VIM Open Text

Vendor invoice management or VIM as it is popularly known is an add on to SAP. VIM is a product of Opentext and it is highly popular module of SAP.

What exactly does VIM do and why is it popular?

Let's look at what exactly do we need from vendors right now?

What do we expect from our AP department? We want them to pay the right amounts, right? We want to pay the right amount to the right vendor e.g. if the vendor invoices us for 100$ We want to make sure we pay that when we pay him money, it is the same amount as the invoice.

It is not going upset him if you pay more obviously 🙂 ,But when your manager
finds out, he/she will be upset, right?

And if you pay the vendor less than the invoice amount of $100, the vendor is going to call us and ask for his payment.

The next thing you want to do is that you want to pay on time. If there are any delays in payments, it is going to be expensive for us because that's going to either make the vendor mad and we might lose out on some business or there might be some penalties that s that we have to pay. So I'm the long run. We are paying a lot more than we should have just because we did not pay on time.

And a lot of times why don't we pay on time? It's because there's a problem with the system may be the invoice hasn't been entered properly. Maybe the invoice hasn't been approved by the right person at the right time people do not know that someone was waiting on them to approve this invoice.

And those are the sort of issues that could happen.

What we want to do is, to reduce our cost.

There are advantages of paying in bulk getting, better payment terms and obviously paying on time as we just discussed would be one of the things that what we want from our AP department.

Let's look at how this Currently works in sap.

 If you get an invoice, it's either going to come through a PO or if you have a direct invoice, you're going to create a FB60 invoice. So, let's see how that happens.

Let’s assume you get this PDF invoice from the vendor.

This is mailed to us and the AP clerk has to enter this in SAP.They will need to look at the at the vendor name on the pdf, then do a drop down in SAP to find that vendor. They could accidentally choose the wrong vendor here. 

Then they need to enter the date in the sap screen. There could be a few dates on the PDF.

The person entering this could take the date and map it in the wrong field which could calculate the wrong discount or it gets paid late etc.

Similarly, the amounts from the pdf have to be entered into SAP. One fat finger could cause the wrong amount to be entered.

Even when everything is entered correctly, the invoice could just be sitting at someone’s desk and not entered in SAP or the AP clerk can only enter the top part of the screen and the bottom part has to be entered by her manager.

Due to this she parks the invoice and then the manager approves, but the manager only gets notified by an instant message which she ignores and then forgets about.

We only find out that the invoice wasn’t entered when the vendors calls for the payment.

So this whole process you can see it's very manual and there are so many more issues that happen with the AP invoices.

Let’s look at what exactly VIM does and how it helps the business. It is important to first understand the pains of the business before understanding the solution.
The vendor needs to send us an invoice. They have two options

1- They can simply email the invoice to an email address and that extracts information from the pdf and creates what is called as a DP.

The OCR solution of VIM reads for e..g the vendor name from the invoice and then finds the vendor number in SAP and enters that in the vendor number field.

It will then look at the invoice data and map it to the SAP invoice date.

The amount is mapped to the amount column and so on.

The system does all the heavy lifting for us. It maps most of the fields and then a DP is created.

Within the DP you can setup various rules, e.g. the invoice gets approved by the initial person and then it goes to the inbox of the coder who will need to enter the G/L account info.

This gets emailed to the coder and their manager can see how many Dps are wtih them, how long have they been sitting with them etc. This makes it much easier to track the flow of the invioces and who needs to take action on this.

In VIM, you can have various rules for e.g. if the DP has cost center A on it, it goes to the HR manager to approve, cost center B goes to the Logistics manager.

The rules can be setup with a lot of detail. E.g. Once the HR manager approves the invoice, it goes to the HR director if the invoice is more than $50,000.

Each approval is captured within the the system, so there is no question of how approved this and when did they approve it later on and you start digging through your old emails and then realize that those emails were already archived.

These pdf invoices are archived and attached to the DP, so you can easily view them later on.

Once all the approvals are done in DP, an FI invoice is created. There are various ways to setup this approval process. I am going through the most common scenario.

Physical mailing of invoices

Apart from emailing, the vendors can also mail the invoices, but rather than manually entering them into SAP, these are scanned using a special scanner and once the invoices are scanned, the DP creation and the workflow process starts.