Organizations that automate their AP process are experiencing significant benefits. AP automation allows organizations to process invoices electronically from capture and matching, to invoice approval, and query management. AP Automation removes time-consuming and costly tasks from often disorganized processes with little visibility. As organizations realize these benefits they face the question: how do we successfully automate our AP process?
So, how would an organization do this? Where would a finance department even start? How for example, did Grafton Group plc double their productivity by automating their Account Payable process?
Why Automate The AP Process?
Grafton Group plc is an international distributor of building materials to trade customers primarily engaged in residential construction and maintenance. The company has a turnover in excess of £2.2 billion, employs over 12,000 people in the UK, Ireland, Belgium and Netherlands and a 600 branch network.
Before we discuss the how, let’s take a look into why Grafton Group plc decided to invest in automating their AP process.
1. Lots of invoices being received in a number of different locations
The organization had 200,000 invoices coming into 35 different locations around Europe. This meant that Grafton Group plc needed to employ over 100 approvers to keep up with the demand.
2. Poor invoice resolution times
The invoice approval process took typically more than 40 days. This caused slow payment to vendors, a lack of visibility, and delays in the accruals process.
Management had no visibility into their AP process. It was hard to tell where a particular invoice was at any given point in time. This made it hard for decision-makers to generate actionable business insights to inform strategic decisions.
How Did Grafton Group plc Automate The AP Process?
Here are three of the major changes that Grafton Group plc made to their AP process to combat these challenges.
As is the case with the majority of organizations, Grafton Group plc receive invoices in both paper and electronic format. This meant that somebody had to manually input data points to the ERP system which is time-consuming and often prone to errors. Grafton Group leveraged Intelligent Character Recognition (ICR) technology to read all data from invoices and automatically create an electronic version.
Through P2P automation, the organization was able to eliminate manual and duplicate processes. They now have increased visibility and more control over their corporate spend. AP automation replaces manual, paper-based processes and spreadsheets, and removes time-consuming and costly tasks.
Migrating to the Cloud
Grafton Group has moved all of their AP data to the cloud instead of being on a local network. This means that anybody within the organization can access information from anywhere in the world, on any device, which eliminates bottlenecks in the process. Suppliers of Grafton Group plc can now also remotely access their data and documents.
As the Grafton Group has grown through multiple acquisitions, they have increased the number of ERP systems being used. This made it very difficult and time-consuming for the finance team to access data and gain a holistic view of the AP process. The company now manages a range of financial processes on one single platform which delivers a complete view of all financial data via one interface. E-invoicing, supplier management, and analytics are all managed within a single platform which is integrated with their ERP.
What Results Did They Experience?
Grafton Group began their AP automation journey in 2013. Since then, they have experienced tremendous results ranging from improved supplier relationships to cost and time savings. Take a look at some of their specific results:
- 100% improvement in productivity.
- Grafton Group now automatically match 75% of all of their invoices. This means that the invoices will run straight through the AP process without any manual intervention.
- The invoice approval process which was typically more than 40 days, now only takes 10 days.
- The finance team has 24/7 full visibility over the entire AP process, from anywhere in the world. Decision-makers have access to an extensive dashboard reporting the KPIs that are important to the organization.
Considering that this is a company with over 12,000 employees and over £2 Billion in revenue, you can really appreciate the significance of these improvements. Technology has affected almost every area of business and it is now time for AP to benefit and seize the opportunity. You can learn more about Grafton Group plc’s story here.