Streamlining Purchase-to-Pay and Order-to-Cash
Streamlining purchase-to-pay and order-to-cash processes is at the top of every organization’s to-do list. The P2P and O2C cycles are rife with inefficiencies that can be addressed with the right technology, especially when these processes are paper-based and highly manual.
In this article, we detail the story of one IntelliChief customer whose severe paper overload wrought internal havoc on their businesses, resulting in misfiled documents, lost invoices, and customer service delays. Their solution included:
- IntelliChief Enterprise
- IntelliChief for Infor XA
- IntelliChief Capture
- IntelliChief for Accounts Payable
- IntelliChief for Order Processing
- FastFax
Focusing on the Process to Improve Profitability
Here is the justification for this particular customer’s Purchase-to-Pay and Order-to-Cash project according to their Accounting Manager:
“We were looking to improve processes to save time and money and improve how we dealt with customers and how we did our daily jobs. Our ultimate goal was to find a way to improve the bottom line, to improve profitability.”
This company’s solution search party asked their ERP provider to recommend a content management and process automation solution. They recommended IntelliChief on the basis of its feature-rich capabilities and seamless integration with their ERP system. However, a simple recommendation wasn’t enough to obtain project approval. For that, the CEO and CFO wanted evidence of real ROI, including reduced costs for:
- Labor
- Faxing
- Postage
- Check Stock
- Paper
- Storage
“Neither the CEO or CFO wanted to see any soft dollars. We were able to show there were big savings, which could be used to improve profitability and services, and those were hard dollars.”
Therefore, the first challenge was streamlining the Purchase-to-Pay process, from purchasing to receiving and Accounts Payable. When creating POs, buyers printed them, emailed or faxed them to the vendor, stapled the confirmation receipt to the PO, and put everything in a basket to wait for confirmation. This process took up to 4 hours (on a good day). Clearly, something needed to change. Here’s our approach:
Streamlining Purchase-to-Pay
The cumbersome, time-consuming steps were eliminated with IntelliChief and a new, streamlined P2P process was established:
- A Purchase Order is created
- An electronic copy is saved
- FastFax (an integrated fax server for IntelliChief) faxes or emails the PO without user intervention
- Order Acknowledgments, received by fax or email, are archived in the IntelliChief database and linked to the appropriate PO
Not only is the P2P process streamlined but all documents can be retrieved on familiar ERP screens at any time by IntelliChief users.
Before IntelliChief, incoming products had receiving documents matched against POs, keyed into the ERP, and filed. When invoices arrived in Accounts Payable, invoices were matched against the receiving record in the system. If there was a discrepancy, AP staff needed to look for the original receiving documents to determine if they had been incorrectly entered into the ERP — or if the invoice was wrong. Consider these remarks by one Accounts Payable Associate:
“If the purchase had been made by one of our other facilities, I had to call them to send me a copy of the receiving documents, so I could match, review everything associated, and find out what happened.”
Today, after documents are matched in the warehouse and a receiving record has been created in the ERP, the receiving documents are scanned into IntelliChief, eliminating the need for hard copies and ensuring they are digitally available without the need to send physical paper to Accounts Payable.
Innovation All Across Accounts Payable
Let’s break down a few ways this customer streamlined Accounts Payable:
Every Invoice Accounted For
- Faxed invoices are captured via FastFax and archived
- Mailed invoices are scanned
- Emailed invoices are saved with the easy-to-use IntelliChief Capture application
Automated Invoice Matching
- IntelliChief automatically matches invoices against receiving documents and sends them to an electronic inbox (“Matched Invoices”)
- Similarly, invoices without a receiving document go to an “Unmatched Invoices” inbox
- These invoices are subsequently matched manually or rerouted into workflow once the PO is available
“Previously, every day I had to pull up the folder and try to match invoices. That was a big pain. With IntelliChief, the invoices are awaiting electronic matching with the receiver, as if they were saying, ‘Hey, here we are!’ It’s a tremendous time saver.”
Prior to IntelliChief, an insurmountable paper trail prevented invoices that needed quck approvals. Copies were made by AP staff, sent to the appropriate manager for approval, and returned to AP for a voucher.
“When invoices make it back to us, I had to contact each person to verify they received it, approved it, and sent it back. Sometimes invoices were paid late, or we couldn’t take advantage of vendor discounts because we couldn’t make the deadline. IntelliChief now electronically forwards invoices or approval to the correct person. They approve it with a single click. With IntelliChief’s automated workflow, the company has put an end to missing invoices, delays and unachieved discount savings.”
When Accounts Payable wanted to pay invoices, Accounts Payableagain had to match paper documents. Associates could spend upwards of half the day manually matching invoices and checks to be approved and signed by senior staff. This meant manually searching through filing cabinets for correct invoices and putting them in a folder with the corresponding check.
IntelliChief saves checks as an electronic image and manages them in workflow. It’s secure, simple, and streamlined.
“IntelliChief automates our check production; checks go via Workflow to senior staff, and they can simply click and look up the relevant documentation on-screen and either approve or void the check.”
Order Processing Pains
The second challenge was sales orders, which flowed in via fax, email, and postal mail. They were manually routed to the Traffic Group for review and carrier information access and logged before going to Order Entry. Then, they were sent back to the Customer Service Representative (CSR) or manager with any questions or when a discount required approval.
Here’s what the Customer Service Manager had to say about it:
“There was no way to know where in the process the order was at any given time, until it was put into the system. Sometimes we had to ask the customer to re-send, which you can imagine they weren’t very happy about. Then the workflow-by-hand is a tedious process, having to constantly ask staff in various departments where the order presently is, and where it’s going next. It slowed our fulfillment.”
After the order was entered, an acknowledgment was printed, proofed, and compared to the PO. Once approved, a CSR made a copy, faxed or mailed it to the customer, and filed the copy with the PO. It was slow, inefficient, and costly. Fortunately, it was also fixed.
Order Processing Done Right
With IntelliChief, order processing is efficient. Faxed orders are captured with FastFax, mailed orders are scanned into the system, and emailed orders are saved with IntelliChief’s easy-to-use capture capabilities. Every single document is archived in the IntelliChief database.
Electronic orders are sent to Order Entry or the CSR via workflow. Once in workflow, the order is routed to Traffic and then to Order Entry. IntelliChief creates and saves the Acknowledgment, which is faxed or emailed directly to the customer.
“We now have only 3 people involved in the process rather than 7 previously, and we always know exactly where the order is. IntelliChief cut our order process time in half.”
When customers called with questions about invoices, CSRs had to request a copy from Accounting. According to the Accounting Manager, this was also problematic:
“Prior to IntelliChief, the invoice had to be pulled from the files, which could take minutes or hours, and then logged. The order history (original PO, any change orders, acknowledgments, and all related documents) is now electronic. We can view order status through IntelliChief and see where any bottlenecks are. We can see if orders are not being entered. Invoices are emailed to customers, saving postage, labor, and mailing costs.”
IntelliChief Provides ROI and Intangible Benefits
IntelliChief provides the company both ROI and intangible benefits. Here’s what they said:
“It helped decrease the stress level! Being able to really see what’s happening, to see where holdups are is incredible. From a management standpoint, that’s a measurable benefit to me.”
But that’s not all:
We can’t wait until next year when the independent auditors come in. We’ll provide them with a workstation accessing IntelliChief, and they can do document searches without involving any of our Accounting staff.”
Banking on a Paperless Future? Start With Purchase-to-Pay and Order-to-Cash
Implementing process automation is admittedly a procedural shift. But in time, employees, managers, and business leaders can all agree that it makes life easier for everyone.
“The idea of not having paper anymore for some people was difficult to overcome, initially. They now understand automation is a real advantage for all of us, with how we serve our customers, and everyone realizes the competitive advantage it provides us.”
