Lynn Smith doesn’t miss the former temporary workers that keyed invoice data into Alltel’s accounts payable system.
“No, no we don’t,” she quips when asked if she misses the seven workers supplied by a temp agency to the Little Rock, Ark.-based telecommunications company. The workers were needed after Alltel divided into two separate divisions, one for wireless and one for landline. As a result of a bureaucratic hiccup, Smith found a backlog of 5,000 invoices dropped in her lap.
Charles Kaplan of Brainware talks about working with Alltel.
“They didn’t really care if they did things correctly,” she says of the temp workers. “They just pretty much did whatever they wanted.”
On a good day, the workers could process 250 invoices and manually enter the data into the accounts payable system. But with a constant backlog upwards of 2,000 invoices, Alltel was always later than it would like on paying its vendors. Missing the deadline for an early-bird payment discount was costing the company $900,000 a month.
“If you pay in 10 days, then we take a two per cent discount on the invoice,” Smith explains. “That’s our standard vendor terms.”
The answer was to switch from manual data entry and start automating the process, says Charles Kaplan, vice-president of product management with Ashburn, Va.-based Brainware Inc. The data capture software developed by the company uses Optical Character Recognition (OCR) to match the right invoice with the right account.
“Distiller eliminates the need to key information from invoices into a backend payment system,” he says. “It’s an intelligence engine that learns from example instead of requiring that one-to-one match.”
Alltel sent Brainware 100 invoices when it first purchased the software license in 2006, Smith says. Based on that the system was able to learn what type of invoices the company receives and interpret future invoices. It was a key feature for Alltel because the software doesn’t rely on templates to identify invoices.
“Brainware’s fuzzy logic looks for a particular word, not in a specific area for an invoice number,” she says. “For us, that works better because we have so many different formats for the invoice.”
Alltel deals with many different vendors – Motorola, Samsung, are just a couple of examples – and each has its own unique invoice. To design a different template for each vendor would be time consuming and costly.
“To build a form for each and every vendor type was going to be an IT resource nightmare for them,” Kaplan says. Brainware built the product from the ground up on a key embedded search technology that is touted by the company as “more accurate than Google.”
The method works by separating words into bite-size chunks of three letters each. So “Brainware” would be separated into “bra”, “rai”, “ain”, and so on. These terms are stored in an index and when queried, return a match based on what comes closest statistically.
“We built this technology to be highly fault-tolerant,” Kaplan says. “Because you’re never sure what the quality of the document you’re scanning might be.”
Vendors either send Alltel invoices that are scanned into Distiller, or e-mail the invoice as an attachment. An internally developed program is able to automatically search through Microsoft Outlook and find the invoices to feed into Distiller, Smith explains.
From there, Distiller tries to match the data with an account. It determines the level of confidence in a match using an algorithm and if the confidence level is 85 per cent or higher, it will automatically pay the bill.
“Sometimes it’ll have trouble with 3’s and 8’s,” Smith says. When the software isn’t certain, a person double-checks that the bill is correctly assigned – a full-time employee position called a verifier.
Instead of seven temp workers, Alltel just re-assigned a full-time worker.
“She was already an employee and we just transferred her from the task she was doing before and put her on the verifier,” Smith explains. A part-time worker also helps out sometimes.
The proof of the difference made is in the numbers. Now Alltel is processing up to 700 invoices a day with its full-time verifier. It is also meeting those early-bird discount payments and saving a lot of cash.
“We were able to pay for the program in just a couple of months by turning around the lost discounts and getting rid of seven heads,” she says. “We were probably missing about 50 per cent of our available discounts before. Now we’re missing only nine percent.”
The discounts missed because of a late invoice are even less, she adds, probably just one per cent overall.
“It goes well beyond just eliminating key strokes,” Brainware’s Kaplan says. “The ability to get information into these systems creates tremendous business value.”
Brainware isn’t perfect, but matches invoices correctly about 70 per cent of the time, Smith says. The verifier fixes the invoices that aren’t assigned properly.
But Alltel is still running the product as it was out-of-the-box, she adds. It hasn’t put the program’s ability to learn new ways of identifying invoices. It’s something on the to-do list for the telephone company’s systems team.
It’s something Smith wants done soon. But at she doesn’t have to put up with temp workers anymore.
“It was a nightmare,” she says. “It took two or three weeks to train them, and then another two or three weeks to figure out they didn’t know what they’re doing and let them go.”