Guide on how to outsource Invoice data entry

Like each individual, each business is also unique. And inter-dependent. In our business or line of work we need to rely on many others, both businesses and individuals. The businesses and people we sell our products and services to are our clients or buyers. If there were no clients, we would not have a business. The businesses and people we source inputs in the form of raw materials and services from are our suppliers or vendors or contractors. Even the employees of a business are suppliers in a way; suppliers of expertise, skill and labour that enable the business to create a product or service of value that its clients will pay for. In a commercial transaction, products and services are obtained for a consideration, or value. The consideration or value is paid by a buyer based on an Invoice that is issued by the seller which provides the details of the product or service that has been purchased and how the total amount has been arrived at.

Invoices Data Entry Solutions

We understand what an Invoice is. But what is Invoice data entry? Simply stated, Invoice data entry is the process through which information provided on an Invoice is entered into a software application so that it gets converted to standardised data that can be accessed, retrieved and processed in a uniform manner. The software application could be a simple application software like a spreadsheet, or it could be one with the specific purpose of Invoice management.

The case to outsource Invoice Data Entry

All businesses are unique. That we already know. What we perhaps also know is that each business operates with the help of a unique combination of processes and technologies. What does this have to do with Invoicing and Invoice data entry services? Let us take an example. Say Business A buys a product from Business X. Business X will send the product to Business A, while Business A will send an amount of money representing the value of the product, to Business X. This will be done based on an Invoice issued by Business X to Business A. Business X will issue the Invoice from their own system or application that is used for issuance of such Invoices. It will be their own unique format and might be sent physically as a paper Invoice or electronically through an email, even though, in many cases, the fields of information on an Invoice are quite standard. An Invoice will usually mention:

• Purchase Order Number
• Date of Invoice
• Invoice Number
• Number of Units
• Product Description
• Amount
• Payment terms (like 50% on Order, balance of delivery)
• How to Pay
• Tax Payment (GST / VAT)
• Shipping/ Delivery Dates and Details
• Name and Contact Details of buyer & seller

Whichever way it is sent, it will still be an extrinsic artefact for Business A. In other words, it will not be a part of any of their applications (systems). Now imagine Business A receives a hundred such Invoices form a hundred vendors from their hundred unique systems in a month. Any time any information needs to be retrieved from the Invoices it would become a manual exercise. And an onerous one as the number of Invoices keeps multiplying with time. Invoices data entry solutions is the process through which information on such Invoices is transferred to a software application such that it gets converted to standardised data that can be accessed, retrieved and processed in a uniform manner. This process, where a business processes Invoices received from a supplier, is a part of the Accounts Payable function of the organisation. The contra process, where the organisation issues its own Invoices to its clients, which is a part of the Account Receivable process of the organisation, may also have a need to outsource Invoice data entry, though usually to a lesser degree, since the Invoices are issued from their own application and they should have all the information in an accessible, retrievable and processable format. The following benefits can be expected:

• Freedom to focus on core business activities
• Access to cutting edge process and technology
• Accuracy and improved turnaround times
• Updated MIS and data visibility
• Enhancement of productivity
• Cost saving (or value addition)

Selecting a Vendor to outsource Invoice Data Entry

In any business process outsourcing, selection of the outsourced partner is a key decision. This can be evaluated in two parts:

1.       Capability of the vendor in Invoice data entry services and terms of engagement
2.       Organisational capability and support

Capability of the vendor in Invoice data entry services and terms of engagement

This part of the evaluation is about the vendor’s capability in the process sought to be outsourced. The evaluation process should consider: Prior experience – Have they done similar work for any other client? Prior experience of the vendor shortens the learning curve and will help you achieve a steady-state faster. Client testimonials – External validation is always helpful, particularly from other clients. Knowledge of Accounting and standards – This process is typically a part of the Accounts Payable process of an organisation. At times, there will be a need to interface with the Accounting systems. Knowledge of accounting and commonly followed standards will make the interface easier. Familiarity with Enterprise financial management systems – Similarly, knowledge of systems like SAP and Peoplesoft used by businesses for handling their finance and accounting, is a plus. Multilingual capability – Relevant for businesses that do business in multiple geographies, or hope to expand to them. You cannot go looking for another vendor each time you want to expand. A vendor should be an aid to expansion, not a roadblock. Handling different data sources – The vendor should have the ability to handle data entry from a variety of different sources housing different elements of the information:

•         Scanned image of hard copy invoices
•         Credit and debit notes
•         Sale and purchase invoices and pro-forma invoices
•         Time sheets
•         Claim forms
•         Electronic payment channels

Expertise in related services – Would it add value if the vendor were to provide additional services that may be closely related to Invoice data entry services? Like:

•         Invoice scanning
•         Data entry into client systems
•         Indexing and sorting of Invoices

Industry familiarity – Just like each company is different, each industry is also different from others. Retail is different from Aerospace, Transportation from Staffing, Software from Hotels and FMCG from Pharmaceuticals. Though they would all have a need to issue and pay Invoices if they are in business. As each industry could have its own peculiar requirements and processes, it is helpful if the vendor has familiarity with your industry as that can enable them to hit the ground running when the contract begins. Technology and data security – The vendor should be using technology that is current and demonstrates a willingness to upgrade as technology evolves and changes. Technology is the backbone of the outsourcing world. It is often referred to as Information Technology Enabled Services (ITES). And do so in a secure environment that protects client data from unauthorised access. Turnaround time – The partner should be equipped to deliver the required service speedily. It could be a 24×7 working facility, or it could be a different time zone which facilitates overnight processing, or another suitable arrangement. Free Trial – For most data entry outsourcing arrangements, this serves to bring the outsourcing client onboard and builds confidence. Even more so where the outsourcer is a small business owner. Pricing – Of course, pricing can never be an unimportant consideration in any commercial arrangement. It needs to be ensured that the pricing adds value to the business. Scalability – No organisation wants to turn away business because it could not process fast enough. The vendor needs to be able to ramp up and down, within agreed parameters of course, when required as required by business volumes. With services in over 20 languages, super secure facilities & protocols for data security with ISO certifications (27001:2013 & 9001:2015), a 24×7 workforce already handling thousands of Invoices on a daily basis, and the ability to scale up or down by 50% within 24 hours, Oworkers should be your natural choice for outsourcing your Invoice data entry work.

Organisational capability and support for Invoices data entry solutions

As the outsourced business process will operate under the larger umbrella of the contracting organisation, it is equally important to evaluate those parameters where the larger organisation will play a role in ensuring effective delivery to your process. Financial health of the organisation is essential to ensure continued delivery. If compromised, it will cut corners, leading to delivery issues and the possibility of a sudden stop. Hiring is done at the organisational level. This is normally the case since hiring is an activity that interfaces with the external world. Organisations like to maintain uniformity in their external face. Besides, it is more efficient and economical. The organisation’s hiring engine should be well established and regarded in the community to provide this support. It should provide a quality monitoring support that is external to the processing unit but internal to the organisation. This acts as a check before an issue becomes either a contractual issue or a client issue. Facility Management, to ensure people have a clean and hygienic workplace and access to the physical location where the work is being done, is access controlled, in order that client data is secure. There are many other services that the organisation needs to provide in order that your work can continue smoothly. Like Legal, that ensures compliance with required regulations like General Data Protection Regulation (GDPR). Like Workforce Planning, that ensures all processes are adequately, but not inefficiently, staffed and is able to project future requirements to head off challenges early. Each of them should be evaluated based on the need of the hour. As an established player in this space, with three global delivery centers in two continents, and a strict protocol in place for GDPR compliance for sensitive data, Oworkers’ Invoices data entry solutions are ideally equipped and ready for you when you decide to outsource your Invoice data entry work. With several clients across multiple industries, Oworkers has the expertise that will enable you to get the benefit of accuracy and speed. Oworkers relies on employed staff for delivering on its contracts, and not contractual. It is a desirable place of work in all its locations, with a consistently high Glassdoor rating.

Process to outsource Invoice Data Entry

Selecting the right vendor is a great starting point but a lot more remains to be done. The actual work. And, even before that, the migration of the work to the vendor. In other words, equipping the vendor to do a good job which, eventually, is in your own interest. Outlined here is a recommended process that will enable you to engage a vendor when you decide to outsource, or even when you have started to think about it. It is possible that at the start, as you evaluate vendor capabilities and suitability for your requirement, you could be engaging with more than one potential vendor. It is also possible, depending on the volume of your work, you engage more than one vendor, which also serves as a back-up arrangement for you in case one of them is unable to operate for one reason or another.

Identify Requirement

Many business deals do not succeed because the client (buyer) is not clear on the requirements. What are they buying? Why are they buying? What problem will it solve? What value will it add? Identification of your need is a good starting point. Additionally, some clarity on success (or failure) criteria will be even better.

Advertise requirement to outsource Invoice Data Entry

Once it is clear that you would like to consider outsourcing as an option, you would need to make known to the prospective vendor community about it. This can be done in many different ways:

• Reaching out directly to vendors who may be providing similar services to competitors.
• Advertising in trade circles, if you are a part of them.
• Issuing a Request for Proposal (RFP) which is like a standardised proposal form where you specify the information you are looking for in each proposal.
• Looking up prospective vendors online or through directories like Yellow Pages and informing them one by one of your requirements. They will respond if interested.

Shortlist vendors

By now you would have hopefully received some interest from prospective vendors. If you have been flooded with responses, at this stage, based on information received, you should shortlist down to a few, perhaps two or three, with whom you can engage in a more detailed manner. A B2B engagement is a time-consuming affair. The larger the shortlist the more of your time it will require.

Detailed discussion

This is where the detailed discussions will happen and both parties will be required to share information. In most B2B cases, this will be preceded by the execution of a Non Disclosure Agreement (NDA) which binds both parties to treating the information received as confidential and enjoins them to ensure it is handled with the utmost care. This is the stage where the potential vendor will make a case for being selected, scope of services will be discussed, including indicative pricing.

Shortlist down to 1

After detailed discussions with the shortlisted few, which might require multiple discussions, site visits, interacting with staff members, exploring combinations, negotiating on price and service levels, you will shortlist down to the most suitable vendor to whom you will offer contractual terms, which would have been already discussed during the previous stage. The others will not be rejected at this stage as they may still need to be called upon if this one does not work out for some reason.

Finalise terms and sign contract

The formal agreement is executed based on mutually acceptable terms and conditions.

Trial Run

If a Trial Run has been agreed this would be the time to initiate it. The contract would define the success criteria for this step and the rights of the client and vendor based on various outcomes possible.

Implementation Project Plan to outsource Invoice Data Entry

If this has not been done at the contracting stage, the parties will develop and agree on an Implementation Plan which defines the steps each of them need to take to reach a steady state. In other words, reach a point at which the activities envisaged in the contract are running at the expected level. The timelines are also defined in the Implementation Plan.

Vendor to Identify team, and gear up

The vendor will need to identify the team that will support activities under this contract. The various supporting teams will be informed about the new contract and they will begin to play their roles, like the hiring team will source people, the IT team will work towards a technology handshake with client systems, etc.

Initial training and hand-holding

You will probably need to do the initial training to familiarise the vendor staff on your systems and processes and ensure there is an alignment of objectives. Generally, future training requirements, either on account of replacement of staff or hiring additional staff to cater to increased volumes, will be handled by the vendor.

Begin work, test and then go full steam

Work begins. If volumes are large, there is a ramp-up generally provided for in the Project Plan. Staring slowly, the work gradually ramps up to handle the agreed volumes. This is an indicative sequence of steps and not mandatory. Not all steps will be needed in all cases. In some cases, the sequence could also change, like a Trial Run could happen before a contract is signed. Oworkers provides comprehensive support to clients seeking to outsource Invoice data entry. With experience in the area with clients from different industries, Oworkers is well placed to act as a Consultant right from identification of need and building a case for it, providing information on contractual formats, through to the trial phase, ramp phase and eventual settling down of the process and realisation of investment through delivery on agreed SLAs.