It is important to choose the right person for the role of the key user. This checklist helps you to choose the ideal key user for your automation project.
Automated document processing in procurement v. manual document processing
With each transaction in purchasing, several documents need to be processed. But what exactly is document processing? And how does manual document processing differ from automated document processing? This blog article compares manual document processing with automated document processing throughout the four main stages of document processing including document receipt, data extraction, data validation and data export.
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What is document processing?
In this context, document processing is the activity of receiving a document, understanding the information and inputting that information into downstream systems. In most companies, documents are processed manually. Traditionally, documents have existed in physical paper form. Environmental and cost pressures encourage companies to process documents as PDFs but, even in this digital form, the differences between manual and automatic processing remain the same. Document processing is necessary in most business operations.
Along the Procure to Pay (P2P) process (ordering, purchasing, payments) document processing is a core activity. The P2P process is a series of transactions that each require some form of document processing. In purchasing, B2B documents that need to be processed include quotes, purchase orders, purchase order confirmations, advance shipping notices, and invoices.
What is automated document processing?
Automated document processing means that the data contained in these documents does not have to be processed by an employee but is instead processed automatically through technology such as the Netfira Platform. The purpose of automated document processing is to process large volumes of information quickly and efficiently with minimal human interaction.
In procurement departments, automated document processing is vital for a smooth and reliable P2P process. With the help of automation tools, the exchange of data and documents along the process steps is automated, thus relieving the procurement team of tedious manual activities.
The connection between automated document processing and intelligent document processing
Automatic document processing also entails intelligent document processing. Intelligent document processing means that unstructured data is turned into structured data which is then processed automatically.
In purchasing, this mostly applies to B2B documents like purchase order confirmations. Unlike invoices or purchase orders, which are semi-structured or structured documents and therefore processed quite easily, either manually or automatically, purchase order confirmations are unstructured documents which pose a challenge for procurement teams. Read here how the Netfira Platform automates unstructured transactional documents through intelligent document processing.
The 4 stages of document processing
In the following comparison, the 4 stages of document processing will be exemplified by means of processing a purchase order confirmation (POC). In doing that, manual document processing and automated document processing with the Netfira Platform will be compared.
1. Document receipt
Purchasing departments receive paper and digital documents via a lot of different channels including e-mail, fax, and post with e-mail being the most common case.
Manual document processing:
If a procurement department works completely manually, the buyer must open the e-mail from the business partner and then open the POC which is attached as a PDF file.
Automated document processing with the Netfira Platform:
The document receipt process is automated. The POC is sent to a specified mailbox and the platform collects the document from the e-mail and initiates the next stage.
2. Data extraction
Data capture can be the most expensive, time-consuming, and resource-intensive step of document processing.
Manual document processing:
After receiving and opening the POC, the buyer needs to manually enter the data into the ERP system.
Automated document processing with the Netfira Platform:
The platform automatically extracts data from the POC with a data accuracy of close to 100%. The Netfira Platform uses intelligent data extraction based on AI that turns unstructured data into structured data.
3. Data comparison and validation
Data comparison and/or validation is crucial as documents that do not match perfectly represent different expectations for buyer and supplier and expose both to the risk of litigation.
Manual document processing:
The buyer needs to open the order in the ERP system and compare it with the order confirmation. If the two transactional documents deviate from each other, the buyer must decide whether they accept the deviation and adapt information like price, quantity or delivery date. If the buyer cannot accept the deviation, they must contact the supplier.
Automated document processing with the Netfira Platform:
If the confirmation matches the order, the information is entered in the buyer’s ERP system automatically. The Netfira Platform allows companies to achieve nearly 100% automatic processing of order confirmations where there is no deviation.
Deviations, on the other hand, can be identified quickly and easily. The platform directs the buyer directly to parameters that need to be checked. For checking and clarifying the deviations, the system provides the buyer with a variety of processing options. These are based on the logic of data conversion, the definition of tolerances and data enrichment. The structured and standardised process for handling deviations saves the purchasing department time and reduces stress in the approval process.
Intelligent data extraction alone can help businesses digitise their processes. Automation, however, requires the software to not only extract but also understand, compare and validate the data. The Netfira Platform intelligently compares the extracted data from the POC with the order.
4. Data export
Manual document processing:
As a last step, the buyer manually exports the POC in a downstream system, like an ERP system, and archives it there.
Automated document processing with the Netfira Platform:
The Netfira Platform automatically exports the order confirmation in any downstream system.
Why automated document processing in procurement is the future
The comparison above clearly highlights the advantages of automated document processing. The time saved through the automation of order confirmations is significant. Manual checks and comparisons of documents and items are no longer necessary, which significantly reduces the workload for employees. Moreover, automated order confirmations make purchasing more efficient by increasing productivity, reducing mistakes, and eliminating manual data entry. As a result, the procurement department has more time to concentrate on more essential and value-adding tasks.
Pfleiderer Case Study
Learn how Pfleiderer successfully digitised its procurement through process automation.
Learn in this blog post how procurement can maximise the ROI by automating the document flow from their biggest suppliers.
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