This North American food production company has big expansion plans—recent acquisitions have put the company on track to double the size of its business and become a top-20 food and beverage company.
Growth will bring lucrative opportunities for the company to increase its presence on supermarket shelves and strengthen competitiveness. However, it is also creating fresh challenges for the teams who work to keep operations running smoothly behind the scenes, such as accounts payable (AP).
A spokesperson at the company’s AP department explained: “We work with around 2,500 different suppliers, who provide everything from the ingredients that go into our products to office supplies for thousands of employees. These vendors form a key link in our supply chain—without them, we’d struggle to keep shelves stocked with our products—so it’s vital that we pay them correctly and on time for the goods and services they provide.
“In the past, we relied on a mostly manual, paper-driven approach to processing supplier invoices. We were handling around 6,000 to 7,000 invoices a month—a number that was growing fast—and we recognized that our old approach was quickly becoming unsustainable.”
Previously, when the company received paper invoices, the AP team would ship the documents in batches to a third-party provider for scanning. Once it had scanned and classified the original documents, the provider would return electronic copies. The AP team would then review the invoice and complete processing in the company’s core SAP ERP system.
“Because so much of the process was manual and reliant on paper, it took considerable time and effort to handle invoicing—sometimes it could take up to a month for us to process and pay a single paper invoice,” said the spokesperson. “And without a consistent way of storing and managing invoices, there was a risk of losing individual documents in the shuffle; if this happened, we’d have to start the process all over from scratch and incur further delays.”
This food manufacturer decided to digitize and automate the end-to-end invoicing process and chose Kofax ReadSoft Invoice Portal as the key enabler for this new approach. An advanced optical character recognition (OCR) and data capture platform, Kofax ReadSoft Invoice Portal automates the scanning, classification and filing of invoice data.
The company has done away with pushing paper; whether invoices are delivered by post, fax or email, AP teams take advantage of the Kofax solution to extract and validate key data from invoice documents automatically and transfer it to SAP ERP for processing.
“Kofax ReadSoft Invoice Portal is an amazing tool; it really is a one-stop-shop for invoice processing,” remarked the spokesperson. “Our staff no longer have to deal with piles of paper and electronic files scattered across different file systems and email inboxes—all the information they need is instantly available in one central location.
“We’ve been very impressed by the solution’s search capabilities—we can search for invoices by purchase order [PO] number, vendor code or vendor name, and even browse for invoices received within a specific timeframe. Thanks to Kofax ReadSoft Invoice Portal, it couldn’t be easier to find information.”
For invoices sent by email, the company has set up a single, dedicated inbox and leverages Kofax ReadSoft Collector to sort incoming messages into different folders upon delivery for easier search and management. For example, all invoices sent by suppliers of marketing services are sent to a ‘Marketing’ folder. The Kofax solution also detects email attachments and instantly transfers them to the core Kofax ReadSoft Invoice Portal system for data capture and validation.
To boost invoicing accuracy, this food manufacturer uses three-way matching capabilities provided by Kofax ReadSoft Process Director to compare information from each vendor invoice against corresponding PO and master data in SAP. If any issues are found, such as inaccurate quantities, prices that do not match up or damaged goods, the system will automatically notify the appropriate team member, so he or she can resolve the discrepancy before submitting the invoice for payment.
Kofax solutions have helped this leading food producer bring unprecedented control and transparency to the end-to-end invoicing lifecycle.
“We have gained a whole new level of insight into our AP operations,” said the spokesperson. “We now have full traceability of each and every invoice, so we can see when a specific invoice was received, and how long it has spent at every stage in the cycle. We have also set up reminders that notify users when a certain invoice has been pending action with them for more than five days. This ensures items are not overlooked and helps our team keep invoices moving through the system steadily.”
The spokesperson adds: “The improved visibility also helps us track and manage enterprise performance much more effectively. Take accruals for example. Instead of having to go through hundreds of invoices one by one and manually add up the expenses, we can simply select the files we require in Kofax ReadSoft Invoice Portal and export one report with all the relevant data. Previously, it took at least four to six hours to complete a single set of accruals; now we get the same work done in about two minutes, which is a tremendous achievement.”
The new approach to invoice capture and processing has supercharged the productivity of the AP team at the company—accelerating purchase-to-pay timelines and helping the department take on rising business volumes while keeping resources lean.
“With Kofax solutions we can process invoices faster and with fewer resources than before,” explained the spokesperson. “Instead of it taking up to a month to pay invoices like it did in the past, today we can complete the entire process—from invoice receipt to sending out payment to a vendor—in just five to ten days.
“The efficiency gains mean that our team can now process six to seven invoices in the time that it used to take to process a single invoice before. This increase in productivity has allowed us to absorb a huge rise in business volumes. We’ve gone from handling around 6,000 to 7,000 invoices a month with about six and a half full-time employees (FTEs) to processing some 13,000 invoices a month with eight employees. So, we’ve effectively doubled our volumes while increasing headcount by one and a half FTEs, which is an exceptional outcome, and one that surpassed our expectations.
“Between the reduced costs we have seen through higher productivity and the savings we have made by bringing archiving in house, we have been able to achieve a complete return on investment on the Kofax solutions within one year.”
In addition, a more automated and streamlined approach to invoice processing has eased the burden of repetitive manual work on the AP team and freed up more time for controllers to focus on higher-value activities.
“Before, there were times when it was a real challenge to stay on top of our work in AP, especially during busy periods,” recalled the spokesperson. “Today, invoice processing is a much smoother and controlled process, which creates a far better working environment for our team. People are no longer rushed off their feet and have more time to look for efficiencies, and build relationships with our vendors, which helps strengthen the business as a whole.”
For this food manufacturer’s suppliers, more efficient AP processes translate into better quality of service.
The spokesperson concluded: “Now that we have improved visibility into each and every invoice, if a vendor calls requesting a status update, our team can give them an answer right away—there’s no need to put that vendor on hold, or follow up later in an email, as we can bring up all the information related to their account in seconds.
“With Kofax ReadSoft Invoice Portal helping us power fast, accurate invoicing, we can make sure suppliers are paid correctly and on time, increasing their satisfaction and their likelihood of continuing to do business with us. Ultimately, this helps us keep our supply chain running efficiently, so we can continue to deliver great-tasting food and beverages to customers all across North America.”