Invoice Creation and Capture – Paper Invoices Creeping Through the Backdoor!

This article considers the true cost of processing paper invoices, examines a variety of e-commerce alternatives and proposes a flexible and innovative solution for the REAL world.


Most companies run a pretty tight ship. A typical manufacturing company may have streamlined its staffing costs, reduced the administration overhead, installed, set up manufacturing partners in China and perhaps started selling products and services over the web. They’ve worked hard to maintain their competitiveness and are proud of their achievements… and so they should be.

But, walk into any company, large or small, and you’ll still find an accounts team processing paper invoices. Ok, some of the large organisations have invested heavily in e-Business initiatives, document management software, electronic trading portals or perhaps EDI (Electronic Data Interchange); but when you dig a little deeper there are still paper invoices creeping in through the backdoor. It’s often the small suppliers and customers who create the problem. They can’t and won’t invest thousands of pounds in new technology and business procedures. They don’t have the volume, the cash or the inclination to make it work. We all accept that processing a paper invoice is crazy in this day and age, but how do you create a strategy to deal with the real world.

The Small Guy
So here’s the problem: we need an e-Business solution which will cope with our largest suppliers but we also need an e-Business solution which will cope with the “Small Guy”, a company with 5 employees running Sage Line 50.

What’s out there?
Before we can consider a way forward, we need to consider what invoicing methods are already out there. So let’s consider the pros and cons of each. The table below isn’t designed to be a definitive guide, more a way of considering each option and the suitability to the “Small Guy”.

Post Paper Invoices
Cost to Send: High – at least £0.5 per invoice.
Cost to Process: High – Everyone quotes different figures but £10 to £20 to process an invoice isn’t far off the mark.
Pros/Cons: Anyone can raise a paper invoice. Simple setup with little technology required. Environmentally unfriendly – paper cost, printing cost and postage. Processing costs are high and automation is difficult.

Cost to Send: Low – but there can be a transaction charge.
Cost to Process: Low – >£1 per invoice
Pros/Cons: Automated. The use of an agreed standard. Some setup cost both in terms of technology and human input. On-going charges.

Email or FTP of XML files
Cost to Send: Low – no transaction charge (email is free).
Cost to Process: Low – >£1 per invoice.
Pros/Cons: Simple to automate and no transaction charge. High setup cost both in terms of technology and human input. What XML schema do you use? You may have to support multiple schemas.

Email or FTP of CSV, ASCII text or other structured data formats
Cost to Send: Low- no transaction charge (email is free)
Cost to Process: Low – >£1 per invoice
Pros/Cons: Simple to automate and no transaction charge. Low technology cost for sender, but receiver carries the cost of processing. Less reliable than XML.

Web Portal
Cost to Send: Low.
Cost to Process: Low – >£1 per invoice
Pros/Cons: Once setup, the process can be automated and large volumes processed automatically. Can be custom written, which incurs a high setup and maintenance charge.

Data Translation Bureau
Cost to Send: Low
Cost to Process: Low – >£1 per invoice
Pros/Cons: Simple to setup – somebody else does the work! There is normally a setup charge and often a small transaction charge.

Living with Paper
One approach is to accept things as they are and to accommodate paper invoices. In other words, capture the information off the paper and make it available to your AP system (Accounts Payable system). Over recent years, lots of time and effort has been spent on improving document management software and the technology behind scanning and recognition software. The aim of this software is to reliably convert a paper document into electronic text. This type of system combines OCR (Optical Character Recognition) technology and contextual logic which looks for key words within the document and associates them with title data on the document. For example, when you find the word “Date”, the data nearest to it is normally a date field. With this knowledge, you can surmise the likely formats and possible values for the field you’ve just captured and can automatically discount some possible OCR results (e.g. a month value will never be above 12). By combining technologies such as artificial intelligence, multiple OCR engines, and contextual/fuzzy logic, these systems give improved results over the use of fixed OCR templates – some vendors claim character recognition rates > 90%. However, they are costly to purchase and often complex to setup and refine. Many use a knowledge base which must be taught to recognise the type of invoices you receive. No matter how much effort you spend implementing your document management software, no system is 100% accurate and errors will always creep in through all sorts of factors: dirty, crumpled or torn paper, changes to invoice layouts or even scanner faults.

Law of Diminishing OCR Returns
As no document management software system will give you 100% recognition rates, do you double check all of your results or do you accept the odd one will slip through the net. Unfortunately, it’s the odd one slipping through the net which costs money to track down. It makes sense to aim for as high a recognition rate as possible, but this type of approach has a major drawback, it follows a law of diminishing OCR returns. The more time and money you spend trying to improve OCR performance, the smaller the increase in recognition.

If your document management software is achieving an 80% recognition rate, you may have to spend £5,000 to achieve a 5% improvement. Once you get to 90%, that same 5% may cost you £50,000.

Paper = Cost
When you look at the costs of creating and processing a paper invoice, one thing jumps off the page at you – COST. Do you spend time and money trying to read paper, or do you invest your time into grabbing it electronically, and processing it through your backend systems with document management software.
On so many levels, environmental, speed, cost and reliability, electronic trading is the way to go.

Electronic Trading – Don’t Bully the “Small Guy”?
OK, if you accept some sort of electronic trading makes sense, how do we connect with the “Small Guy” who has no investment in document management software? What’s needed is a fresh approach, one which complements the existing infrastructure, but gives us more flexibility. Focusing again on the “Small Guy”, 9 times out of 10, he’ll use a computer system to create an invoice. So why does he covert his computer data into paper, only for the receiver to convert the paper invoice back into an electronic file, or at least re-key it into an AP system, at the other end?

Stipulating, demanding or even forcing an EDI / customised e-Commerce solution on the small supplier won’t go down well. Why should the “The Small Guy” go through the pain and expensive of implementing EDI, when his customer gets all the benefit. The only time this tack works is if you’re a very important customer, with a lot of power!

Is there a simple answer everyone’s missed so far? No, not that we’re aware of! What’s needed is a variety of low cost, e-commerce options.

Sensible Options
A responsible partner must offer a number of electronic trading options and a good starting point is to ask what your supplier can deliver. Have they already invested in document management software and if so, what is it capable of?
• Can your supplier send any of the following formats, XML, CSV, EDI format or ASCII text?
• Can you send an Adobe PDF image of your invoice?
• If the answer to the above is no, then it may be worth considering a simple alternative. A simple, low cost “print capture client” is available, which will take printer data and convert it into an electronic format (e.g. ASCII text) which can then be automatically emailed.
• For suppliers without a computer system, provide them with a spreadsheet to fill in, which can be emailed back or perhaps a web portal/HTML form which can capture invoice data.

Thinking Fresh
If you are going to offer a variety of invoicing methods, you need the tools to process these options efficiently. Output management software (e.g. Formate software ) is an ideal “document translation hub” to do this.

When used for simple e-Commerce, output management software (OMS) performs 3 major functions, these being:

1. Import – OMS will collect virtually any type of data be it CSV, ASCII Text, XML, EDI files, data in Emails, data from web pages or even MS XLS spreadsheets.
2. Recognise and Validate – OMS will read the data and check what has been received prior to any further action. Errors will be picked up and resolved through a workflow process.
3. Translation – OMS will translate the invoice and make it available for virtually any back-end business system (from SAP to Sage). It will also create human readable copies for a long term archive, which can automatically be submitted to a document management software archive – UK invoices should be kept for 7 years for VAT/TAX legislation.

Some suppliers can only email an image of the invoice in PDF format. In this instance, most OMS systems can extract the PDF attachment from an email and submit it to a document recognition system. It can then be passed through an approval process before archiving into a document management software archive ( ). For those suppliers who can only print a paper invoice, there is even a low cost capture client which will take printer data and email it back to the OMS Server for processing.

For companies who already use EDI software, OMS can be used to create human readable copies of EDI transactions (typically in PDF format) and store them into a document management system. Where errors occur in an EDI process, OMS is an ideal way of picking up the error and starting a workflow procedure to resolve the problem.

Wealth Creation – How Your Kids Can Make Money

Here are some nifty ideas showing how your kids can make money. They can do most or all of the work themselves, but may need a little help at times. Besides earning extra cash, these ideas can help your kids learn responsibility and a work ethic.

Types of work for teenagers — Some of the following items are typical teenager jobs you can get for yourself. You can advertise your services in the local newspaper or craigslist website. Other items are jobs you can do for business employers.

1. Applying decorations to clothing — Keep abreast of the latest teen fashions and then apply appropriate decorations to other people’s clothing for a fee.

2. Babysitting — This is a popular job for teenagers, especially girls.

3. Bagging groceries — Go around to the local grocery stores to get this kind of job.

4. Cleaning homes — Advertise this service to get work. The elderly and shut-ins could be a good source of jobs.

5. Collecting redeemable bottles — Some states charge a deposit on beverage containers. You can collect these and turn them in for a refund of the deposit.

6. Cultivating gardens — Many people enjoy having a garden, but they may not be willing or able to do the work required.

7. Delivering newspapers — This is a popular job for teenagers, especially boys.

8. Entertaining at parties — If you have a flair for entertaining people, you could advertise your services. Maybe you want to be a clown or an elf.

9. Grooming the elderly and shut-ins — Everyone likes to look their best, but may not be able to take care of themselves.

10. Growing vegetables — You can raise vegetables and sell them to local grocery stores or fruit stands.

11. Mending clothing — Active children often rip their clothes or lose buttons. You can advertise this service and make some good money.

12. Mowing lawns — This is a popular job for teenagers, especially boys. You can make more money if you have your own lawnmower. Just walk around the neighborhood looking for jobs during the grass-growing season.

13. Picking fruit — This is a seasonal job performed for orchard owners. The faster you can pick fruit (with care) the more money you can make.

14. Providing a referral service for babysitters — You can ask around for qualified babysitters and store their contact information on your home computer. Charge the babysitter a fee when you refer them to the people needing their services.

15. Providing a typing service — If you have a home computer with a laser printer and word processing software, you can provide a typing service for students and small business firms. (Be sure to run the spell checker and grammar checker before printing your work.)

16. Providing an online research service — If you like to do online research, you can sell your services to authors, small business firms, students, and websites.

17. Pulling weeds – This can be a good way to make some money, but be sure to wear work gloves.

18. Raking leaves — When the leaves start to fall someone has to rake them into piles and/or place them in leaf bags.

19. Refinishing and/or repairing furniture — You can advertise to haul away old furniture for nothing. After repairing and refinishing the furniture, sell them at a flea market or your own lawn sale.

20. Running errands for the elderly and shut-ins — When people are housebound, they may pay you to run their errands.

21. Shoveling snow — After the snowing stops, get out your snow shovel. Ask your neighbors if they will pay you to shovel the snow off their sidewalks and driveways.

22. Teaching people to use computers — Most young people know how to use computers. They can teach their skills to older people for a fee.

23. Tutoring students — If you are very good at certain subjects and can instruct other students, you can earn money as a tutor.

24. Walking dogs — If you live in a big city, there probably are many people who will pay you to walk their dog. The more dogs you can handle at a time, the more money you can make.

25. Working as a retail store clerk – Go around to retail stores in your city and leave your contact information. Visit the stores every two weeks or so.

26. Working as a shipping department clerk – Go around to places that have a shipping department and leave your contact information. Visit them every two weeks or so.

27. Working in a fast food restaurant – Go around to fast food restaurants every two weeks or so. You probably will be hired eventually.

28. Wrapping Christmas presents – Many department stores offer a gift-wrapping service. If you have the required skills, you may get a seasonal job.

Rules about jobs for teenagers

The U.S. has both federal and state rules governing teenager workers. For most kinds of work, you have to be at least 14; but the hours and working conditions may be restricted if you are under 16. In addition, you may have to get a work permit. There are separate rules covering agricultural work.

These age restrictions usually do not apply to traditional youth employment, such as babysitting and delivering newspapers.

Ways to look for jobs from employers

There are several ways to look for available jobs. You can look in places where employers announce their job openings. Examples would be the “help wanted” section of classified advertisements in newspapers and the “jobs” section of for your desired city.

You could go around to business firms in your local area to see if they have any job openings. You might want to leave your name, age, address, and telephone number if the business looks appealing.

You could ask your family and friends if they know of any possible job openings that might be suitable for you.

Websites about searching for jobs

These job search websites are an easy way to conduct job hunting. When a website has a search selection box that allows for keywords, you usually can enter “teenager” as a keyword. This lets you search for teenager jobs instead of adult jobs. Ways for teens to find a job. They claim to be “The #1 career and recruitment website for U.S. teens.” You have to register with the site before getting information on available jobs.

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