Tags Data management, Change

The ex-files

So your business is doing well. Almost too well, in fact, for admin to keep up. Robert Horlock of Bacardi-Martini (UK) was determined to tackle the massive paper mountain.

Whatever happened to the "paperless office", that holy grail of business IT? We were all promised that, one day, we would carry everything we needed in a digital format on some light, powerful, mobile device. And while much of that promise has been fulfilled, we’re still filling up our filing cabinets and storerooms with acres of the tree-depleting stuff.

For many businesses, invoicing is the biggest paper generator of them all, to say nothing of the staff time involved in chasing, sorting and processing them all.

Processing invoices may be a tedious administrative necessity, but for a fast-growing company, it can become an unnecessarily complicated, time-consuming nightmare. Failure to keep track of invoices can result in late payments, which can damage your company's reputation, lose you business and, worst of all, land your business in a mess of litigation. An efficient invoicing system, by contrast, can free up valuable staff resources, cut down on delays and errors, and improve transparency across the board.

Surely the time has come for a change? It certainly was for Bacardi-Martini Ltd, one of the UK's leading drinks producers and distributors. With a product range including Bacardi rums, Martini vermouth, Bombay Sapphire gin, Jack Daniel’s and several other premium spirit brands, the company receives thousands of invoices each month for goods and services. These range from office stationery and IT equipment to travel expenses and the raw materials used in drinks manufacturing.

Until relatively recently the company relied on an outdated and cumbersome manual invoice processing system. The daily barrage of invoices was hand-coded in the accounts payable department before being distributed through the company's internal mail system for approval by the relevant personnel.

Once signed, the invoices would then have to be returned to the accounts department for entry into the central financial system. Since many of the invoice signatories were home-based sales staff, this approval process could take days, weeks and sometimes months to complete.

And during the process, there was no easy way for accounts payable to see the status of a particular invoice. There were frequent delays in the approval cycle when a relevant manager was out of the office or the invoice was sitting with the wrong person.

It wasn't a pretty picture. According to Robert Horlock, business solutions manager at Bacardi-Martini (UK), the old system was time-consuming, difficult to manage and represented a significant drain on the company’s administrative resources. There was only one thing for it: "We conducted an exercise to gauge how much time was being lost as a result of using the manual system."

The result? "The accounts payable team was spending one day in every five on the administration of chasing up paper invoices and overdue approvals," Horlock explains. "Workflow would frequently break down because documents were getting mislaid or because a signatory was not available. Invoices sometimes got lost and sometimes got paid twice."

For a company trying to maintain the operating ethos and attention to detail of a family-run business while rapidly expanding its multinational operations, this just wasn't good enough. Three years ago, Bacardi-Martini moved to an automated Scanning and Electronic Approval System (SEAS), working with IBM Premier Business Partner Intec to find the best way out of the administrative morass.

Building on IBM Lotus Domino, SEAS enabled the accounts department at Bacardi-Martini to scan all incoming invoices, coding them with the supplier name and the internal approver. An alert could then be automatically emailed to the internal approver, with a link to the invoice. The approver was able to code the invoice before the system automatically notified the accounts payable department.

The new system, says Horlock, has significantly reduced the man-hours dedicated to invoice processing at Bacardi-Martini: "We previously had four people working on this process, each of them spending one day in five chasing up invoices. It’s now down to two and a half people."

In addition to freeing up resources in the accounts team, SEAS improved the transparency of the invoice approval process. The system keeps a full record of events associated with each invoice, automatically chasing up overdue approvals. Accounts Payable can now track the exact status of all invoices at any time, with full visibility over all the documents in the electronic system.

"The finance team can now always see where an invoice is, who has it and what stage of the process it is at," he says. "Invoices never get lost and we never have to ask our suppliers for duplicate invoices any more. The entire system has not only been speeded up but is also greatly enhanced in its reliability, efficiency and transparency."

Horlock believes that Bacardi-Martini's experience could easily be transferred to smaller companies. He cites, in particular, the flexibility and bespoke nature of the system.

"SEAS can be used as a stand-alone database, with scanning at the front end, with no need to be integrated with other company systems. We had already built our corporate messaging platform on IBM Lotus Notes and Domino, so we engaged Intec to adapt its Lotus Domino-based SEAS solution for our specific requirements."

"The new generation of Lotus products provides unprecedented benefits in collaborative working, which many businesses don’t realise," says Tim Malone of Intec. "By integrating email, presence awareness, workflow and approval, processes that are traditionally manual or paper based can be simplified and transformed. The reusable components of these solutions then become assets, which can easily be applied to other areas of business, enabling them to react more quickly while increasing visibility and control.

"By using an open platform like Domino, the process of integrating data with legacy or ERP systems becomes much simpler, removing the need to rekey and enabling an end-to-end solution."

These days, says Horlock, paper files at Bacardi-Martini (UK)'s Southampton head office are shrinking fast: "Invoices are archived as electronic copies, which are recognised as legal documents by our auditors – so there's no need to keep paper documents for seven years as was previously the case. Although this hasn’t been applied retrospectively, the number of paper files has been shrinking by the year since we implemented the system."

This is welcome news for SMBs, as rapid growth doesn't have to be accompanied by more office and storage space. And as automated invoice processing increases in popularity, the "paperless office" could finally become a reality.

Where next?

For more information, contact Intec Systems Limited

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