The key in this question being “straight through invoice processing” and how that can be achieved. As always the question at hand is bigger than that – what type purchase and invoice are we talking about, what do we mean with “stp” and what control do we aim at achieveing?
Here are some reflections from the discussion:
“Interesting to reduce STP to a technical issue. What I found during the last decade was that the customer’s order processes prevented STP. Very often Sourcing and AP departments don’t communicate so even if the document could be read 100% the match doesn’t work if one article is ordered but many parts are invoiced or the transformation of uom doesn’t work correctly. For me STP is a change management project before it comes to a technical solution. ”
“Straight-through processing (stp) = number of invoices that can be approved and posted for payment without manual correction/intervention
Tim is correct the more OCR engines the higher the recognition rates = potential higher % of stp, however stp is dependant on many aspects including your match validation & authorization requirements further down the process cycle.
If your processing one off “long tail” type transactions then scanning & OCR may not be the right approach to achieve STP.”
“Let us define straight-thru processing. Option 1: in Supply Chain straight-thru processing is multiple PO’s risen across multiple suppliers or supplier tiers and invoice processing thru multiple sales channels. (See “Supply-Chain Operations Reference model”). Option 2: In Procure 2 Pay straight-thru is from raising the Purchase Order to payment. Option 3: In AP Automation straight-thru is from invoice receipt to payment. Option 4: In OCR straight-thru is from invoice receipt to data feed into workflow.
For option 1, 2 and 3 OCR is a data entry tool reducing the manual labor. It does not make sense to talk straight-thru processing as other factors such as how many percent of your invoices is PO based; how accurate do you purchase order match your invoice; are data accuracy a problem when you goods receipt. I always advise to have OCR and electronic invoicing, but the fact is the vendor sending the invoices reuses purchase order numbers or uses a different unit of measure and the requestor forgets freight on the PO if not raising the PO retrospectively. All mentioned facts that will raise an exception, and stop straight thru processing.
For option 4 straight-thru processing can be achieved by recognition of the invoice layout, readability and conformity to data validation. (PO number is set to numeric, 10 characters for a SAP system then the PO number the vendor prints can’t be “123PO456”)
For option 4 in my experience 99% characters recognized is over the top. It can be achieved with verification; hence a BPO can promise 99.9% accuracy. Then again if you are doing a Supply chain or Procure to pay project does it really matter how accurate your OCR software is?”