How KE Electrical added technology and automation to
accelerate and simplify invoice reconciliations
Problem
Supplier invoicing errors were getting out of hand costing KE Electrical on average over $50,000 a year in material pricing errors and hundreds of hours spent on manually reviewing invoices and getting them refunded.
Solution
KE Electrical implemented a 2-tier internal controls process that included technology and automation to accelerate and simplify their invoice reconciliations.
CHALLENGE
With an average of 180 invoices
per month coming in from various suppliers, KE Electrical was wasting hours of
unnecessary time reviewing each line item on the invoices manually. In one year
alone, they had over 7500 invoice items to review. Errors can go undetected and
are missed if you do not have qualified and knowledgeable staff reviewing each
invoice, keeping them from focusing on high payoff activities that generate
revenue. Once that lengthy and drawn out process was complete, they still had
the difficult task of disputing the charges with their suppliers.
Solution
01
Automation
They started with getting a quoted price list for day to day
material from each of their trusted suppliers. This provided the company with
assurance that all materials purchased for any job will be invoiced at the
price quoted - no matter how the material was ordered and who did the ordering.
Then, they used ePRO360 to automate the process of checking every item price on
all their invoices. What used to take over 15 hours per month, now only takes 1
hour to complete!
02
Technology
They implemented a proper purchase order policy in which each
order must follow for all jobs – both project and service work. With their
quoted prices for day to day material centralized within ePRO360, they were
able to delegate the purchasing process to the foremen running the job sites.
Using a unique PO number for each order and entering/scanning every item,
ePRO360’s automated 3-way matching module compared every purchase order item to
its invoice to automatically find any invoicing errors. Errors such as wrong
product charged, different quantities invoiced, and incorrect prices were
caught and addressed. This saved the accounts payable team close to 50 hours
per month in printing and manually matching POs to invoices, tracking purchase
order copies, chasing project managers for approvals and manually typing out
the invoicing errors for the suppliers to review.
90%
Reduction in the amount of time being spent on price checking each
invoice every month.
50 Hours
Saved per month in printing and manually matching POs to invoices & chasing project managers for approvals.
$14,000
Added to their bottom line each year from automating their invoice payment processing.
RESULTS
The ePRO360 price checking automation module reduced the time KE Electrical was spending on checking every invoice by 91% and increased their productivity significantly. The impact of not having to do manual data entry nor price approvals of every invoice has improved morale and kept the team from getting bogged down with repetitive invoice checking. This freed up over 176 hours for KE Electrical allowing them to direct this saved time on more profit generating functions within the company. ePRO360 gave management the confidence to delegate material ordering at the site level by implementing technology to control ordering limits, require approvals and provide real time visibility into all material ordering.
