Does your company perform its back-office tasks manually? Then you know how tedious and time-intensive it is to process each document, correct data entry mistakes, and comply with data protection and security regulations.
The good news is, it doesn’t have to be this way. With back-office automation technologies like Intelligent Document Processing (IDP), you can effortlessly automate all your document-related tasks.
Ready to free up more time, save money, and improve your workforce productivity? Read on to learn how to apply back-office automation to your business. Let’s get started!
What Is Back-Office Automation?
Back-office automation refers to using technology to streamline and optimize the internal, often document-related, business processes. IDP stands out as one of the most popular solutions amongst them, as it enables automated data extraction, verification, and entry.
Back-office tasks refer to the administrative tasks within an organization that support its core activities but don’t involve direct customer interaction. Most companies, regardless of their size or industry, have some form of back-office tasks.
Think in terms of filling in the forms, entering data into Excel, managing your company mailbox, or other repetitive tasks that happen on the back end of your business workflow.
Now that you understand the back-office automation definition, let’s look at the differences between back-office automation and business process outsourcing (BPO).
Business Process Outsourcing vs. Back-Office Automation: Which Is Better?
Business Process Outsourcing (BPO) refers to the practice of contracting specific business processes to external service providers. These providers can handle tasks such as data entry and other back-office operations on behalf of your business.
Deciding between business process outsourcing and back-office automation depends on your organization’s goals and available resources since both approaches bring several advantages and considerations to weigh.
Business Process Outsourcing (BPO)
The main advantage of BPO providers is they bring you access to specialized expertise, leading to improved quality and efficiency. Additionally, BPO providers can increase or decrease their allocated resources to meet your needs, allowing for flexibility in case of changing demands.
The main drawback of BPO is the lack of control over your data and processes, which involves giving up some amount of trust to external service providers. Although BPO might offer immediate cost savings, long-term costs can increase over time.
Back-Office Automation
Back-office automation with Optical Character Recognition (OCR) was once standard practice for many document processes. But as technology advanced, new tools like IDP emerged to address the limitations of back-office OCR.
OCR was limited to basic document-to-text conversion. But with IDP, which merges OCR with Artificial Intelligence, you can now automate your entire back-office document workflow. This includes extracting and verifying data from any document type.
With IDP back-office automation, your organization retains control over its processes and data, as automation systems are typically implemented internally. Back-office processing software performs tasks faster and more accurately than humans and can be tailored to meet your requirements and workflows.
While automated back-office systems can significantly decrease errors, boost efficiency, and lower labor costs, they typically demand a substantial initial investment. Consequently, many companies choose pre-built back-office automation software to save costs in the long run.
Having laid out the pros and cons of BPO and back-office automation, let’s take a closer look at the benefits of back-office automation.
What Are the Benefits of Back-Office Automation?
By harnessing the power of technology, your business can automate repetitive tasks to optimize workflows and improve overall productivity. As such, let’s look at the benefits of automating your back-office tasks!
Full Control
With a back-office automation solution, you get to decide what processes to automate and how to handle sensitive data. Compared to BPO, you ensure total control of your processes.
You can choose solutions that follow your security rules and customize document workflows that work well for your business. Additionally, if you want to control where your data is stored and processed, you can always opt for an on-premise installation.
Cost Reductions
Perhaps the most important reason to automate back-office processes is to reduce your operational costs. Some studies suggest that automation can result in savings of up to 60-70% compared to the costs of employing a Full-Time Equivalent (FTE).
Moreover, automating repetitive and mundane tasks reduces the need for manual labor, thus lowering costs associated with hiring, training, and managing employees. With automation, you’re also decreasing the risk of costly mistakes and improving productivity in the process.
Higher Accuracy
Data entry and calculation mistakes often occur due to human error, a common issue in manual processes. With back-office automation software, data entry mistakes are less likely to occur because it ensures consistency and accuracy in handling data.
Compared with manual processes, which may require additional audits or inspections, automation reduces the risk of non-compliance-related errors. Thus, your business can easily adhere to regulatory requirements, which is the next benefit of back-office processing automation software.
Improved Compliance
How can you ensure compliance with regulations like GDPR when you’re not in control of your data? Outsourcing your tasks requires you to put your trust in a third party to handle your data securely, which increases the risk of data breaches.
But with back-office automation software, your data is always protected using strong encryption algorithms, data masking capabilities, and secure access controls. This ensures you remain compliant with relevant regulations while avoiding unnecessary legal issues.
Having laid out the benefits of back-office automation, let’s shift our focus toward the different use cases of back-office automation solutions.
What Are the Use Cases for Back-Office Automation?
In addition to streamlining processes and cutting costs, back-office automation offers lots of applications across various industries. Let’s explore three key use cases where this technology changes the game.
Loyalty and Cashback Processing
Many companies want to incentivize their customers to keep buying their products or services. Two popular methods are cashback and loyalty programs, which typically require participants to submit receipts or provide proof of purchase.
But how can you check each document’s validity to ensure timely issuance of rewards?
By automating loyalty and cashback processing tasks, you can easily check for fraudulent receipts or invoices, check their validity, and avoid unnecessary payments. Luckily, with back-office automation, you can perform any verification process in a snap.
Accounts Payable Automation
One of the most common processes within any company involves moving invoices from an email inbox into accounting or ERP software. This process can be very time-consuming and prone to errors, which can make accounts payable a burden to complete.
Fortunately, by automating accounts payable processes, you can eliminate manual data entry and simplify your invoice processing workflow. How? By automatically capturing data from invoices, cross-validating invoices with purchase orders for two-way matching, and initiating invoice approval workflows without human intervention.
Know Your Customer (KYC) Automation
Per KYC regulations, most companies in the rental, telecom, banking, and insurance sectors must verify the identity of their customers. In the past, this verification process usually involved in-person appointments and lots of paperwork.
But with the advent of technologies such as AI and back office machine learning, it‘s never been easier to verify your customers’ identity. Instead of tirelessly checking documents one by one, the verification now happens automatically thanks to IDP. This saves you time and money and improves customer experience by reducing waiting times for getting started.
Document Verification Automation
In every industry, it’s essential to verify documents to comply with various policies and regulations and prevent potential fraud. But checking each document by hand takes a lot of time and mistakes can happen. What if you miss something? IDP, on the other hand, checks different document types at once and confirms that all the information matches up.
In the insurance sector, automating claims processing saves you hours of manually evaluating each case. Imagine if you could automatically extract and verify data from claim forms, insurance cards, invoices, or even identity documents. This way, you can process all requests in minutes, not hours.
Similarly, in finance, automated mortgage processing lets you approve or reject applications fast, improving overall customer experience. No more unnecessary waiting times when you can automate the verification of documents like proof of residence, contracts, bank statements, or salary slips.
As you can see, back-office automation helps you save time on less important tasks, freeing you up for more meaningful work in any industry. Read on to find out how you can introduce back-office automation in your organization with Klippa!
How to Automate Your Back Office with Klippa
After exploring the transformative potential of back-office automation, it’s clear that your business stands to gain significant advantages by embracing IDP software. However, you need a reliable and efficient solution to unlock the real power of automation.
Say goodbye to manual data entry errors, compliance concerns, and inefficiencies, and embrace the future of back-office automation with Klippa DocHorizon.
With DocHorizon, you can automate back-office workflow in just four steps:
- Upload documents: Choose whichever input source you want, such as email, ERP software, FTP, Google Drive, or any other cloud service. If your documents use the Latin alphabet, you can freely upload them without restrictions.
- Instantly extract and convert data: Enjoy faster data entry, invoice processing, and other back-office tasks. Automatically extract and convert documents into structured formats like JSON, CSV, or XLSX with up to 99% accuracy.
- Verify and protect extracted data: Ensure compliance with GDPR or other privacy regulations with automated data anonymization. Fraud-proof your business with AI-powered fraud detection, or use two-way or three-way matching.
- Forward data: After extracting your data, you can forward it to your preferred systems and apps, such as CRM, ERP, or accounting software for further processing.
Curious how DocHorizon can help you automate your back-office tasks? Simply book a demo below or give us a call for more information.