable generated in the sale of the final product. Sub-processes within the order-to-cash cycle include receiving, entering, approving and fulfilling sales orders, as well as billing for the orders and collecting payment.
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Conventional order processingUsing manual document processes to orchestrate order-to-cash operations creates heavy administrative burdens along with the potential for incorrect shipments and cash collection delays. Manual processing of sales orders is inherently labor-intensive, time-consuming and error-prone, requiring valuable resources to manage each part of the process.
Using conventional methods, it can take hours to prepare, enter and store a sales order. and one wrong keystroke during data entry, such as inputting 100 units instead of 10 units, could become a nightmare for you and your customer. all activities down the line, including invoicing, will be affected — and cash collection can be delayed. inevitably, human errors cost companies both time and money.
Within the order-to-cash cycle, sales order entry needs specific attention as it represents potential bottlenecks that can cause huge inefficiencies and significant costs directly affecting the bottom line.
Sales order bottlenecksIntegrity of the sales order is crucial to achieving and maintaining high efficiency throughout the order-to-cash cycle. if you begin with inaccurate or ambiguous information, performance will suffer. all activities are affected by the information that is pulled from the sales order.
when companies receive customer purchase orders, the nature of the processes they use to create sales orders in the ERP system and handle workflow can determine how much efficiency they are capable of achieving. Once the information is entered into the ERP system, there are issues of how to handle exceptions and how to keep track of order status. And when customers call to find out if their orders have gone through or to check the status of their orders, it means tracking down whether the order is still on the fax machine, with the rep, already entered into the system, etc.
How conventional order processing affects business efficiency:
§ Delayed cash collection
§ Expensive execution (often costing between $30 and $60)
§ Slow fulfillment
§ High vulnerability to errors
§ Low customer satisfaction
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Document Processes in the Order-to-Cash Cycle
SALES ORDERENtRy
APPROVALORDER
FUlFillMENtINVOICING PayMENt
SALES ORDER PROCESSING
E-INVOICING (E-BILLING)
Your Customers Your Company
CustomerOrder
CustomerInvoice
ORDER-TO-CASH
PAYMENT
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A maze of manual touch pointsin many companies, sales order processing travels through a labyrinth of departments and manual touch points for order preparation, data entry and archiving. Upon the arrival of a sales order, staff collect orders from a shared fax machine or printer, collate them, keep the paper copies and store them along with associated documents for later retrieval as needed. Manual data entry is required for sold-to number, quantities, part numbers and other key fields.
Sales representatives and administrators can only hope that none of these manual touch points cause misplaced orders, delays in fulfillment and payment, or errors and returns of incorrect shipments that end up in the customer’s hands, resulting in customer dissatisfaction and loss of business. the ideal solution automates every phase of the process to eliminate as many manual touch points as possible.
Prioritizing ordersMany companies process orders on a first-in/first-out basis, which fails to account for priority of sales orders according to customer or product line. Certain customers and products may take priority over others, but all orders go through the same process. Orders might sit on a fax machine until they are collected by a receptionist once an hour and then hand-delivered. in addition to helping companies share resources to process orders faster, automation can help them recognize when orders from key customers, or for key products, come in. this capability can result in competitive advantages if companies can respond to top customers faster, ship orders sooner and be more proactive.
ArchivingCompanies also spend a significant amount of time retrieving orders and order data for internal or external audits and to satisfy the requirements of regulatory frameworks such as the Sarbanes-Oxley Act. Orders may arrive via fax with the risk of getting lost at the fax machine and thereby delayed. Receiving orders automatically can enable companies to archive orders electronically. Automated archiving offers major benefits in helping companies support regulatory compliance and avoid the hassles of filing and retrieving order documents.
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CustomersSalesOrder
Order Confirmation by Fax To bearchived
Goods & Delivery Bill
Delivery Bill Copy
Invoice
To bearchived
ProductionShipping
SalesDepartment
Sales OrderCopy
InvoiceCopy
AccountingDepartment
To bearchived
SalesDepartment
Customer Verification & manual entry
of content
Manual Touch Point
ERP Applications
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Time and costs associated with manual sales order processingthe table below summarizes the number of documents that are manually handled in typical sales order processing. the minimum time estimate is 17 minutes.
For 1 Sales Order Time Taken
9 documents manually printed
17 minutes
4 documents manually archived
1 document manually faxed
1 document manually mailed
the table below summarizes the typical costs of manual sales order processing. the $30 estimated total cost is a minimum and can range as high as $60 or more.
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Conventional invoice processingvirtually all businesses running ERP applications want to move to electronic delivery of customer invoices and supporting documents. the advantages of e-invoicing are clear: it’s faster, less expensive and more reliable, and it takes the inefficiency of paper out of the process. And by increasing the speed and accuracy of billing through document automation, organizations can collect cash faster because billing documents are delivered sooner.
as illustrated by the following diagram, conventional processing of customer invoices involves numerous steps that take time and consume resources — both human and material. Manual touch points at nearly every step of the process represent costly inefficiency in comparison with e-invoicing.
it analyst research has found that the average U.S. company can save millions of dollars annually by sending invoices electronically. Beyond cost reduction, businesses want to increase billing process efficiency and improve customer satisfaction. the percentage of electronically delivered business-to-business invoices is rapidly increasing as companies seek additional ROI from ERP software.
E-invoicing technology is available today, and the investment required for implementation is relatively low. But a key obstacle stands between many companies and e-invoicing benefits: customers.
While some customers understand that they can benefit from e-invoicing as well by moving money faster, reducing accounts payable overhead and eliminating manual handling of supplier invoices, many are simply not ready to change processes that are set up to handle paper invoices. and many customers will not pay invoices before they receive proof that their orders were delivered.
Research has shown that a majority of customers still prefer to receive their invoices and associated documents via postal mail. to satisfy this preference, businesses spend large amounts of time and money maintaining internal mailrooms or working with external mailhouses. Employees and departments continue to manually print and manage paper documents for mailing. Cash is tied up in equipment, supplies, maintenance and labor to support mail operations. Forward-looking companies recognize that the future of their mailroom holds only more and more capital expense.
Proof of delivery and other billing documentsSending invoices actually represents only a small percentage of the tasks involved in billing and cash collection. what often hinders the process most is the inability to assemble and send packages of billing documents in a timely way to support the invoice. This is significant because frequently customers will withhold payment of invoices until they receive certain documentation that provides proof of delivery.
the range of documents generated throughout a business transaction, establishing the fact that a recipient received a shipment sent by another party typically includes not only delivery receipts but also quotes, purchase orders, pick lists, packing slips, external shipping manifests, customs forms, tax documents and more.
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CUSTOMER
ERP APPLICATIONS
Printing Copy forarchiving
Folding, stuffingin envelope
Stamping Postal network Distribution
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The challenges of manual billingManual billing processes pose a variety of challenges for companies today. these include:
§ High operating costs. Manual billing involves numerous steps that consume time and resources. these steps include everything from document printing and sorting to photocopying to folding and stuffing documents into envelopes for mailing.
§ High dispute resolution costs. Collections staff spend hours chasing payment when customers claim orders were not received or were incorrect, or they did not get the necessary supporting documentation with the invoice. Documents must be retrieved from customer service and the warehouse or courier, then resent to the customer to resolve the dispute.
§ Delayed payments. The time required for manual document processing and delivery delays cash collection because some customers will not pay until they receive proof of delivery, inflating Days Sales Outstanding (DSO).
§ Increased risk of human error. Because manual systems are dependent on human involvement, there is a greater chance for errors, including misplaced or lost documents.
Manual invoice delivery time and cost example
handling time 3.9 minutes
transit time 1 to 2 days
Cost of sending an invoice $1.60
To overcome these challenge as well as to improve overall operating efficiency, one solution that more and more companies today are embracing is electronic storage and delivery of billing documents. By moving from manual to automated processes, businesses are able to improve order-to-cash performance and strengthen bottom-line profits while avoiding costly disputes.
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For companies seeking to improve order-to-cash performance, there are a variety software products marketed as solutions for automated sales order processing and invoicing. Only one solution offers patented DeliveryWare Rules technology and a full range of inbound data capture and outbound document transport capabilities. By effectively reducing the time between receiving a customer order and collecting payment for the order, Esker Deliveryware helps companies achieve additional return on their investments in ERP applications.
End-to-end document process automationEsker DeliveryWare offers a comprehensive solution that streamlines document processes from start to finish by eliminating inefficient steps, making communication more efficient, personalized and cost-effective — regardless of the information source or type of delivery transport. integrating non-intrusively with ERP applications, Esker Deliveryware minimizes the touch points in order processing without disrupting current business operations.
Designed to optimize internal and external information flow into and out of ERP applications, Esker DeliveryWare is an end-to-end document process automation platform. Managing all inbound and outbound document processes through this central platform simplifies the IT infrastructure, reduces the time and costs associated with document communication and streamlines the order-to-cash cycle.
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Esker Deliveryware automatically captures invoices and other documents in any format — independent of layout and application or source, without the need for custom programming.
Patented Esker technology automatically recognizes and extracts data to deter-mine formatting, conversion, and routing conditions and actions as defined by processing rules.
Esker Deliveryware distributes documents automatically, based on specific requirements. Documents can be delivered to multiple recipients in a full range of formats and media.
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The Esker DeliveryWare Solution
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DO
CU
ME
NT
CA
PT
UR
E
1
Paper Documents(scan)
Faxes
E-documents(XML, IDoc, …)
Fax & Mailon Demand
Fax
Archive
XML
SMS
Web Publishing
DO
CU
ME
NT
TR
AN
SP
OR
T
3
s o
2 DELIVERYWARE RULES ENGINE
Sales Orders Confirmations Proposals Contracts Accounts Receivable Purchase Requisitions Invoices …
Invoices Purchase Orders Remittance Advice Confirmations Letters Quotes Reports …
s o
UN
IVE
RSA
L APPLICATION CON
NE
CT
OR
S
ERP, CRM
Document Capture DeliveryWare Rules Engine Document Transport
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incoming sales order documents launch the order-to-cash cycle. Fast response to orders helps businesses increase customer satisfaction and ensure on-time delivery as well as timely customer payment. Customer orders need to be entered and confirmed quickly to allow for efficient delivery. Up-to-date information on the status of customer orders is crucial for effective customer service as well as sales management and forecasting.
to optimize inbound sales order processing, these three essential areas must be automated:
§ Inbound document capture to eliminate manual data entry and handling of paper
§ Workflow to coordinate approval and other activities throughout the order lifecycle
§ Access to documents and information about the process
Key financial management benefits of automating all of these areas include real-time cost control, budget control, sales monitoring and forecasting. this level of automation also enables businessess to:
§ Increase speed and responsiveness — make the entire process quick and efficient
§ Reduce operational costs — remove manual administration by adding business rules to corporate forms
§ Reduce per-transaction costs — streamline throughput and save money while improving service
§ Gain a clear view into the process — use and share the information for more effective management
§ Realize rapid return on investment — reduce costs and improving controls boosts the bottom line
§ Ensure high-quality presentation — apply consistent rules to all your online and offline processes
Automation minimizes the amount of manual labor and the number of keystrokes required to complete order processing. these capabilities can yield millions of dollars in savings by reducing the number of touch points at each step of the process, and by providing the ability to identify and resolve bottlenecks within the process. and businesses can improve the customer experience by increasing speed and responsiveness. Orders received by a certain time can be entered the same day for more on-time shipments.
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Automated Sales Order Processing
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ERP ERP
SHIPCREATEMANAGERECOGNIZECAPTUREPREPARERECEIVE
Sales Order Process Audit Trail
Fax
Batch prep.
Scan
Split
Enhance
Extract data
Validate
Complete
Clear exception
Comments
Create
Archive imageRelease
for shipping
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Automated sales order processing with Esker DeliveryWare
Time and cost savingsthe bottom line is substantial savings of time and money. Estimated total cost of processing a sales order with Esker Deliveryware ranges from $1 to $3.
For 1 Sales Order Time Taken
1 document automatically printed
1 minute
2 documents automatically archived
1 document automatically faxed
1 document automatically mailed
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SalesOrder
SalesOrder
Order Confirmation
automatically sent by fax
ProductionShippingDelivery Billautomaticallyprinted at the production facility
AccountingDepartmentDelivery Bill copy automaticallysent by email
SalesDepartmentSales Order and Invoice copy automaticallysent by email
Web FormValidation
Goods & Delivery Bill
InvoiceERP
ERPRepository
Esker DeliveryWare Archiving DatabaseAll documents are automatically archived
ERP Applications ERP Repository
DeliveryWareArchiving Database
or
1 Incoming Sales Order received by fax, email, paper or via the web
3 Web Form Validation
2 Esker DeliveryWare captures, reads and makes data available for verification
4 Esker DeliveryWare Order Management Module creates sales order available via tracking solution
CaptureCapture
ReadRead
ValidateValidate
Capture accuracyCustomer exists in ERP master data Product part number exists
5 Sales Order is available from the ERP system as a web link
or
Customer Customer
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Effectively eliminating manual processes, Esker Deliveryware reduces the time from receipt of a sales order to payment of the invoice. Businesses running ERP applications and Esker Deliveryware are able to:
§ Lower order processing costs 40–70%
§ Reduce order processing time 40–90%
§ Increase the percentage of orders and order line items captured electronically
§ Prevent lost or misplaced orders by keeping them electronic throughout their lifecycle
§ Free-up staff time by as much as 65% so they can focus more on customer service
§ Increase data entry accuracy by up to 99%
§ Reduce returns and waste, which directly affects the bottom line
§ Avoid having to add staff as order volume grows
And process control with Esker DeliveryWare results in significant benefits both for business management and system administration, including:
§ Leverage of existing systems
§ Simplification of the IT infrastructure
§ Comprehensive customer order monitoring and prioritization
§ Order traceability and automated routing
§ Process data for customer profitability and employee performance analysis
§ Less redundant processing of duplicate orders
§ Electronic capture of approvals
§ Auditing of delivery or billing block processing
Real results achieved by Esker customers
§ Order processing time reduced from 10 minutes to 60 seconds
§ 76% faster processing of orders compared with the manual process
§ Increased orders processed per hour from 5 to 50
§ Cut order delivery times from 4 days to 1 day by recognizing and processing orders for key products immediately
§ Reduced DSO rate by 10%, representing hundreds of thousands of dollars
§ Cut large-volume invoice sending time from 4 days to 45 minutes
§ Went from 3–5 hours to 5–10 minutes to complete 6–12-page orders with up to 300 line items
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Sales Order Automation Benefits
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Workforce flexibility and scalabilityAlong with capabilities to process orders faster and smarter, companies are looking to create a more flexible and scalable workforce. they need to be able to redeploy resources in response to changing business trends, and they need technology to help them to do this. in addition, many companies need to be able to redistribute order processing operations on a global basis in case one site goes down, so they need technology that is standardized and provides the ability to shift processing to another site if a disaster occurs.
also, because volume of orders for some products are subject to seasonal demand or other business trends, certain reps may receive much higher order loads than others at different times of the year. Companies need a way to share this load and make the most effective use of resources. Esker Deliveryware helps by providing reporting capability to track order volumes and enable shifting of staff to different product lines.
And in a typical manual process, orders sent directly to a rep by email might sit in the queue for a few days if the rep is out sick or on vacation. Reps won’t always remember to set their out-of-office messages or log in remotely to forward orders to other reps who can cover them. automation with Esker Deliveryware offers the means to ensure that orders can be re routed or handled by other reps, thus avoiding delays for customers.
Making the most of EDI and IDocas part of e-commerce initiatives, many companies have implemented electronic data interchange (EDi) to automate capture of incoming sales orders. But in the typical scenario, companies use EDi only for their largest customers — often through custom-configured channels of data exchange set up for each customer.
with its ability to capture data from orders received by fax, mail (paper), email and print as well as electronic documents, Esker Deliveryware not only supports existing EDi structures but enables companies to leverage additional value from them by expanding the range of information sources from which EDI or IDoc files can be generated. Esker DeliveryWare helps businesses fill the EDI automation gap and increase the percentage of order volume processed via EDI to gain additional efficiencies without altering their existing business procedures or IT infrastructures. With Esker DeliveryWare a business is able to treat all of its customers, large and small, as EDi-enabled — even if they are not.
and for non-EDi transactions, Esker Deliveryware can feed order information directly into ERP applications via aPi mechanisms.
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ChallengeThe National Office Furniture business unit of Kimball International, a leading furniture and electronics manufacturing company, had an objective to support increased order volume without increasing staff, while National launched new products requiring order shipment within 24 hours.
in doing so, they were looking to replace a legacy fax server with a solution that would integrate with the company’s ERP system to automate order processing for non-EDi-enabled customers, identify and expedite high-priority orders, and enhance the customer experience.
the company was using a network fax server to capture incoming faxes and send them to a printer. in effect, the printer served the same role as a traditional fax machine. From there, an employee took the faxes off the printer and manually delivered them to the appropriate customer order clerk. These clerks were assigned specific regions, making it very important for the person delivering the faxes to sort and distribute the documents carefully. the clerks hand-keyed the information from the documents into the company’s ERP system.
Given the company’s high order volume, it was not uncommon for sales orders to sit on a customer order clerk’s desk for a few days before being entered into the ERP application. if there were errors on an order, such as incorrect prices or item numbers, it took even more time to process. And after the order was processed, customer order clerks filed the documents into one of 15 large cabinets for access if needed later.
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Dealers
Fax Server Orders printedsorted and manually
distributed
ERP Customer Service
Orders manuallygathered and filed
COCs
Case Study: Kimball International
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SolutionEsker DeliveryWare captures the incoming fax electronically and automatically delivers it to a queue within the software program. Taking the place of the desktops where faxes had been placed before, the queues were organized according to region as the sales orders were categorized before. in addition, Esker Deliveryware labeled each incoming sales order with the appropriate prioritization, according to predefined guidelines.
For example, Kimball wanted any incoming orders for one specific product to be top priority and moved ahead of other orders in the queue. Next in priority would be orders from specific dealers. Everything else was distributed and processed in the order it entered the system. after the orders arere processed, each document was electronically archived. Faxes are now automatically delivered to queues organized according to region. In addition, Esker DeliveryWare labels each incoming sales order with the appropriate prioritization, according to predefined guidelines.
Key results
§ 100% of orders entered within 24 hours — 90% within 12 hours
§ Total visibility into order entry, orders filed immediately into the ERP system
§ Customer service able to retrieve orders immediately
§ Order queue monitoring to identify top priorities
§ 15,000 pages of paper saved per month, 2 printers and 15 file cabinets eliminated
“Being able to find information so quickly not only has increased our productivity, but has also allowed us to serve our customers better.”
Steve Snyder, Director of information technology
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Dealers
ERP Customer Service
COCs
Faxes capturedsorted and delivered
by EskerDeliveryWare
Orders validated andsubmitted using
existing EDI workflow
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Esker Deliveryware applies best practices to customer billing processes by optimizing the delivery of invoices and associated documents directly from ERP applications. For the sender, this means every customer invoice can be sent, archived and tracked automatically and electronically. On the other end, invoices arrive by mail as they always have (paper in envelopes) or as email attachments, according to business rules based on the preferences of the receiving customer. So, companies can immediately gain the efficiencies and savings of e-invoicing without a negative impact on customer satisfaction.
in fact, just the opposite is true. along with giving customers a wider range of choices for receiving invoices from suppliers, billing process improvement with Esker Deliveryware contributes to higher customer satisfaction by reducing risks of human error, delivering invoices in real time and enabling companies to track individual invoices.
E-invoicing with Esker DeliveryWare simplifies billing operations and resource management at minimal expense, effectively removing direct costs and process inefficiencies associated with handling of paper invoices and supporting documents. For those customers who are not ready to receive invoices electronically, businesses gain automation efficiencies by offloading the processing and delivery of paper invoices through on-demand services as part of the Esker Deliveryware solution. invoices are sent directly from ERP applications to an Esker production facility where the documents are printed, folded, inserted, stamped and forwarded to the post office.
E-Invoicing: more than invoicesideally, e-invoicing is part of a comprehensive platform for automated billing document processing. By automating billing document processes instead of relying on manual methods, businesses reduce the cost, increase the speed and improve the quality of information exchange with customers as part of the order-to-cash cycle. These outcomes result in greater efficiency in billing and collections, ultimately contributing to overall profitability and return on IT investments.
Esker DeliveryWare enables users to match up proof of delivery (POD) and other documents with corresponding orders and invoices at any point in the billing process. POD documents can be sorted, archived, sent and tracked automatically and electronically.
this solution delivers value by integrating with ERP systems to give companies access to order, billing and proof of delivery information and enable them to deliver that information to customers. Businesses can store billing documents and data from a full range of sources and in a variety of formats, and automatically send billing document packages via a range of media according to specific customer preferences — including postal mail, email or other electronic channels, or a combination of these.
Best practices for order-to-cash automationas a tool to enable best practices for order-to-cash performance improvement, Esker Deliveryware automation encompasses the assembly and collection of order and billing documents into and out of ERP applications and other business management solutions. this offers the ability to:
§ Enable access to billing documents within the enterprise and exchange of billing documents with customers
§ automatically send billing documents in customer-preferred formats ranging from paper to electronic
§ archive billing documents or route them to a storage system
§ Maintain and adapt as more customers adopt e-invoicing
§ Seamlessly integrate e-invoicing with ERP applications
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Automated E-Invoicing
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Esker DeliveryWare essentially functions as a “printer” in automating the storage, assembly and delivery of billing document packages. While the solution offers considerable flexibility as to how invoices and supporting documents can be managed, at its core is a process that consists of the following key steps:
1. Invoice generation and billing document assembly. when an invoice is generated, supporting documents (such as purchase orders, pick lists, packing slips and delivery receipts) are collected and assembled.
2. Method of delivery determination. Based on preferences specified earlier by the customer, Esker DeliveryWare Rules Engine finds the method and address for delivery by reading the invoice, or by database lookup, application, etc. It also identifies formatting, conversion and routing conditions that need to take place, as defined by processing rules.
3. Delivery transport. Recipients are able to specify the document transport mode: email, fax, or postal mail.
4. Archiving and storage. when the package of documents is archived, its contents can be accessed or stored together or as individual documents.
in addition, users have the option of interactively adding extra documents from legacy applications, network directories and other sources along with those captured automatically from an ERP system.
Satisfy customer preferencesthe beauty of Esker Deliveryware is that it completely automates the sending of billing documents yet also allows customers to receive the documents in whatever format they want, including postal mail.
as a result of its innovative functionality, Esker Deliveryware allows customers to receive billing documents electronically through email or fax, or through postal mail. Regarding the latter option, companies can send billing documents electronically to an Esker production facility, where these documents are printed and prepared for mail delivery to customers.
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ERP
Copy of Order
Proof of Delivery
Fax
Esker Production Facility Postal Network
Archive
Customers
DATA CEN ER
Notification
Billing Package
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Breaking the e-invoicing deadlockaccounts payable is a critical process for any enterprise. For many companies, it is not one that they are prepared to change — certainly not just to save their suppliers time and money.
When you use Esker DeliveryWare for e-invoicing, no change is required on the part of customers. Esker Deliveryware enables companies sending invoices to reconcile their need for automated billing with customers’ desire to receive paper invoices. and as customers become ready to adopt e-invoicing, companies can easily satisfy changing preferences and tailor invoice delivery to the circumstances of each customer.
Easing the transitionwith Esker Deliveryware companies can take a realistic, step-by-step approach that creates a continuum between legacy media and future e-invoicing mechanisms. this path from manual to automated to electronic invoicing follows your customer adoption curves so that you can start gaining efficiencies and reducing costs immediately. Esker Deliveryware allows companies to send electronic and paper invoices to small and large customers instantly, eliminating the time and expense of managing costly mailroom operations or other manual means of delivery.
E-invoicing benefits available todayEsker Deliveryware can enable a business to send all of its customer invoices electronically, lowering production costs to near zero and cutting invoice production time by as much as 100%. Other benefits include:
§ Up to 96% reduction of billing document handling time
§ 40–90% lower invoice delivery costs
§ Billing errors and returns reduced by as much as 90%
§ Reduced Days Sales Outstanding (DSO) by 2–5 days at minimum
§ Increased process control and visibility with tracking of individual invoices
§ Less overhead and paper handling for printing, folding, stuffing, stamping and mailing
§ Reallocation of resources from mail operations to more productive activities
§ Improved service to customers with real-time delivery and more choices for receiving invoices
§ Fast, easy retrieval and resending of billing documents with electronic archiving prior to delivery
§ Increased competitiveness as competitors become more efficient by moving to e-invoicing
§ Immediate additional ROI for your ERP investment
E-invoicing time and costs
handling time 10 seconds
transit time Instant
Cost of sending an invoice $0
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ELECTRONIC
AUTOMATED
MANUAL
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Conventional billing processes typically include processing and sending invoices at the end of a set time period. whether it is weekly or monthly, invoices that are ready to go sit and wait until the set time arrives.
But the faster you get invoices into the hands of your customers, the sooner you can receive payment.
with Esker Deliveryware, invoices can be sent as they are prepared, and customers can start their internal payment process right away. This real-time invoicing can significantly reduce Days Sales Outstanding (DSO).
Additional cashimagine a company earning $100 million a year using conventional invoicing processes. with 250 business days in a year, and if the customers were all paying on time, the company would take in $400,000 a day. Of course, the reality is that customers often do not pay on time. But even with a conservative assumption of half paying late, the company would take in $200,000 per day.
With Esker DeliveryWare invoice automation, average DSO could be reduced by 7 days — amounting to $1.4 million in early payments. with an average return on investment at 5%, the early cash collection could earn the company an additional $70,000 in the bank.
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DSO Advantages
RED
UC
TIO
N IN
DSO
EARLY PAYMENTS
COMPANY WITH ANNUAL REVENUE
OF $100M
10 DAYS
8 DAYS
7 DAYS
6 DAYS
4 DAYS
2 DAYS
400,0
00
800,0
00
1,200
,000
1,400
,000
1,600
,000
2,000
,000
whitE PaPER
ERPApplications
Produced invoiceswaiting to be sent
invoices are processed and sent to customers at the end of the period
Customers RECEIVE invoices
Customers PAY
invoices
Month
AVERAGE PAYMENT DELAY60 days
DSO75 days (average)
DSO RESULTS WITH CONVENTIONAL MAIL PROCESS
ERPApplications
invoices are sent to customers in real time Customers
PAY invoices
PAYMENT DELAY
PAYMENT DELAY
PAYMENT DELAY
REDUCEDDSO
DSO RESULTS WITH DELIVERYWARE
ESkER DElivERywaRE
ChallengeVisy is the world’s largest privately owned packaging and recycling company and is headquartered in Melbourne, australia. as the business continued to grow and its customer base expanded, keeping track of records, generating invoices and receiving payments on time became an increasingly complex and time-consuming process.
with some 25,000 customers and more than 24,000 invoices being manually distributed each month, visy found that its team of 35 accounts receivable staff was spending far too much time on paper-intensive tasks. Sending out invoices by fax and traditional postal mail was not only time-consuming but also incurred high printing and mailing costs. visy’s accounts department was spending hundreds of hours collecting delivery receipts and manually processing invoices. the process involved many steps including printing and folding documents, applying postage, sending faxes and keeping records. invoices were being misplaced, lost or never reaching the people they were intended for.
visy has more than 100 delivery truck drivers who deliver goods to customers, and it is a necessary part of the company’s business to have proof of delivery (POD) documentation. The drivers would collect paper receipts and, on average, 20 percent of these would go missing. visy was not receiving payments on time and needed a solution to automate the invoicing process.
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whitE PaPER
CREDIT & COLLECTIONS
POD
COURIER
POD Invoicepast due
CUSTOMERSERVICES
RequestPO
CUSTOMER
Manually sendcopy documentsto resolve dispute
Dispute: “Didnot receive goods
as per order”Request PODfrom courier
PO
Case Study: Visy Industries
ESkER DElivERywaRE
SolutionWith the Esker DeliveryWare solution in place, drivers are equipped with PDAs to capture customer signatures when the goods are received. this electronic proof of delivery is then automatically sent to a central database and downloaded by Esker Deliveryware. an invoice automatically generated and sent to customer by mail or email, along with proof of delivery. Customers get the information they need to pay as soon as possible, and visy staff can now spend more time doing valuable work and concentrating on their areas of expertise
in terms of return on investment, e-invoicing dramatically improved cash collection and dispute management while reducing costs, processing time and DSO.
Key results
§ Reduced delivery costs 50%
§ Completely eliminated paper invoices
§ achieved time savings of 250 hours per week
§ automated capture of proof of delivery documents
§ Reduced late payments by a minimum of 5 days
“We have truly achieved our paperless office vision. A great accomplishment for our accounts team who are now alleviated from the time-consuming paper-based processes which slowed down payments.”
Sava trifunovic, National Credit Manager
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whitE PaPER
BuyerERP
CREDIT & COLLECTIONS
Fax email etc.
Purchaseorder
Invoice sentwith e-POD
WEB
Customer goods delivered andsignature captured (PDA)
Couriere-POD
POD Invoice PO
e-POD
CUSTOMERSERVICES
ERP
ESkER DElivERywaRE
Inefficiency in the order-to-cash cycle can cause companies to miss tremendous opportunities for improved profitability, and can keep them from emerging as market leaders. Achieving the best results from automation requires a careful assessment of the available solutions to find one that meets specific requirements.
to ensure the success of your move from conventional order-to-cash document processing to an automated solution:
1. Search for a solution that can be integrated quickly.
Measuring the cost of deployment, integration and scalability to meet your needs and your vendor needs is crucial in choosing the correct solution. Look for a solution that can be implemented quickly and integrate seamlessly within your existing ERP system.
2. Choose a vendor with proven expertise.
Successful implementation of an order-to-cash document process automation solution must include both technology and knowledge. how long has the company been implementing these solutions and how many successful installations have they completed? Make sure they have a thorough understanding of the essential tasks involved in enterprise technology implementation and integration.
3. Find a solution that creates added value.
the solution must offer the ability to automate document processes in every phase of the order-to-cash process. it should leverage your existing infrastructure, thereby increasing the return on your company’s ERP investment.
What to look forSpecific capabilities of value to businesses in automating order-to-cash document processes include:
§ Full data capture and document transport options
§ Automated order assembly and bundling of billing documents
§ Electronic exception-handling workflow
§ Reporting capabilities to monitor sales order processing and billing activities
§ Order entry and invoice delivery notification returned to the ERP system
§ Electronic indexing and archiving of original document images for easy search and retrieval
§ Link to archived documents available from the ERP application
§ Built-in document formatting functionality
Learn moreas a comprehensive platform to integrate automated order-to-cash document processing with ERP systems, Esker DeliveryWare satisfies all of the above criteria and more. Esker also helps customers improve perfromance in the procure-to-pay cycle with automated vendor invoice processing and e-purchasing solutons. Esker can help you determine your specific requirements and identify the best solution for your business processes. For details about Esker document process automation solutions, please visit www.esker.com.
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whitE PaPER
Creating a Successful Implementation
ESkER DElivERywaRE
Esker is a recognized leader in helping organizations eliminate paper and improve business processes with on-premise and on-demand document automation solutions. integrating seamlessly with enterprise systems and other applications, Esker solutions enable end-to-end automation of any inbound or outbound document processes — sales order processing, billing, cash collection, accounts payable, procurement and more.
Esker was founded in 1985 and operates globally with more than 80,000 customers and millions of licensed users worldwide. Esker has global headquarters in Lyon, France and U.S. headquarters in Madison, Wisconsin.
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About Esker
whitE PaPER
WORLDWIDE ESKER LOCATIOnS
asia § www.esker.com.sg
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Germany § www.esker.de
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United kingdom § www.esker.co.uk
MADISOn, WISCOnSIn § U.S. HEADqUARTERS
Esker, inc. 1212 Deming way
Suite 350 Madison, wi 53717
tel : 608.828.6000 Fax : 608.828.6001
Email : [email protected]
www.esker.com
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