How do I Use the Purchase Invoice Scanning Feature (Kefron)?

Use a Scanning System to automate the input of your Purchase Invoices and bypass manual Data Entry.

Written By Gerry Mckeown ()

Updated at May 3rd, 2018

1.     Introduction:

Just like the Bank Import and Automatic Reconciliation facility, this feature of the system will result in huge productivity gains to your regular accounts processing by greatly reducing the continued and costly labor-intensive manual keying of Purchase Invoices/Credit Notes.  Instead, by deploying this sub-system, you will replace the manual workload with the automatic entry of OCR Scanned Purchase Invoice details directly into your Purchasing system. 

The vast majority and bulk of your inbound Invoices will, in most cases, arise from a defined group of regular Suppliers (Vendors).  By asking this system to “memorize” the layout of these Invoice and Credit documents from each of these Suppliers (a simple once off effort), you can then utilize the benefits of their subsequent and repeated automatic direct entry into the Purchasing system - either from scanned paper Invoices or from received emailed PDF documents. This program will open the Scanned or Emailed Purchase Invoices, use its OCR (optical character recognition) software to convert the analog images to digital characters and post the results directly into your Purchasing System, field by field, and line by line into the corresponding fields in the Purchasing system tables.  

It works side by side with all the existing features of the system including Invoice Approval (see the Article “How do I Implement Purchasing and/or Batch Payments Approval?”).  A copy of the actual Invoice Image is automatically attached to the transaction and is available to the Approver for scrutiny during the approval process and thereafter for further examination.  In addition, of course, the system continues to facilitate the manual entry of other occasional Invoices from Suppliers (Vendors) who might not be set up for automatic processing through the scanning function. 

You can enter this facility from the “Purchases” Menu in your system by clicking on the Menu Option “OCR Scanning Sub-System” whereupon you will be asked to further login to this system with your email address and your password – which will have been provided to you by your system provider;

2.     Navigating the OCR System:

On successfully logging into the OCR Scanning system you will encounter this screen;

The following explains the purpose and meaning of each of the symbols, starting with those at the top right hand corner of the screen;

And those on the left hand side of the screen;


3.     Uploading Manually Scanned Invoices and Emailed PDFs:

The preparation of the unique “Supplier (Vendor) Invoice Templates” - that is, the defining and memorizing of the layout of the various fields on an new Invoice Image from a previously unknown Supplier (Vendor), are prepared in the background by the system’s own expert staff who will automatically be notified of the arrival of any such previously unknown first-time documents.  They will process this first scanned Invoice received from the new Supplier (Vendor), and using its layout, teach the System where the appropriate fields are located on the Invoice - which Template details will then be retained, stored and applied to the processing of subsequent regular Invoices and Credit Notes from this Supplier (Vendor) without any further human intervention.  This will all automatically happen in the background as part of the service and requires no intervention by you or to you.

The only action required on your part, when engaging with a new Supplier (Vendor), is the creation of a New Supplier’s (Vendors) record in the Accounts System proper by entering the Account Code, Supplier (Vendor) Name & Address, Phones and other relevant details such as Currency, Tax details, Credit Terms, etc.  The OCR Scanning Sub-System accesses the Accounts system every few hours and downloads any new Suppliers (Vendors) by copying the Supplier(Vendor) Name, Account Code, Currency and any other details it needs into its own system – so there is no further need to enter the Supplier (Vendor) details in this sub-system.

N.B.  Although the accounting system is multi-currency and can handle an unlimited number of Currencies, the system permits only a single Currency per Supplier (Vendor) – so if you have a Supplier (Vendor) which you deal with in a number of Currencies then you must set up a different Account for each of the Currencies for that Supplier(Vendor) in the accounting system.  For example, you might have an American Express Account (AMEX) in US Dollars, another one in Euros and a third one in Sterling.  You should therefore set up three different Accounts for AMEX – one for each Currency. Obviously, you will also have to allocate three different Supplier (Vendor) Codes – even though the Supplier (Vendor) Names are the same in each case.  The OCR sub-system, having downloaded the identity of all three will, as well as locating the correct Supplier (Vendor) Name from the Image Invoice, also compare the currency of the Invoice Image with that of the Currency of the Supplier (Vendors) in the accounts system to ensure it has the right Supplier  (Vendors) Account.  

3.1         Uploading Manually Scanned Invoices:  Log in to the sub-system from the “Purchases” Menu.  Where you will immediately encounter the “Dashboard” menu;

To upload one or more scanned Invoices/Credit Notes, click on either of the “Upload” Icons;

Browse to the location on your Desktop or Server where the scanned images are located.  Open each one, or selected group, in turn;

To upload further documents from perhaps another location, simply click anywhere in the shaded area.  When you have finished, click on the “Upload” button in the bottom right hand corner;

You need to allow up to 24 hours for the Invoices to become available for processing.

3.2         Receiving Emailed Invoice PDFs:   On signing up to use this sub-system, your system provider will allocate a specific email address to you for inbound emailed PDFs.  It will be of the form where GMK is your unique identification and vis1299 is the company destination for the inbound Invoices, once processed.  If you have more than one user of this sub-system and/or more than one destination company, then you will be allocated as many email addresses as required.  You should then request all your Suppliers (Vendors) to forward their Invoices or Credit Notes to these email addresses in the form of PDFs.

4.     Managing Rejects:

All Invoices (and Credit Notes), whether manually uploaded or received by email, will automatically undergo OCR processing using the aforementioned retained “Supplier (Vendor) Invoice Templates” and subsequent strict validation.  Most, if not nearly all, of your submitted documents will automatically flow through to the Accounts system proper.  However, some may fail the rigid validation checks and will end up “Awaiting Verification”.  When you subsequently log in to the system you will be presented with this information on the Dashboard Screen;

Click on the highlighted field above to bring up the list of documents awaiting your attention;

Click on the “View” buttons on the right hand side to view the current state of any of the Invoices.  In this example, the Supplier (Vendor) identification is missing - probably because someone forgot to set up this Supplier (Vendor) in the Accounts system.  After this has been done, you can now locate the Supplier (Vendor) from the Drop Down list by typing in the first couple of letters of the Supplier (Vendor) Name (and make sure you have the correct currency).

And when this has been done, you can now re-verify the document, whereupon it will once more undergo the validation checks which include the following; 

>    The “Supplier (Vendor) Invoice Template” will point to the Supplier (Vendor) Name on the image.  The system then checks that the Supplier exists and the Supplier (Vendor) Code is retrieved.

   That the Invoice Number is not a duplicate.

>    The word Invoice or Credit located on the image will determine whether this is a Debit (Invoice) or Credit (Credit Note).

>    Order No. (if any) is extracted.

>    The Invoice Date, which can be in a great many different formats, is valid and translated to the form yyyy-mm-dd.  The Date cannot be greater than the end of the current month.

>    The Currency is usually located, either in words or symbol, somewhere on the image and the “Supplier (Vendor) Invoice Template”, after proper training by the system experts, knows where that is.  If it is not present, then the Currency of the Supplier, is used by default.

>    The Order Date (if present) is extracted and translated to the form yyyy-mm-dd.

   The Total Nett Value, Total Tax and Gross Totals are extracted and must add up.

   For each Line Item, the Quantity times the Unit Price must equal the Net Amount.

>    For each Line Item, the Net amount plus the Tax must equal the Line Total.

   The sum of the Line Item Net values must equal the Total Nett value.

>    The sum of the Line Item Tax values must equal the Total Tax.

>    The sum of the Line Item Total values must equal the Total Gross.

   If there are no Line Items, or the Line Items lack Line Item Prices, then one Line Item will be created by the system containing the Description and the Invoice Totals.

>    Where Tax is only shown at Invoice Total level, then it will be apportioned across the Line Items.

>    Similarly, if other values are missing at Line Item level, the system will do its best to work them out, otherwise the system will create a single Line with the Description, Item Price, Tax, etc. to match the Invoice Totals.

>    There is a slight tolerance built in to overcome rounding issues. 

Here’s another example of a validation failure.  The Invoice Date has been miss-typed on the original Invoice, but you can now correct it using the Drop Down Calendar followed by “Verify”.

Click on “History” Tab to see the full list of validation failures. 

If there are missing items in the interpreted fields on the right hand side – or in the interpreted fields at the bottom, then you can either fill them in manually, or, place the cursor firmly in the field you wish to acquire - whereupon a “cross-hairs” type cursor will appear.  Move the “cross-hairs” to the area on the Invoice Image you want to capture and, with the left hand button held down on the mouse, draw a box around the field you want to capture;

When you release the mouse button the value will appear in the field in the right hand section or in the interpreted fields section at the bottom.  For Line Item fields, you need only do this once.

If the image on the left hand portion of the screen is too small or too imprecise, use these buttons at the top of this screen to zoom in or out in order to enlarge the Invoice image;

Use this button to remove a document entirely from the system (e.g. someone has accidentally sent through a Statement of Account);

And use this button to remove a Line from the Document being processed (but not from the original document image);

Use this button (circled in Red) to invoke various tools.  Note that the system does not yet handle multi-page Invoices and Credit Notes. The tool in the Yellow Square will allow you to save a PDF Image of the Document, and the tool in the Green Square allows you to view the Image in full screen mode.  Press the “Esc” to revert from any of these.

We can also, in this sub-system, examine the Invoice Images which have successfully been processed.   Click on the “Storage” Icon which will bring up the following window from which you can examine any of the previously processed documents;

Click on “View” on the right hand side to present a view of what this sub-system has processed and forwarded to the Accounts System, which is useful in case anomalies arise between the two.  

Using the Drop Down, you can also examine Deleted Documents, Documents awaiting posting into the Accounts System, and so on. You can also Sort and Search on any of the fields presented in the table.

5.     Integration with Purchasing & Purchase Approval:

The vast majority of your Invoices will automatically flow through the scanning process and into the accounts system without intervention by you - whether they’re received in the email account or manually uploaded.   In this section, we’re going to deal with what happens when they appear in the Item Invoices grid in the accounts system. You should already be logged into the Accounts system since you originally accessed the OCR Sub-system from the accounts’ systems’ Purchasing Menu.  Switch to the accounts system by clicking on this tab (or log in again if you have been timed-out);

In fact, you can switch between the two by clicking on either Tab.

Now, from the Main Menu in the Accounts System, choose the “Purchases” Tab, followed by the “Item Invoices” Tab.  Make sure you clear any “Filters” on the right hand side of the screen as well;

This will bring up a list of the outstanding Invoices (and Credit Notes) which are as yet unprocessed or unposted;

The List of outstanding Purchase Invoices presented (which will also include directly entered invoices – i.e. those entered not using the OCR sub-system) will be in Invoice Date Order – so if you want to look at the latest set of Invoices received by the system you should sort the list by the “Creation Date” which is the date the Invoice was received into the Purchasing system.

5.1.        Updating Product Codes, General Ledger Codes and BI Codes: The Invoices sent through to the Purchasing System from the OCR sub-system will most likely have the Supplier’s own Inventory Codes detailed on them.   In addition, the system will, on receipt of the OCR scanned Invoice, allocate the Supplier’s (Vendors) default General Ledger Codes and BI Codes to each line of the scanned Invoice. 

You now have the opportunity to replace these Item Codes, General Ledger Codes and BI Codes before sending on the Invoices for further processing.  This you can do by clicking on the Invoice No. in the list above, and, using the Drop Downs, replace the defaults with the correct values;

There are two fields which you need to expose on the Item Invoices grid (using the Add/Remove Columns feature).  The first is “Created By” which will distinguish those Invoices which have been received from the scanning sub-system from those which have been manually entered.  The former will have “Fileweb” as the source whereas the manually entered invoices will have the name of the person who entered the data (from his login). The second field is “OCR Checked” which will indicate whether or not the Invoice has had its Item Codes, General Ledger Codes, etc. reviewed and updated.  If this field is set to “Checked” then you can send the Invoice for Approval (or not) using the “Actions” drop down on the right hand side of the grid.

When you have finished updating the Invoice with the correct Item Codes, General Ledger Codes, and BI Codes, you should click on this field;

Followed by “Save”.  This will update the status of the “OCR Checked” in the Item Invoices grid to “Checked” and you can now send these Invoices for Approval.

5.2    Switching on Purchase Approval for Scanned Invoices:  Whether or not these Invoices go forward for Approval or not depends on:  a) “Purchase Approval is Enabled” and b) a switch you have set in the “Approval Settings” Tab in the “Company & Details Settings” Menu option under “Setup” in the Main Menu.  OCR scanned Invoices are considered to be “3rd Party Invoices” for this purpose and therefore, if this tick box is empty, then you should by-pass the Approval process.   The Approval Process is documented in the Articles “How do I Implement Purchasing Approval with Budget Holders?” and “How do I Implement Purchasing Approval for Non-Budget Holders?”). 

5.3.        If you haven’t switched on Invoice Approval:   And you don't want to match the Invoice against a Purchase Order, then the Invoice will appear in the Invoice List and await “Posting” into the Suppliers (Vendors) Account;

Against each Invoice, click on the Tick Boxes under “Post” for those Invoices you wish to post to the Suppliers’ (Vendors) Account and when you have completed the selection, then click on the field labelled “Post Selected (Highlighted in Green) to effect the postings.  They will now appear in the Supplier’s (Vendors) Account and also will update the General Ledger.

5.4.        Invoice and Purchase Order Matching:    Follow the procedures detailed above for all OCR Scanned Invoices inclusive of Item Code substitution, etc., - even those for which a Purchase Order exists.  When the OCR Invoice is subsequently posted to the accounts system, the inventory and cost data will be updated by the invoice - just as if the Invoice had arrived without a P.O.   The normal Invoice/Purchase Order matching should not be followed in this instance as it would result in further updating of inventory and the production of a second Invoice for posting to the accounts system.  Instead the P.O. should be closed using the “Actions” on the right hand side of the Orders grid.