automation photoIT experts at Swedish automotive supplier Autoliv are converting 40 European plants to a new, common ERP infrastructure.

Top priority for the new system is to make sure that there is an uninterrupted flow of materials to all machinery, says Soenke Gebhardt, IT expert at Autoliv’s German factory in Elmshorn near Hamburg.

Equally important is the adoption of a highly efficient, automated system for invoice processing.

The reason is clear: When production becomes more efficient, accounting departments have to become more productive as well. Autoliv looks at invoices processed per employee as a benchmark.

Autoliv Germany’s invoice automation project serves as a pilot project for the global group.

In the company’s new system, lists and databases containing production materials that have been delivered are entered into a common data pool. The system then generates the paperwork.

“Our goal is to digitally process all invoices,“ said Gebhardt. He added that credit notes are the company’s preferred tool and 65 percent of all direct suppliers participate in this process.

“A precondition is reliable price information and exact booking of the materials. In return, our suppliers get a topnotch liquidity planning tool as well as further processing of electronic documents,” Gebhardt said.

In the automation process, invoices are digitized with the help of scanners. Character-recognition software then extracts the most important data from the invoices and copies those into a database. The document itself is filed in an electronic archive.

Though software companies claim their programs recognize 70pc to 80 pc of all text, Gebhardt says that is too optimistic. “About 50pc of the invoices are digitized accurately enough so they don’t need any more work,“ he said.

Once digitized, data are automatically checked. “No accountant needs to be involved in the invoices that cover our incoming goods,” Gebhardt said. A workflow process has been adopted for other invoices.

Gebhardt said the automation project is on track to meet the company’s goals. “There’s only one argument for automation: costs,” he said.

Consultants agree that cost reduction is the main aim in the automation of invoicing. “Our recommendation is to switch to credit notes as much as possible,” said Reinhold Pfeiffer, vice president at Capgemini Germany. He said technology trends are leading away from paper.

But for the time being, companies are still spending a lot of time and money on the processing of paper invoices. They need to be scanned, digitized, manually corrected and entered into systems for processing.

Companies tend to outsource all this work to specialized service providers who process all mail and deliver digitized versions of everything by lunchtime.

Capgemini’s Pfeiffer said that, until all invoices are digital, data-quality risks remain an issue. “Especially with VAT and foreign taxes, it’s fatal not to recognize data correctly and enter them in the wrong place in the database,” he said. “Mistakes can quickly reach into the millions.”

-By Christian Raum

Photo: Photocase/aussi97