Turner Industries Automates Accounts Payable Invoice Processing and Enhances Cash Flow Management with Kofax Intelligent Capture & Exchange

As implemented, Turner's centralized A/P process begins with the issuance of a purchase order to a vendor by the ERP software, an event that triggers the concurrent creation of a purchase order receiver. This document must be signed by an internal staff member to confirm delivery of the products or services specified in the purchase order.

If any documents are missing when it's time to pay an invoice, the central A/P processors may contact either the vendor or the appropriate division to obtain them. These documents can be mailed or faxed; in the latter case, the faxes are captured by the Kofax software just as if they were scanned. For payables that do not require a purchase order, such as utility bills, an email-based approval process is used. These emails are imported by Kofax Capture, converted to TIFF images and then indexed.

In all cases, the images of the documents, faxes, or emails go through Kofax Intelligent Capture & Exchange's quality control process to ensure they are properly oriented and indexed before they are released and automatically forwarded into DocuSphere.

"This quality control process is really just a double-checking," Naquin says, "because Kofax VirtualReScan (VRS) automatically improves image quality fingerprints, smudges, hard-to-read color shadings, and even wrinkles are almost all removed. This way, when the images are finally stored and processed, we never have any legibility problems."

Benefits, Benefits, And More Benefits
Each month, Turner captures and processes as many as 15,000 vendor invoices, each with an average of 10 pages of support documentation. When this was a paper-based vouchering process spread across 15 or 20 office locations, about one percent of these documents were lost, misplaced, or illegible and needed to be re-created in a process that cost, on average, $150 per document. "What this means," Naquin says, "is that our imaging solution is saving us $270,000 each year by ensuring all documents are always available, when we need them."

In addition, with A/P operations now centralized, Turner has been able to eliminate duplicated resources and optimize the productivity of processors by eliminating filing and copying time. The bottom line:  nine full-time positions have been cut from the A/P payroll, yielding an additional annual savings of $270,000.

"While these savings are certainly large, also impressive are savings attributed to reduced physical storage space both on and off-site, and to a sizable reduction in paper consumption for copying," Naquin says. "At the same time, faxing and mailing costs have also been slashed. Overall, we have calculated a 33.09 percent reduction in direct processing costs."

Equally important are the benefits the Kofax solution has provided on the client invoicing and relationship-management side. "For the first time," Naquin says, "we have the ability to aggregate vendor invoices and support documents and invoice our clients and in many cases be paid by them before we have to pay our vendors. Why? Because where it used to take as long as 57 days to match vendor invoices and receivers, a process that has to be completed before we can invoice clients, we can now do all matches in eight to nine days. By offering clients terms of net 30, and giving vendors net 45, we now have dramatically improved cash flow management."

Their capture solution has also empowered Turner to send clients electronic invoices that make it easy for them to track and store the information they need for downstream auditing and compliance processes. "In the past," Naquin explains, "we used to send clients paper copies of all documents. And every invoice we sent them could contain as many as 100 vendor invoices, or well over 500 pages. Besides the copying costs on our side, this approach created a host of filing and storage issues for our clients. But now, with electronic images, we have the ability to send clients a CD containing a searchable index so they can swiftly and easily find whatever information they need, whenever they need it. This saves them both time and money, and differentiates our services in a competitive industry."

The Solution
Another benefit of Kofax solution is its scalability. "Having seen the huge benefits of capture in A/P, we are already leveraging the platform into other operational areas of our company and will continue to do so," Naquin says.

In Turner's pipe fabrication division, for example, engineering drawings are now scanned and stored in the content management repository with documentation of all the steps taken to make that pipe meet client requirements. These images are then submitted to clients on CDs with searchable indexes when the pipe is delivered, again eliminating the need for customers to store, track, and manage large volumes of paper.