RS Components meets the challenge with an automated invoice initiative

REFERENCE The ReadSoft effect on: rs components Solution: invoice processing in sap story INDUSTRY: distribution Country: united kingdom RS Components meets the challenge with an automated invoice initiative Working with suppliers, as well as customers, is a key success factor at RS Components (RS). Part of Electrocomponents plc, RS is a global business with operating companies based in over 25 countries, distributing to over 160 countries worldwide. With an ever increasing range of over 270,000 products, this can present a challenge for the finance team, based in Corby, Northamptonshire, when it comes to invoicing suppliers. Sally Adams, Head of UK Finance at RS puts this into context, “The UK finance team handles around 50,000 supplier invoices a month, typically made up of 47,000 stock and 3,000 short-listing of three potential suppliers, with RS selecting non-stock, from 4,000 vendors. This means that we a combined solution from ReadSoft and Cogent potentially pay out more than £30 million a month in eight Consulting. ReadSoft’s invoices is the most widely used different currencies.” solution for invoice processing into SAP®. Cogent Consulting is a leading consultancy in automating Europe-wide SAP platform Accounts Payable Invoice Processing for SAP customers. The company has a Europe-wide SAP® Enterprise Resource Planning (ERP) system, successfully implemented in nine With the decision made, RS embarked on what Sally describes territories (including the UK) between December 2005 and as a ‘journey’. “We recognised that we would have to address May 2007. At the UK operation, around 20 full-time AP clerks a number of issues to do with our processes and the system,” were involved in manually posting supplier invoices to the SAP she explains, “Vendor invoices come in all types and formats system. so we had to ensure that the system was optimised to avoid inconsistencies in the input and approval processes. A system “We needed to save costs and recognised that the use of that would enable all invoices to go through automatically technology for automated invoice processing and approval without manual intervention – true ‘touchless’ processing”. would enable us to meet that goal and further leverage the advantages of our SAP platform,” said Stuart Leveridge, The invoice automation solution from ReadSoft and Cogent Accounts Payable Manager at RS. provided RS with: Equally important to RS was the ability to develop the roles • An automated invoice entry process to eliminate keying within the AP team, increasing the level of ‘value added’ tasks • Complete centralised control by AP of all supplier invoice and job satisfaction to ensure, what Sally Adams describes, as ‘a processes continuous improvement culture’. “This would involve the AP • Complete integration with SAP, including workflow team in handling less invoices and more account management • Electronic archiving of invoice documents for retrieval of suppliers,” she explains. • Elimination of filing or retrieval of paper invoices • Ability to use electronic workflow for subsequent invoice ‘Best in class’ invoice automation approvals processing RS therefore looked at ways to implement an automated • Rapid invoice verification and query resolution invoice solution. Responses to an ‘Invitation to Tender’ led to the • Tools for continuous improvement of invoice processes. REFERENCE The ReadSoft effect on: RS components Solution: invoice processing in sap story INDUSTRY: distribution Country: united kingdom Maximising the benefits on account management of suppliers, develop different skill Discussing the challenges faced, RS, ReadSoft and sets and make a more valuable contribution to the business in Cogent decided to take the approach of terms of our ongoing improvement programme.” introducing new methodologies to the scanning process, such as added supplier fields to help reduce issues with VAT The automation has obviously had a significant impact on or currency differences. employment costs, reducing by 36% per annum since the start of the project. “Having automated invoice approvals and online “Working together to enhance the system enabled both stock storage of documents also favourably impacts our productivity and non-stock invoices to be integrated into a fully automated and bottom line,” adds Sally. “There are also benefits in terms process within SAP”, states Stuart Leveridge. “There’s no doubt of auditing and compliance.” that working with SAP-integrated software and SAP consulting expertise has allowed us to maximise the benefits of what was Future plans a complex project.” In terms of next steps, Sally and her team are looking at further improvements that involve suppliers. “Whilst so far we have He continues, “Further system and process improvements over been focused purely on processing paper supplier invoices, we time have ensured the ongoing success of the project, and are now looking at how email invoices can also be brought into have involved clearly defined targets and performance metrics the process. We’re confident that this is the next step as the being met.” solution provided by ReadSoft and Cogent can automate the processing of electronic as well as paper invoices.” Results Results are the litmus test of any project. Sally Adams states, She concludes: “Improved service to internal customers and “We have reduced the number of FTEs (full time employees) suppliers is the number one focus for this project. Our UK in AP from 20 to 10, whilst increasing the number of invoices team achieved ‘star awards’ for ongoing process improvements processed from 42,000 to 55,000 per month. Up to 90% of and we want to continue to be seen here as innovators with- invoices go through the system automatically, so we only need in our global organisation. The system we have in place from to verify 10%. That means our team can spend more time ReadSoft and Cogent will enable us to achieve that.” About RS Components RS Components is a catalogue-based distributor of Electronic, Electrical, Electromechanical and Industrial Components. Founded in 1937, RS is part of holding company Electrocomponents plc, which is a global business supporting over a million engineers. It has operating companies based in over 25 countries, including France, Italy, Germany and Denmark, with operations as far a field as Chile, Singapore, Australia and China, and distributes to over 160 Winner at the East Midlands National Training Awards 2008 and countries worldwide. the award for Contact Centre of the Year at the Customer Service Awards 2008. Since it began, RS has had the simple objective of providing a part for every job, from research and development through pre-produc- About ReadSoft tion to maintenance and repair. As those jobs have diversified and Established in 1991, ReadSoft was first to bring free form become even more complex, RS has developed its offering and services technology for invoice processing to market and first to achieve accordingly. certifications to ERP systems such as SAP and Oracle. ReadSoft has become the global technology leader, with operations in New technology also plays an important part.