Automating the Purchase-to-Pay Process

You have to spend money to make money, which is why Accounts Payable has long been considered the crux of an organization’s operational capabilities. Automating the Purchase-to-Pay process is one of the most effective measures SMEs and large enterprises can take to streamline Invoice Processing, improve vendor relations, and eliminate tedious, manual tasks. Below, we explore how one company achieved unheralded levels of productivity by automating the Purchase-to-Pay process.

Landoll Corporation Aims to Improve the Purchase-to-Pay Process

Landoll Corporation’s history can be traced back to humble beginnings in 1963. Starting as a small company with only three employees, Landoll’s founders never imagined that their company would grow to become a global leader in innovative product design for agriculture, transportation, material handling, OEM, military, and government sectors — but through hard work and diligence, it did just that. Today, Landoll continues to innovate by developing some of the most durable and high-quality farm equipment, construction equipment, and trailers available.

Over the last half-century, Landoll has faced many challenges in its bid for growth. One seemingly constant detriment to Landoll’s success was the manual, paper-based processes hindering progress in Accounts Payable. Landoll’s Invoice volume was astronomical, making timely vendor payments an exception, rather than the rule.

“When I looked at the size and scope of the business process that we had become entangled, I decided we had to develop a paperless business model.” — John C. Schmidt, Group Manager at Landoll

This realization began the search for a solution that would allow Landoll to automate the Purchase-to-Pay process. After multiple rounds of due diligence, Landoll settled on IntelliChief as their go-forward solution for P2P automation. Leveraging the robust Content Management and Workflow Automation capabilities of IntelliChief’s Enterprise Content Management (ECM) platform, Landoll was able to automate the Purchase-to-Pay process to save time and money.

“The point to be made is this — buyers should be focusing on the buying process and developing quality vendors with the ability to deliver products on time at competitive prices, not shuffling paper between departments and staff.”

Getting Started With Paperless Purchasing

IntelliChief was implemented to streamline Landoll’s Purchase-to-Pay process. This would be accomplished by eliminating the need for paper, starting with the purchasing phase. Here’s how it works:

  • A Purchase Order is created in the company’s Infor ERP application
  • The PO is merged with an electronic form that is faxed or emailed automatically based on the vendor’s preference
  • The PO is electronically archived in IntelliChief’s secure, digital repository

Paperless Purchasing Benefits

IntelliChief’s advanced Optical Character Recognition (OCR) software client, Capture Enterprise, enabled Landoll to capture key information from transactional documentation. With comprehensive AI capabilities, Capture Enterprise makes all transactional data usable, whether structured or unstructured.

IntelliChief’s highly intelligent OCR software extracts data from all paper, fax, and email documents and automatically populates processing fields in IntelliChief. This information is then verified against the data stored in Landoll’s Infor ERP. This data is indexed and archived, as are the corresponding image files.

Consider this scenario involving Order Acknowledgements:

If a buyer gets an email response from a supplier stating, ‘We have received your PO and we will ship as expected by the requested date,’ it is considerably more efficient to capture the Acknowledgment in IntelliChief with the purchase documentation collection, instead of filing it in a drawer with the PO.”

Here’s how IntelliChief helped address this scenario:

“If a problem with the shipment occurs, the buyer can pull up the PO in IntelliChief and see all related documents and determine the source of the problem. When the vendor is contacted, all the purchase information is available to the buyer, allowing for a quick resolution. The same process is applied to vendors, quotes and pricing. Capturing it all in IntelliChief is a significant time saver.”

Handling Purchasing Discrepancies

When materials are received, the receiving documents are also electronically captured. The same processing occurs with Bills of Lading and related Packing Slips. IntelliChief doesn’t care what type of document is being captured, it captures all information indiscriminately and archives it automatically according to pre-existing business rules that leverage machine learning to get smarter over time.

Why is this important? It allows IntelliChief to connect receiving documents with the corresponding PO and any other related documentation. Without any manual labor, a full transactional record or “digital paper trail” is formed. When Landoll processors retrieve any document from this record, they will instantly have access to related documents — making the process of handling purchasing discrepancies a total breeze.  Read on for more comments from John C. Schmidt, Group Manager at Landoll:

“For orders to have items that were back-ordered or shipped incorrectly, IntelliChief’s workflow can expedite resolution of these issues in an efficient manner. When there’s a discrepancy in the Packing Slip, it can be electronically routed to the specific buyer. It’s very easy and cost-effective when compared to our paper process days.”

Schmidt also pointed out another important benefit of going paperless:

“In the past, we used 15 filing cabinets and a warehouse to store our purchasing documents. With IntelliChief, we have no filing cabinets nor are we moving any files to the warehouse. The square footage previously occupied with filing cabinets in the AP Department is now being used for additional, much-needed meeting space. Filing time of the past is now directed to more productive purposes.”

Before IntelliChief, Landoll relied on two full-time employees to manage the filing, searching, and retrieving of Purchase Orders, quotes, and vendor-related information. Now, these employees have been reassigned within the company. Instead of tedious, manual data entry and file management, they are making strategic contributions to the company.

Payment Scheduling Optimization

IntelliChief also assists Landoll with payment scheduling and scheduling optimization. Before IntelliChief, Invoices that arrived via mail, fax, or email would eventually be manually printed, sorted, marked up, and distributed by Landoll’s Accounts Payable staff. Every day, an average of 100 Invoices were processed via this method. The process was highly manual, resulting in countless wasted man-hours in AP.

Whenever a discrepancy occurred, an AP processor would send a paper copy of the Invoice to the appropriate buyer for resolution, stalling AP processing until it was returned. Meanwhile, an Excel spreadsheet was utilized as a log to track the Invoices requiring resolution. This file would then be sent to managers for review and approval — more manual work to increase processing time.

This highly manual approval process meant Invoices were being handled four to five times each, resulting in poor payment scheduling optimization and:

  • Late payment penalties
  • Missed early payment discounts
  • Slow processing times
  • Frustrated vendors
  • Manual processing errors

Finally, after an Invoice was approved and a check was cut, it was matched against a duplicate copy of the check and filed in the filing cabinets by vendor name. But those were the old days, and Landoll had no intention of looking back. Just ask Susan Slater, AP Supervisor at Landoll:

“Now, Invoices that arrive via fax are electronically captured and are routed to the appropriate AP staffer’s electronic inbox. Mailed Invoices are processed and scanned by Administrators, who then index them with the appropriate vendor and PO number. IntelliChief’s workflow process routes the Invoice to the appropriate AP staff’s inbox. Emailed Invoices are captured with Capture Enterprise, with email and attachments sent to the imaging database.” — Susan Slater, Accounts Payable Supervisor at Landoll

With IntelliChief, payment scheduling optimization is enabled with visibility provided through IntelliChief’s industry-leading integration capabilities. Invoices are now sorted to determine which ones to pay first. Attempting this with the old paper system proved difficult and inefficient.

This entire electronic procedure for capturing and routing Invoices helps speed up the process. It is essential to receiving early payment discounts, accounting for considerable capital annually.”

If there is a need to review past transactions or any documents associated with it, IntelliChief’s search function retrieves the required information by the vendor number, PO number, Invoice number, or any other relevant metadata.

Expanding Beyond the Purchase-to-Pay Process With IntelliChief

With IntelliChief, Landoll’s digital transformation had begun. Leveraging results from their P2P Automation, Landoll set its sights on expanding IntelliChief utilization to other departments, business units, and processes, such as its Order-to-Cash operations. Landoll has enabled everyone from Sales, Customer Service, Order Processing, Invoicing, and Collections to go paperless with IntelliChief.

Do you want to learn more about automating your company’s Purchase-to-Pay Process? Contact IntelliChief today to learn more about our P2P Automation solutions.