Print   RSS

Account Data Capture for Small Business

Mani Malarvannan

July 13, 2007

	4.0/5.0 (4 votes total)
	Rate: Select 1 - Terrible 2 - Poor 3 - Average 4 - Good 5 - Outstanding

To be successful in your business, you must deal with accounts payable and receivable processing to handle their invoices and bill payments more professionally. You must manage it properly as it deals with cash flow of the company – perhaps the most crucial thing you need.

Several new and promising technologies like online bill payment, electronic invoicing, and P-card are available in the market that claims to remove paper based processing from the accounting department.

Let us face it; these technologies cannot remove paper documents. According to Aberdeen Group research report 80% of invoices come in paper format and this amount is more for small businesses.

How businesses organizations are managing paper onslaught in their accounting departments?

Account Data capture Software:

Several companies like Kofax, ReadSoft, AnyDoc, and Abbyy offer data capture solutions specifically developed to convert all paper-based invoices, checks, bills, and other documents into data to send to the accounting or ERP systems. Large corporations are using these software solutions for a longtime. By using software for accounting data capture, they have increased the efficiency of their accounting departments and achieved significant productivity in processing their accounts payable and accounts receivable data.

Small businesses houses normally do not use any software to convert account data from paper documents. They use software just to scan their paper based accounting documents and manually enter the accounting data into their accounting or ERP system. This is not a cost-effective solution; time spent on data entry, verification, and data calculation can be automated using account data capture software.

However, there are many problems, for which small business organizations cannot use software for Account Data capture:

The total cost of owning a sophisticated accounting capture may range from few hundred thousand to a million dollars. The cost includes but not limited to following:

1. Licensing Fee for the software (User based or CPU based access)

2. Hardware upgrade to install the software

3. Training for your employees

4. Software support and maintenance

Sometimes accounting data capture software may not come with a standard interface to your accounting software or ERP system; in this case, you may have to go back to the vendor for custom development of the interface. That takes a lot of amount.

However, small business houses can achieve several benefits from using off-shoring accounts payable and accounts receivable services; cost of processing their paper documents will decrease by 50% to 60%. The cost saving does not come free, small businesses needs to overcome issues like offshore security and offshore outsourcing cultural issues.

Nevertheless, by carefully managing your offshore vendors, you can gain the cost reduction and operational efficiency in their accounts payable and account receivable operations.

 Feedback   Submit Article 

Mani,

Very interesting article, you are perfectly right when you say that e-billing technologies are not winning the war against paper. In Europe over 90% of the invoices come in paper form.

There is however another approach, that overcomes some shortcomings of receiver-based data capture such as costs and errors in interpretation.

Optiinvoice.com, the company I work in, has developed a freeware, that runs at the sender´s end, and is specifically aimed at SME.

It automatically "reads" the spool file of any windows based accounting software, and produces structured XML files that are automatically sent (along with an image of the document) to the receiver by email.

The receiver can extract the document in the format he prefers (XML, txt), and pays 10 cents for each received document. You install and get the program up an running in less than one hour.

best regards

Fabio Annovazzi