Since 1979, AIT Worldwide Logistics has been providing companies the optimum in reliable and cost-effective transportation and logistics solutions. The global
transportation and logistics provider headquartered in Itasca, Illinois, delivers tailored transportation solutions for the unique applications and delivery service requirements of individual customers.
Today, AIT is a customer-focused enterprise spanning 36 nationwide locations and 330 global service centers. AIT employs over 830 employees and services over 4,000 active worldwide accounts for a wide variety of vertical markets and industries. The company’s accounts payable department, located in Itasca, has a staff of 13 employees and processes approximately 192,000 invoices annually.
Challenges with Paper
AIT was suffering from a decentralized, manual process when it came to invoice receipt and processing. Invoices received at the mailroom were opened and date stamped after which the accounts payable staff sorted the invoices alphabetically by vendor name. There was also a nightly priority sort performed on the invoices using a number of parameters including invoice date, urgent, cash, airlines and discount vendors. AP staff spent in excess of 8 hours just prepping the invoices for entry, after which the invoice information was manually entered into the accounting system. AIT was facing a number of challenges with this paper-intensive process:
• The invoice entry process took between three to four weeks, missing any discount opportunities offered by vendors.
• Four to six weeks delays in payments and inability to pay vendors resulting in a high number of overnight payments.
• Significant number of invoices that was lost or missing.
• Increased phone calls from vendors to inquire into invoice and payment status.
Search for Automation
AIT increased staff size to address the inefficiencies in the process, resulting in higher payroll costs, but was unable to address the issues inherent to paper processing merely with more people. In 2004, AIT started investigating automation options to decrease data entry, centralize invoice receipt and have a mechanism of checks and balances for invoices. AIT went live with the ReadSoft DOCUMENTS for Invoices solution in July 2004. After thoroughly investigating many AP automation options, the company selected ReadSoft as its provider of choice for the following reasons:
• ReadSoft’s solution would allow AIT to improve the turnaround time of invoice processing while reducing errors and allowing the company to reallocate AP staff members to other functional positions.
• Other products considered by AIT required templates to be built for each invoice, whereas ReadSoft’s solution was more advanced and able to learn as the software built a knowledge base of invoices processed.
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• AIT was impressed with the many avenues ReadSoft offered for continuing education.
• AIT realized that ReadSoft DOCUMENTS could be expanded into other departments, such as remittance processing, cash
applications, statement processing and its perishables department. The AP process has been significantly streamlined after implementing the ReadSoft solution. The mailroom still receives all documents, where the invoices are separated and forwarded to the AP department. AP staff them open the mail and prepare the invoices for scanning. The prep time before data entry has been tremendously reduced and is now completed in less than four hours.
Invoices are now scanned by single or multiple page, landscape or duplex. Once scanned, optical character recognition (OCR) is used to extract data from invoices. All vendors and their specifications are programmed into the database by creating a knowledge-base through Optimization, which is the fundamental element of invoice verification.
The processor then selects the correct queue for scanning, after which, Interpretation is preformed that places invoices into alpha letters for verification. Reference number and dollar are matched and processors can easily select multiple line items on each invoice with the dollar amount. The Manager module shows the distribution of invoices by alpha letters, which is reviewed to verify that a transfer has occurred. The staff then determines what letters will be worked for that particular day.
Reaping the Benefits
AIT has achieved a number of benefits from the ReadSoft implementation including: • Increased productivity resulting in reduction in staff levels.
• Ability to slash the invoice entry turn-around time from three to four weeks to less than three days.
• An organized workflow that facilitates routing and approval of invoices electronically.
• Acceleration of the invoice receipt-to-pay cycle translating to better ability to meet vendor terms and enhanced discount capture.
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Workflow
Automation
Selecting a Solution
While all IWA solution providers seek to deliver operational and strategic benefits to organizations through their solutions, they differ significantly in their approach. Some of the vendors offer solutions that address the entire invoice receipt-to-pay cycle, while others focus their attention more heavily on the front-end data capture or the workflow management areas. Some vendors offer their solutions in Software-as-a- Service or outsourcing formats, while others deliver their solutions via a software license model.
Each vendor in this space is pursuing a unique strategy calculated to enable it to shape the development of the market and adapt to changes taking place within it. To help readers distinguish between the diverse vendor strategies and identify solutions for further investigation, we now provide information on factors that determine the solution of choice that can be used to compare solutions across vendors.