Danfoss Power Solutions a.s. Danfoss Power Solutions a.s.

Complex accounts payable data mining solution for whole European region

Sauer Danfoss is a worldwide leader in the field of hydraulic, electric, and electronic machinery systems primarily intended for mobile equipment. Within the framework of targeted process optimization and competitiveness improvement, the Sauer Danfoss group has decided to centralize the management of invoices and relevant accounting and financial processes for its European operations.

Situation

The centralized financial service center has been established at branch of Sauer ‑ Danfoss a.s. in Slovakia. One of the critical issues relating to the center operation was to process and extract accounting information from paper documents arriving from Sauer ‑ Danfoss’ subsidiaries all over Europe. This activity, into great extent consisting in re-typing of information from paper documents to a computer, would be time consuming and it would also require extensive human resources. Simple centralization of financial documents processing at the only European workplace would thus logically result in considerable increase of employees at such location. This would be in clear discrepancy with the aim to establish an efficient shared service center and to reduce the costs.

Figure 1: Automated Financial Document Processing Solution Scheme

According to the defined operating requirements, the financial and IT specialists of Sauer-Danfoss have created a technical solution and workflow vision using modern OCR/ICR text recognition technologies. However, these technologies required narrow integration with subsequent approval processes taking place in SAP, which represents the standard used in Sauer-Danfoss. ReadSoft INVOICES technology was selected as a suitable platform for paper documents processing automation as it enabled recognition and subsequent processing of information indicated on financial documents – single- and multiple-page invoices – down to the level of individual items. IXTENT – a ReadSoft partner – was chosen as the INVOICES solution implementation partner due to its long-term experience with archiving and integration of documents at SAP R/3.

Implemented solution

 As the first step of documents processing, the physical documents are delivered to the financial center. At this point, the documents are scanned in using the optimization tools aimed at achieving better scanned image quality and transferred to ReadSoft INVOICES application for further processing. 

Interpret module represents the first component of INVOICES application. Its purpose is to recognize text information contained in scanned images’ graphics using complex mathematic methods and to interpret such information as characters – text, numbers – that can be subsequently used in the approval process. The recognition system looks for key fields as for example the Business ID Number for establishing a link to the SAP master data partner, or individual material items as quantity or price. Using the preset language profiles, the Interpret subsequently distributes the documents into working folders for individual countries and transfers them for Validation/Verification. The Interpret module also comprises the recognition optimization technology which provides learning process over the documents from individual business partners with the aim of achieving a greater yield in the event of their repeated occurrence.

Figure 2: Documents distribution into working folders by country

The Verification/Validation module provides the operators with uniform view of digital document and extracted data. Whenever it is not possible to extract all data or should the extracted data fail to meet the defined conditions, the application alerts the operator of such discrepancies and requests correction. In addition to the recognized data format validation (for example integral number, percentage value, etc.), INVOICES also ensure cross-check of numeric values (for example VAT calculation, total sum, etc.) and also alert of such possible discrepancies as appropriate. If the verified invoice contains list of material, the Validation/Verification operator can request data directly from the Purchase Order issued for this invoice in SAP and verify accordance of individual items in the purchase order and on the invoice. Should the invoice fail to satisfy the required prerequisites, it is returned to sender. In the final step of successful Validation/Verification, the scanned invoice image and extracted information are sent to SAP. XML (for extracted information transmission) and BAPI (for transmission synchronization) technologies are used for this purpose. 

Figure No. 3: Validation/Verification desktop with link to SAP PO items

In the event of any error during the import phase, relevant error message is escalated to the key user. The scanned invoice images are subsequently archived to Livelink ECM - Archive Server centralized archiving platform in SAP environment using SAP DMS and the SAP ArchiveLink interface. In this step, a SAP workflow relating to approval and posting of individual invoices and their items within the company is launched. In this process, responsible employees can utilize not only the recognized information from individual invoices but also scanned-in images of original documents.

The resulting solution thus satisfies the goal of centralized processing of approximately 350,000 financial documents annually from more than 20 European branches of Sauer ‑ Danfoss. This volume of financial documents is digitized with one Fujitsu-Siemens professional scanner. Documents scanning, interpretation and validation are carried out by 18 employees.

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