Is document management in finance turning the tide?

25th October 2010

The promise of a paperless office has been shimmering on the horizon for decades, but despite dramatic increases in both our use of information technology and the quantity of digital communications and documents we generate, a ‘less paper’ office seems to be the best we can manage. So most of us now find ourselves battered by two stormy seas: one made up of too many paper communications and the other made up of too many electronic communications, says Lesley Meall, FSN contributing editor.

It may not feel like it, when you are struggling to find things whilst surrounded by piles of paper and cupboards full of files, but since 2000, paper use has actually been falling, albeit by one per cent per year; although it plummeted by an uncharacteristic 11 per cent across Europe in 2009.  The European Paper Merchants Association and its members are is hoping that this was a recession-driven aberration. 

Meanwhile, as most organisations are still burdened by the need to process high volumes of paper documents, it’s good to know that the technology that seems to have exaggerated the problem of information overload can also do something to alleviate it. Electronic document and records management systems (EDRM) are being used to speed up and simplify enterprise document management, streamline accounts payable, better manage human resources, maximise investment in legacy systems, cut carbon dioxide emissions, and more. 

“We have got to a point where we are drowning in paper,” says Louise Kearney, director of organisational development with the Northern Ireland Tourist Board (NITB), which is in the process of streamlining its administrative processes and reducing its reliance on paper, by introducing an EDRM. “Visitor experiences and stakeholder engagement is at the core of what we do,” she explains, but the NITB is a publicly funded body, and responding to some of the associated information requests has been proving “challenging” with current systems. 

“Northern Ireland Assembly questions can be very random, and can involve any one of the NITB’s five divisions and any activity,” says Kearney, “and co-ordinating a response can require documents from across the organisation.” But once the new (and importantly, Microsoft SharePoint 2010 compatible) system (from Kainos) is up and running, the NITB executive will find meeting this sort of request much less of a challenge, because as Kearney adds: “It will be possible without relying on particular individuals being in the office to locate the files.” 

Improving invoice processing

At the property management Derwent Living, a document management system (from Invu) has also been introduced, with the aim of streamlining invoice processing, by providing more accurate and up-to-date information to the finance department. “Our finance department always knows exactly where an invoice is in the chain,” says Richard Cookson, head of accounting and ICT, Derwent Living,  says Richard Cookson, head of accounting and ICT, Derwent Living, but it has also improved customer relations. “Invoices are paid quicker so we have a better relationship with our suppliers,” says Cookson. 

Reducing the amount of time wasted looking for “lost” invoices has made cash flow easier to manage and made invoice processing both more efficient and more cost effective. Using the manual paper-based system was much more time consuming and complicated: the five members of the finance department lost the equivalent of 12 weeks each year searching for invoices, which cost around £26,000. It’s an added bonus that the system has also removed some of the loopholes in the manual system that previously made Derwent vulnerable to fraud. 

“It’s now impossible for anyone to authorise an invoice above their limit,” explains Cookson, and much more difficult to forge signatures. “Previously the finance department needed to check hundreds of manual signatures,” he says, which is error-prone, inefficient, and time-consuming, and now that invoice approval process is automated, it has become more transparent for everyone involved, as Cookson adds: “We can be sure during the audit process that there will be no financial regulations breeches.” 

The fact that the document management system integrated closely with the existing finance system was one of the keys to its success; likewise, an Iroko Pharmaceuticals’ project, which uses a document management system (from Bottomline Technolgies) to extend the capabilities of its Microsoft Dynamics AX implementation, and the EDRM at Minneapolis St Paul Metropolitan Airports Commission, which has optimised its Oracle JD Edwards EnterpriseOne implementation by automating document-based transaction processes. 

Both organisations wanted to maximise their investment in their existing systems by extending their capabilities and automating more business processes, but they wanted to do this without any custom coding. “This would have been too time-consuming,” says Michael Ladd, IS manager, Metropolitan Airports Commission; where supplementing the enterprise finance system with an EDRM provided “an alternative to custom coding” and added capabilities that would enable the airport operator to “create and distribute documents through multiple delivery methods.” 

This sentiment is echoed by Michael Burke, manager, financial analysis, Iroko Pharmaceuticals: “Given our global client base and multi-company divisions, we needed a highly efficient and cost effective approach to producing documents, which meets the many country-specific requirements we are subject to,” he says, so it was important to have an EDRM that provided this “flexibility” and “eliminated the need for custom programming every time changes are required to transactional documents and forms.” 

Build a better future

A document management system can be a simple and productive way of developing an existing accounting infrastructure, and when systems are tightly integrated the EDRM can quickly pay for itself. So when Nichols plc implemented a document management system (from Version One) back in 2006, exploiting this synergy and extending the capabilities of its Sage ERP were among the main drivers, but it also needed the system to support its development of a shared service centre. “The document management system was a very important enabling technology,” says Allan Doyle, IT manager, Nichols plc, known across the world for its Vimto brand drinks. 

Nichols’ six geographically dispersed trading companies had previously been physically posting purchase invoices around the UK for manual approval, with dire consequences. “Inevitably, invoices got lost, suppliers could be paid late and disputed transactions were very difficult to resolve,” recalls Doyle, and the need to streamline all of this, make it more efficient, and return some much needed control and transparency to the finance function were absolutely essential to the success of the project. But over the years, Nichols has also been able to actually reduce its environmental impact too. 

“The efficiency and cost savings have always been clear,” says Doyle, who believes the document management system has saved Nichols more than £100,000 each year; but until 2009, when Version One (now part of Advanced Computer Software Group) added a ‘green meter’ to its system, the environmental benefits had, says Doyle, “proven more difficult to measure”. Now that the green meter is available to calculate carbon dioxide emissions related to some of the paper-saving activities that the system supports, he can better assess the environmental impact of Nichols decision to implement a document management system. 

During the six years since the system was introduced, it has enabled Nichols to save 973.35 tonnes of carbon and 454 trees, and it could improve its green credentials in the future too. “Using the green meter will mean that we are always aware of the environmental benefits of paperless processing,” says Doyle, and because the savings are presented as an easy to understand tree graphic (as well as numerically), staff can clearly see that “if they choose to manually process a document instead of processing it electronically, they are a direct contributor to climate change”. So maybe that 9 per cent reduction in paper usage across Europe during 2009 wasn’t a fluke after all.