“The first rule of any technology used in a business is that automation applied to an efficient operation will magnify the efficiency. The second is that automation applied to an inefficient operation will magnify the inefficiency.” – Bill Gates
The way of the world today is to establish as many strategies as possible to increase efficiency in the workplace. New technology is allowing companies to become more streamlined and to minimize manual processes, especially in their accounts payable (AP) and accounts receivable (AR) departments. One way these departments are becoming more efficient is by going paperless with a document management system, which helps businesses manage time more effectively, utilize the full functionality of their ERP solution and improve business processes.
The benefits of a document management solution in AP and AR were made apparent when major steel distributor, Leeco Steel, went paperless in both their AP and AR departments after integrating a document management and workflow solution with their ERP software.
Because Leeco Steel has been experiencing significant growth over the years, its executives decided that, rather than adding more staff to the AP and AR departments, it would be more beneficial to streamline the processes and make them more efficient.
“A lot happened at the end of 2013,” CFO Mark Krzmarzick said. “We saw a lot of growth and we didn’t want to just add more people, we needed to make everybody more efficient in preparation for our growth.”
Leeco went out in search of a paperless document management solution to:
- Increase employee efficiency
- Simplify AP processes
- Streamline AR processes
- Make the AP process more transparent
- Increase billing accuracy
- Find a scalable solution that could apply to other departments
The solution that Leeco was looking for would allow them web access, as well as the ability for the company’s IT department to manage their own system to reduce costs. Additionally, implementing the solution would help eliminate the risk of losing documents and misfiling papers, as well as minimize manual data entry and curtail the mistakes that come with it.
Leeco chose to automate their AP processes with the intention of expanding the solution into other departments and creating a more efficient workflow.
Leeco’s document management solution managed all of their invoices, both print and electronic. Invoices were indexed, routed and archived electronically, eliminating the need for manila folders and filing cabinets. While many paper documents are lost forever after filing, the automated process keeps invoices and other documents meticulously organized, always on-hand and searchable. Employees are able to use time more efficiently rather than wasting time with tedious manual data entry.
Prior to implementing the paperless ERP, the AR department had been enduring a multi-step process to manage documents. Once the automated workflow was put into place, they were able to reduce the number of steps in the process and, rather than sending out multiple emails to clients and customers, they were able to send out one all-inclusive email with all the content that had previously been sent individually.
The results of the implementation were astounding. Leeco Steel, which had previously been processing approximately 3,000 invoices, was now able to process 3,600, a 20 percent increase. Additionally, Leeco’s daily Received Not Invoiced (RNI) report, or accrued payables, which was previously documenting $8 million worth of unpaid materials was reduced to only $1 million. The document management solution has helped reduce the number of incorrectly vouchered receipts in the RNI report and has saved the AP department time and improved accuracy.
If better time-management, increased efficiency, cost-savings and reduced environmental impact were among your New Year’s resolutions, it may be the time to start exploring the benefits of a paperless document management solution.