Global Manufacturing Company Automates Accounts Payable Workflow with JobRouter
BACKGROUND: Operational Complexity
One of the world’s leading manufacturers of engines and propulsion systems for distributed power generation systems wanted to automate their accounts payable workflow process. Their current vendor invoice management process was 100% paper-based. The process insufficient controls and was highly labor-intensive. In addition to the accounts payable staff , more than 600 employees were involved in supplier invoice approvals.
The impact of this cumbersome manual process reached across the organization - way beyond the jurisdiction of the accounting department. Furthermore, the company had undergone a number of acquisitions, mergers, and divestitures over the past 10 years. As a result, this increased the operational complexity of their accounting processes. Finally, the company's international manufacturing, distribution and service model means that their suppliers are located all over the world and deal in multiple currencies.
CHALLENGE: SAP Validation Restrictions
The company uses SAP as its enterprise software solution. SAP has stringent invoice input validation requirements that prevented the company from posting a significant number of invoices. Invoices were rejected for having incomplete, inconsistent, or incorrect information when reconciled with purchase orders. As a result, there was no way to track the company’s invoice liability within SAP. Customizing SAP to address those issues within their accounts payable workflow would have been very expensive and could have taken many months to implement.
CHALLENGE: Bottlenecks and Risk
The company was getting approximately 200 supplier invoices every day. These invoice were all manually processed. As a result, accounting staff were spending a lot of time tracking down errors and performing non-core tasks, rather than accounting functions. Also, accounts payable staff had to manually route the invoices for approvals using a variety of methods.
Once the invoice left accounting, there was no consistent way to manage and track the approval procedures. Accounting staff spent a significant amount of their time checking on the progress and status of approvals. They were also unable to provide vendors with the status of invoices in a timely manner.
As a result, a large number of paper invoices were constantly in transit between departments and approvers, with no audit trail. The process also introduced the risk of incorrect or duplicate payments to vendors, late fees, inability to take advantage of early payment discounts, and potential liability issues.
JobRouter Chosen As BPM and Workflow Platform
SOLUTION: Removing Bottlenecks and Risk Quickly
Business process consultants from managed service provider Secure-24 conducted a multi-day workshop with the company. The output of these workshops was to clearly define the accounts payable workflows needed and to re-engineer and optimize the process. Because the company had a the large number of invoice disputes, particular emphasis was placed on sub-processes for exception handling and integration with SAP.
The JobRouter Suite was selected as the BPM (Business Process Management) platform to develop a custom solution for their accounts payable workflow process for a number of reasons.
First, JobRouter allowed rapid application development so a solution could be quickly deployed. The project was implemented within weeks, rather than the months it would have taken to customize SAP or integrate a third-party product.
Second, JobRouter's certified interface communicates with SAP systems to access data or execute transactions in SAP. These processes can be modeled independently of SAP. As a result, no SAP access is required for the involved users. Learn more about JobRouter and SAP.
Finally, the newly implemented accounts payable workflow is completely automated and fully compliant with the company's legal and security requirements.
SOLUTION: Cost Effective, Secure Private Cloud Deployment
The company did not want to run the new A/P system on-premise. By choosing a cloud implementation, they placed their system in Secure-24’s state-of-the-art data center, managed and operated with the highest standards of security, compliance, and application availability.
SOLUTION: Additional Document Support Services
JobRouter Partner, Secure-24 further supports the company with added document conversion and management services. Invoices are physically picked up at the customer site, then scanned, indexed, and stored in a document management and workflow system on a daily basis.
SOLUTION: Faster Processing & Greater Control and Visibility
VALIDATION & APPROVALS: Once invoices are input into the new A/P system, the accounts payable workflow automatically checks for duplicate invoices and correct purchase order assignment. JobRouter routes the invoice to accounting for reconciliation with open purchase orders and goods receipts, then on to the appropriate individual and department for approval.
ESCALATIONS: Automatic workflow escalation and notifications ensures that invoices are processed in a timely manner. All invoices waiting for approvals also appear in the appropriate reports that are available for supervisors.
COST SAVINGS: The new accounts payable workflow solution has significantly decreased the amount of time required to process an invoice. The company had enjoyed immediate and significant cost savings.
VISIBILITY & REPORTS: Accounting staff can now quickly access all invoices electronically, and view and track the status. They can also track invoices by supplier and generate monthly and ad-hoc reports.
COMPLIANCE: This solution enables the company to be fully compliant. JobRouter has a built-in audit trail the reduces the liabilities associated with invoice management. Learn more about JobRouter and Compliance.