Making Your List and Checking It Twice: The Cost of NOT Automating

When looking for ways to reduce spending and find savings, financial leaders know that automation is the answer. But according to Deloitte, “As the automation market matures, leadership teams are realizing that digital arbitrage and cost savings achieved through automation are just the tip of the iceberg of value realization.”

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ROI, Yes…But What Else?

Yes, process automation is the way of the future and most certainly can help a company cut costs, reduce redundancies, and identify pain points in their workflow. But the ways in which automation can contribute to an optimized workforce, who can then invest their time in more high value tasks (building vendor relationships, addressing problems within the workflow, and finding more purchasing value across the business), are just as critical to the success of your organization. Deloitte has found that “business leaders are looking beyond just tangible and quantifiable ROI and are making decisions to approve and fund automation initiatives based on more holistic business cases that include additional qualitative measures of success. They are looking to automation to increase the capacity and enrich the careers of their highly skilled human capital (e.g., credentialed professionals, such as certified public accountants, or others with advanced degrees). They are also keenly aware that having employees work in concert with automation allows them to achieve greater process excellence and derive more insight into the organization.”

Case In Point

Take the example of Merchants Fleet, who provides fleet leasing of vehicles and fleet management to their clients. Headquartered in Hooksett, NH, with an Innovation Center in Rosemont, IL, Merchants Fleet has nearly tripled their business in the past 5 years, making them one of the fastest growing private companies in America. In 2017 they processed approximately 134,000 invoices. They knew their financial processes were outdated and their workflow was riddled with inefficiencies.

According to Kristin Parshay, Senior Director and Controller at Merchants Fleet, “We gathered a cross functional team of customers of our process in addition to our folks that are responsible for the day to day of paying invoices, and we took a step back and we asked ourselves where are our problems?” The team identified the following critical issues:

  • 100% manual and paper processing
  • Redundancy in processing
  • Missed prompt pay/rebate opportunities
  • Reactive spend management/lack of approval process
  • Lack of visibility: vendor terms, invoices in process (accruals), lack of vendor rationalization across business units
  • Time sensitive nature for visibility within customer portal
  • Multiple ERP systems: Great Plains, Leasewave, and Host

Once Merchants Fleet identified the workflow pain points they knew:

  • They had been trying to solve the problem for 2-3 years
  • They were lacking a high-level road map
  • They wanted to reduce data entry duties and spend more time on business analysis
  • They wanted to avoid additional FTE’s to support growth
  • They wanted to enforce financial controls
  • They had limited internal resources
  • They wanted touchless processing on custom fields
  • They were a rapidly growing company with rapidly increasing invoicing

Knowing that AP automation was the key to solving their problems, they started to quantify the savings of implementing an automation plan. Merchants Fleet figured out that without automation they were spending $30 on processing per invoice. With just low-level automation, that cost per invoice fell to $15, and with high-level automation each invoice would only cost $10 to process. Since their business was rapidly growing and invoice volume was ramping up, Merchants Fleet needed to realize significant cost savings per invoice.

Driving Home the Value

After selecting a partner who could provide a tailored solution to their unique situation and implement automation quickly (DataServ!), Merchants Fleet was able to modernize their financial processes and make their workflow much more efficient. Their automation transformation provided them with the following cost savings and efficiencies:

  • Integrated direct and indirect spend from 2 different teams with 2 different rule sets (2 unique processes)
  • Visibility across multiple business units into a single system
  • 15 days of additional visibility into their invoice processing
  • Future state staffing model of 1 FTE per 4,000 invoices vs. 1 FTE per 1,100 invoices
  • 100% digital environment
  • No touch processing that eliminated the need to enter invoices into 4 different systems
  • Reliance on tribal knowledge

Not only were the savings numerous and the pain points reduced across the workflow, but automation has allowed Merchant Fleet’s skilled employees to focus on more valuable work instead of paper pushing and manual data entry. Now that automation has freed up her FTE’s to focus on high-level work, Parshay has seen a more fulfilled, more effective workforce. “At the end of the day, we now have a place that we can go to where we can control the chaos. Who has what? Where is it in the process? What has already been paid? It allows us to get more into those analytical exercises rather than the clerical tasks.”

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