Advances against the rising tide of paper: the success story of Swiss retailer Coop & automated invoice processing technology

By Daniel Izsak

The development of computer-based technology and the explosion of the digital age were expected to foster the emergence of a paperless office environment well before the turn of the 21st century. However, rather unexpectedly, as the adoption of electronic technology has increased, paper consumption has also followed suit. Since the 1960s, the use of printed paper has increased six-fold and in 2004, the average European consumed nearly 130 kilograms of paper per year, up 30 kilograms in just one decade.*

This increased paper consumption is reflected in the amount of mail received in company mailrooms on a daily basis. According to Royal Mail, the UK postal service delivers nearly 83 million pieces of mail each day. Most organizations are finding that a significant portion of that mail is headed to the Accounts Payable department, representing incoming vendor invoices which require immediate processing.

Even with Electronic Data Interchange (EDI) available – a paperless method of delivering and receiving invoices – most companies still receive the majority of their incoming vendor invoices in a paper format. A recent survey of more than 320 AP departments showed that less than 20 percent were even equipped to receive invoices in an EDI format.** It is not feasible for smaller vendors to submit invoices in an EDI format. Therefore, AP departments have been resistant to invest in the technology required to receive EDI transmissions knowing they would still need a method to process paper invoices. As a result, a large percentage of incoming vendor invoices will continue to be received in a paper format for decades to come.

Based on these findings, many companies are focusing now on how to effectively manage the large amounts of paper documents coming into their mailroom, including incoming vendor invoices. Compounding the paper issue is the need to efficiently capture the critical data contained on these invoices. The information contained on the invoices must be collected in a timely manner in order to process payments according to the most favorable terms – but using manual data entry as a primary method is tedious and time-consuming, thereby making it difficult for a company to take advantage of early payment discounts and avoid late payment fees.

Many companies have turned to a technology-based solution as an effective way to deal with processing paper invoices. By virtually eliminating manual sorting, routing and data entry, an automated document and data capture solution provides a boost to productivity levels that would be unachievable by existing staff – and at a lower cost. Companies have realized dramatic reductions in turnaround time – in some cases, processing times of 10 days have been reduced to 3-4 hours, saving companies up to 65% in annual processing costs.

One such technology-based solution is AnyDoc ®INVOICE ™ from AnyDoc Software. Using this automated data capture solution, Coop Retail Group, the large Swiss retailer, automatically processes more than 100,000 invoice pages each month, freeing personnel and allowing resources to be allocated more productively and efficiently. The AnyDoc solution seamlessly integrates with Coop's existing AP software, supports multilingualism and increases compliance of their accounts payable processing.

Coop is the second largest retail trade group in Switzerland. To be as close to their clients as possible, Coop maintains more than 1,400 sales outlets and employs more than 44,000 employees. Its annual revenue in 2006 amounted to approximately 14.7 billion Swiss francs. The 1,400 sales outlets include Coop supermarkets and mega stores, Coop City department stores, Interdiscount, Coop “Bau & Hobby” (DIY and construction retail parks), Coop Pronto shops and filling stations, Coop restaurants, Coop Vitality pharmacies and other business units.

As a retail merchant across the whole of Switzerland, Coop has access to an extensive network of over 60,000 suppliers. This means that the accounting area has to manually process a large amount of incoming invoices. To optimize and accelerate the acquisition process and the formal auditing of accounts, Coop decided to make use of AnyDocINVOICE from AnyDoc Software. The system is especially ideal for preliminary posting, since it not only supports multilingualism (typical for Switzerland), but also processes remittance slips automatically at the same time. AnyDocINVOICE also performs an automated VAT inspection, which increases the compliance of accounts payable processing.

The automation of invoice acquisition and the automatic formal auditing of accounts using AnyDocINVOICE bring Coop enormous savings every day. After a complete introduction of the new system, the 25,000 to 30,000 invoices (approx. 100,000 invoice pages) that come in every month can be captured much more efficiently. Since the manual routine work in the areas of business administration and controlling is greatly reduced, the company can use the available resources more efficiently and productively. Valuable time savings are also realized. The information is available electronically at any time, and the administration of the data is virtually paperless. The accelerated processes lead to a better exploitation of discounts.

The seamless integration with SAP and Livelink ECM for Accounts Payable workflow from Open Text Corporation represents another plus because the data extracted can be transferred seamlessly – including the control signals for the workflow. Since all data is now available in SAP, maximum transparency is ensured.

AnyDocINVOICE was integrated into the existing SAP software. “Despite the great complexity of the system, the solution is very stable,” says Klaus Eichhorn, SAP developer at Coop. “For the automated pre-acquisition of a creditor line on an invoice receipt, we access several servers,” Eichhorn explains. “In a strongly networked application, the supplier is automatically recognized from the scanned receipt, and the acquired data is passed on to SAP as IDoc.”

The success of the project can also be measured in numbers. In the electronic acquisition of invoices using AnyDocINVOICE, Coop attains a recognition rate of over 85%. The productivity increase for the entire process chain amounts to 15 personnel units.

Xavier Buro, project manager in the Finances and Services division at Coop, is extremely satisfied with the performance of AnyDocINVOICE. “The automated recognition rate exceeded our goals and our expectations of the increase in efficiency,” says Buro. “The AnyDoc team works with absolute professionalism and reliability,” said the co-project manager of the Creditor Workflow project.

Fritz Friedli, manager of the Main Accounting Organizational Unit, has nothing but praise for the good service of the AnyDoc team: “The support was fast and competent, so that any problems could be solved very quickly.” Friedli has become familiar with the potential of AnyDocINVOICE as the person responsible for the implementation and coordination between the main office and regional divisions. “I was surprised how smoothly the new kind of invoice acquisition and pre-monitoring could be integrated into our company network,” says Friedli.

Peter Baldauf, manager of IT Processes in Merchandise Management, is convinced that the introduction of AnyDocINVOICE has succeeded optimally: “The installation of the freeform text recognition for the automatic acquisition of relevant data and data preparation for the subsequent pre-acquisition for the SAP system was handled absolutely seamlessly.” Baldauf is delighted with the resulting increase in productivity, “Thanks to the new system, the workflow has become much more efficient. The acquisition of the invoice documents works extremely well. The expected recognition rate of 80% was exceeded by far. Support by the AnyDoc team was prompt and reliable.”

Daniel Izsak is General Manager of AnyDoc Software, GmbH. He can be reached at info@AnyDocSoftware.com.

AnyDoc Software develops innovative document, data capture and classification solutions that have been the industry standard since 1991. Thousands of companies worldwide rely on AnyDoc solutions to eliminate millions of hours of manual data entry while improving their productivity and data accuracy. Any paper form or document including invoices, remittances, and checks can be automatically processed with full data extraction without the need for manual keying. Clients include: Sony Pictures Entertainment, Circuit City, BlueCross BlueShield, the U.S. Census, LeasePlan, Coop, and more. For additional information, please visit www.AnyDocSoftware.com.

[Source: *EarthTrends earthtrends.wri.org, **AberdeenGroup, March 200]