There is a tendency to yawn when hearing about AP- Accounts Payable, unless it’s your life! But, are you interested in having costs post to your jobs sooner and with fewer errors? Can you benefit from faster job cost backup documentation retrieval? Would you like Accounting and Finance people to stop hunting you down for lost vendor invoices? If the answer to any of these questions is YES, read on…
As part of a Lean Process Improvement Initiative Accounts Payable (AP) and Billing have studied areas of potential waste and errors. Based on this data a major area for improvement was identified: vendor / supplier invoice handling. The current process is slowing down both the AP and Billing process.
When a vendor / supplier invoice was received at Jamar (Duluth) via mail, fax or email it was being “handled” up to five times before entered into WebApps for payment. This multiple handling and routing process was the root cause of several errors:
- Delayed job cost posting, which impacts the customer billing process
- Missed “early pay discounts” offered by vendor/suppliers, resulting in > $10K loss a year
- Many invoices were lost which created hours of re-work to reconcile vendor/supplier accounts
Beginning in January of this year, Kayla Johnson, Jr. Accountant and former AP Specialist, worked with the Lean Team to design an alternative process for handling incoming vendor / supplier invoices. It became clear that a technology component could automate part of the process. John Willett, APi Information Systems Specialist and Miguel Martinez, APi Application Specialist, offered the solution “Kofax, a document capture interface” that was being used by 16 other APi Companies.
With the implementation of the document capture interface the new process:
- Scans and saves (to SharePoint) incoming invoices the same day they are received.
- Allows for SharePoint metadata entry during the saving process reduces look-up and retrieval time of invoices for all stakeholders (Billers, DM /PMs, etc.).
- Aids both in office and in the field invoice look up and retrieval via smart phone/Ipad technology.
- Eliminates the need for multiple paper copies of invoices by using the scans in SharePoint
- Tracks the approval process of invoices and sees comments attached to each invoice virtually
“The new process meets the needs of AP and Billers, but I was hesitant as it’s a big process change, actually it’s a paradigm shift from how we have been using SharePoint . The addition of metadata to scans stored in SharePoint makes it much more than just a storage location for documents.” said Susan Quam, Jamar Controller. “The use of a document capture interface for payables will accelerate our learning curve when Insight is deployed,” Quam adds.
The team – Kayla Johnson, Jamar Jr Accountant; Mindy Schoenborn, Quality Control Asst. & Jamar SharePoint Administrator; Cindy Martins, Process Analyst; Elliot Schaff, Information Systems Specialist – gathered data and documented the “current state” and talked with process stakeholders in the Duluth and Green Bay offices prior to the start of the three-month Pilot (test phase). The Pilot included the Service Department, all Asdco locations, and the Green Bay office is just starting the Pilot phase. Each group involved was provided training on the new process and SharePoint training before the start of the Pilot.
“The new process had to provide an improvement from the current state to the future state by reducing handling time and saving hard dollars…without adding more time to the front end of the process,” according to Cindy Martins, Process Analyst. “The metrics from the three month pilot show that we are on target with this goal. Both the front desk open and scan time, and the time of the service biller, was not increased and lost invoices were eliminated – which saves hard dollars,” states Martins.
Beginning on December 1st of this year all departments at Jamar will be trained on this new process and on basic SharePoint features and how to use metadata. The total transition to the SharePoint AP process will take two to three months.
The big question about the new process is… will this replace the “Pink Folders?” According to Kayla Johnson, “the new process has the potential to eliminate the pink folders, but first we have to get all departments up and running with the new process. I think once everyone is use to handling less paper and looking up information in SharePoint, printing only what they need, we will focus on the pink folders going virtual!”