It makes sense for a company with distributed operations to digitize supplier invoices, so that it can route electronic images of the invoices to recipients anywhere in the world. The usual solution is to purchase internal document imaging and workflow software, and then create a support infrastructure around it. While this may appear simple for smaller operations, a medium to large company must invest in a full-time document management staff, as well as use quality control procedures to ensure that both digital images and the original paper documents are not lost. There are also ongoing computer system hardware and software replacement and upgrade costs. In short, document digitizing may be surprisingly expensive and absorb significant management time.
An alternative approach is to use Document Process Outsourcing (DPO). This alternative eliminates the fixed investment in digitizing equipment and staff, with the supplier being responsible for delivering electronic images to the company. The usual workflow with a DPO solution is as follows:
- Suppliers send invoices to a lockbox that is accessed by the DPO supplier
- The DPO supplier cleans up the invoices, scans and indexes them. It may also key in crucial data items, such as the supplier name and invoice number.
- The DPO supplier routes the electronic images to approvers using workflow management software.
- Approvers review the images with a Web browser and assign the invoices to expense or asset accounts. They can also annotate the images with text highlights, confidential information block-outs, and free-form text.
- The DPO supplier sends the approved and coded invoice information to the company’s accounting system with an electronic feed.
By using a DPO, a company has the added advantages of off-site record storage that is maintained by the supplier, as well as redundant data centers, and even access to a supplier-managed help desk. Also, since the supplier has significant economies of scale, its operating costs are lower, and it can pass along some of these savings to the company. Finally, this may result in no supplier-generated paperwork arriving at the company at all, since it is routed to and retained by the DPO supplier.
Examples of DPO suppliers are Archive Systems (www.archivesystems.com), Datrose (www.datrose.com), and Xerox (www.xerox.com).