Use Workflow To Target The Exceptions - And The Rules

In the current economic climate, customers are more conscious of the cost-justification of a technology solution than ever. When your customers are accountants with in-house technical expertise, the financial benefits have to be especially compelling. For several years, systems integrator and software developer NSC TechWorks, Ltd. (Elk Grove Village, IL) has provided data extraction technology to one such customer. CTC provides outsourced freight bill auditing services for companies that ship huge quantities of products through 15,000 different carriers.

For some time, CTC had been processing freight bills using TELEform forms processing software from Cardiff Software, Inc. (San Diego). More recently, Sam LaSpisa, president of NSC, became aware of an opportunity to address an even more expensive process - reconciling exceptions. Between 80% and 85% of the time, the freight invoice, bill of lading, proof of delivery receipt, and any other documentation are consistent with each other and with the rates negotiated in the contracts. Manually reconciling the remaining 15% to 20% was expensive and time-consuming. For example, if a client appeared to have been overcharged, a CTC employee would write and print a recommendation. This document and all supporting documents would be mailed to the client, who would approve or amend the recommendation and send the correspondence back. This process cost CTC nearly $7 and the cycle time ranged from 10 to 30 days. These costs affected profitability, as they were operational expenses that were not compensated by the clients.

In-House Technology Supports Internet-Based Solution
NSC proposed a Web-based workflow solution that uses open standards. Documents are scanned using Panasonic scanners and a scanning utility NSC built using ImageControls, an SDK (software development kit) from Kofax Image Products, Inc. (Irvine, CA). The scanning utility batches and indexes the documents and encrypts the data as it sends it to the correct workflow queue. Data is extracted from recognized forms using TELEform.

"This account is somewhat different from others in the industry because it focuses on the bill of lading rather than the freight bill," comments LaSpisa. For documents that have quite a bit of handwritten information, NSC enhances TELEform with an ICR (intelligent character recognition) engine from Parascript LLC. In addition, NSC incorporates a recognition engine from ABBYY Software House to increase accuracy for unusual characters and symbols. "All told, we have trained systems to nearly 100% accuracy," says LaSpisa. "If we still can't capture the information we need, a carrier number can be entered manually to identify the document."

CTC uses DocWorks, NSC's branded Internet-based content management application, and DocFlow, a complementary module that automates existing workflow processes. The solution is integrated with CTC's existing accounting and auditing applications. When an exception is encountered, a code is automatically assigned which routes it to the appropriate auditor. If a bill of lading is missing or a customer was blatantly overcharged, the accounting system generates an error code. DocWorks pulls data out of that system to route the exception where it needs to go. DocFlow's workflow messaging process communicates the auditor's recommendation to the client via e-mail or cell phone notification. The client can respond by typing corrections or instructions in a field provided and attach additional documents. This response is routed back to the CTC auditor who can then resolve the issue and allow the payment.

CTC estimates that it saves $10,000 a month in process costs. In less than a day, the auditor can resolve several thousand exceptions at a cost of about 15 cents each. LaSpisa says the industry average for an exception process like this is 90 cents.

Quick Implementation A Key Selling Point
CTC chose to partner with NSC rather than assign internal resources because of the speed at which NSC promised to provide a solution. The entire system was up and running within 48 hours. CTC estimates it would have taken six months to a year to develop a similar solution in-house.

An Internet-based solution can also reduce the amount of time it takes to add new users. DocWorks provides a framework for setting up new users and their roles that can be configured using drop-down menus. Business rules are also configurable and can be attached to a profile. For example, the system could automatically notify a specific employee about any transaction over a certain amount, or it could limit user access to a specific account. To streamline the process of bringing on new users, NSC has created an approximately one-hour training session.