How OCR Service Can Lower The Cost Of Processing A Freight Bill By Eliminating Manual Data Entry

OCRSERVICEBUREAU.com

Author Kevin V. McQueen Internet Fax and OCR Service Bureau Professional

The transportation industry has been no stranger to the financial pressures of the economy long before the current recession. From 1990-2000 the transportation index lagged behind the S&P 500 by 8%. With rising fuel cost, Government pressure on emissions, and a two year recession, recent years has not been without their challenges either. So managing the cost side of the business is crucial to protect its already thin margins. By using an OCR Service Bureau solution, the cost of Data Entry for Billing can be significantly reduced, while also benefiting by digitally linking support documentation like a POD or tally sheet to the original invoice for efficient retrieval.

According to a study written by Ernst & Young found in The Journal of Corporate Accounting & Finance, There are three major administrative costs in processing a freight Bill.

• First, is the Data Entry for billing which includes activities like collecting and compiling data and data entry into a carrier´s billing system to create the invoice

• Next, there is the creation and delivery of the invoice

• Lastly, there is Exception Resolution.

An OCR Service Bureau solution can provide cost cutting means for data entry and exception resolution. Read how….

What is the true cost of processing an invoice? According to the National Clearing House Association (NACHA) companies pay a range of $2 to $5 dollars to create and deliver a single paper invoice, and another $10 to process payment. If a dispute arises, it can cost up to $15 per dispute do to communication typically involving phone and fax in sharing information. A Gartner study in 2000 cites cost of $2.66 per dispute. According to a 2001 study by Ernst & Young across a diverse carrier group ranging from sales of $35.6 million to $11.9 billion in revenue, the average cost per invoice was approximately $3.68 per invoice. This did not include the financial cost carrying the debt or bad debt expenses.

The OCR Service Bureau Solution

Using an OCR Service Bureau can dramatically lower the cost of processing a freight bill via eliminating manual data entry. The OCR Service core business is lifting data from an image as efficiently and accurately as possible. This involves both a sophisticated data extraction work flow as well as database lookups to validate key fields like customer rating and ship to information. Cost savings should range from 30-60% for direct cost and can vary widely on indirect cost due to a customer´s existing environment. Indirect cost include examples like IT support for hardware and software used for manual data entry, as well as the cost of mistakes caused by manual data entry. Some questions to consider regarding mistakes. How often are invoices audited for accuracy? Do your customers call you and tell you when they are overcharged? Do they also then call you and tell you when you undercharged? What about the cost of a pickup or delivery going to the wrong location? By programmatically building business logic and database lookups into the process of generating and processing an invoice, checks and balances can be incorporated into the solution to eliminate mistakes. Using an image archiving system to link freight bill documents together allows for fast and efficient retrieval of forms to quickly resolve disputes; but by eliminating mistakes on the front end of the process, fewer disputes will arise.

The advantages of using an OCR Service Bureau are compelling. Advantages include;

• Processing of unstructured documents (I.E. many paper formats)

• State of the art work flow and OCR technologies

• No capital expenditures

• Reduced direct and indirect cost of processing

• Service guarantees and thus no solution risk as with software implementations (I.E. will it work)

• Measurable, quantified transactional cost

• Optional lockbox service

By outsourcing the data entry portion of your invoice document management processing, you benefit from economies of scale offered by the Service bureau, and reduce your cost of processing. Costly mistakes caused by manual data entry can be eliminated. An invoice processing solution can integrate both creation and processing of invoices by integrating data entry, lockbox and image archiving. Contact us for more information on automating your paper processing.

OCRSERVICEBUREAU.com