Online Retail Group
Undergoing tremendous growth over recent years, this multi-million pound UK e-commerce company now operates hundreds of international websites selling thousands of goods to consumers. However its acquisition based success means that it has a complex supply base, which took its toll on the efficiency of financial processes – in particular dealing with supplier invoices.
Having reached 10,000 incoming invoices needing to be processed each month, the business had already implemented some improvements to its invoice handing. This included actively converting suppliers from sending paper copies to emailing PDFs, and hand scanning the remaining paper invoices, attaching scanned files to the ledger. But it had reached a tipping point, where these processes were no longer effective and it needed a solution that could scale with its future growth.
The retail company’s key challenges were:
- 20% of supplier invoices were still on paper. While these were a minority, continual growth meant the number was constantly increasing. Paper invoices from across different business entities has to be collected in one in-tray and then sorted by legal entity, then VAT, PO number and duplicate checked, all manually. If either the VAT or PO number was missing or there was a duplicate invoice, a clerk then had to send the invoice back to the supplier. If the invoice was correct, clerks then manually inputted the data into the Sage accounts system. The clerk would then hand write unique reference number onto the paper copy, scan it and upload the file for reference into Sage. This whole process could take around 16 minutes per invoice.
- Although the business had already implemented internal invoice scanning a few years back, invoice matching and data extraction was still being done manually, so the scanning now offered limited efficiencies. And again as business growth continued, internal manual scanning by AP staff became too time consuming.
- As a result of these inefficiencies the AP team were not making good use of their headcount which was impacting performance. While they did not want to reduce staff they needed to find a way of being able to redeploy them onto much more value added tasks.
- Its scanned invoice records were being stored on a company archive drive; retrieving these documents on demand could take six to seven minutes, further slowing down the department’s work.
The company looked at two different solutions to its invoice scanning problem – either manage the project in house by buying the necessary hardware and software to create its own scanning service, or outsource the process to a third party. A cost benefits analysis quickly showed that using a provider would be the most effective option, and the client quickly narrowed its selection down to Cleardata as the most proactive in finding the right solution.
Cleardata provided a full invoice scanning bureau. This means paper and electronic invoices are now redirected to its secure, state of the art scanning facility. Paper invoices are opened, sorted and scanned on arrival. Not only that, Cleardata’s software automatically captures and extracts key information on all invoices (paper and email) such as PO numbers, supplier name, legal entity, invoice type and values, and validates them to the client’s records. This removes any need for manual data entry into Sage.
Cleardata also provides the client with a Cloud Document Management System, with fast Keyhook search, providing instant online access to digital invoices and records, if and when they are needed as supporting evidence.
Cleardata’s invoice scanning service has massively reduced the admin burden on the retailer’s AP team and primed them for continual business growth. In just three months it achieved 60% of its target saving, demonstrating that very rapid improvements could be made.
In terms of headcount redeployment, the client is well on track to achieve the freeing up of six full time staff members from invoice handling, based on managing its current quota of 10,000 invoices per month. These people are already working on higher value projects and tasks.
Finally the use of Keyhook means that archived invoices can be retrieved online in seconds rather than around 6 minutes, cutting waiting times and allowing the team to deal with any relevant enquiries immediately.
The client’s Head of Accounts Payable, said, “Moving our invoice management to Cleardata has proven to be really successful, really quickly. The scan quality is great and stops us needing to do this in-house, but the big additional bonus is that Cleardata also does all of the data extraction and capture, so that critical invoice information can be automatically uploaded into our system rather than having to be keyed in by us.
“We’d thoroughly recommend Cleardata – I can honestly say that the after sales service and attention we have received has been second to none.”