Telstra Streamlines Accounts Payable System with SAP Financials

Sydney, AustraliaManaging and processing 75,000 invoices in 64 different locations a month can be a major operational issue especially when tax audit time comes.

Telstra found itself in this situation in the early 1990s when it conducted an internal audit to determine the readiness of its internal systems to a full-blown operational audit.

“It became obvious to us that with more than 60 sites processing thousands of invoices a day there’s a high probability that we might not find some documents when we need them,” said Neal Rolfe, Regional Manager, Corporate Wide Shared Services at Telstra.

Telstra took the initiative to consolidate its processing sites and implement an electronic document storage and retrieval system using image archiving linked to its SAP accounts payable system. “The project was mainly aimed at improving operational efficiencies and ensuring that our procedures were within industry standards. But as we went along and rolled out the system, the cost savings followed,” Rolfe said.

Telstra considered document imaging as the logical solution to the high volume accounts payable system, which at that time was employing about 400 people in the accounts payable process.

About two years ago the complex processing of invoices by manual keying was replaced through the implementation of an Intelligent Character Recognition (ICR) system integrated into its SAP financial system.

Despite the lack of any reference site that would show an automated accounts payable system at work, Telstra pushed through with the project and became one of the first Australian users of its size to implement an ICR system for its invoice processing.

“Our SAP backbone provided a perfect platform for advanced applications such as imaging and electronic invoicing,” Rolfe said.

Telstra’s accounts payable source documentation is now linked to the SAP financial system, which enables Telstra users to monitor the status of invoices electronically, and more importantly, to view the source documentation on-line.

The efficiencies gained through its SAP software used in conjunction with image storage and ICR means that invoices are processed on the same day that they’re received, ultimately cutting the processing time.

Rolfe said the image capture and ICR systems delivered a lot of benefits both for Telstra internally and for their suppliers. For one, because all invoices received in accounts payable are processed same day, supplier payments are made on time resulting in fewer enquiries to the accounts payable area.

It also enabled employees to do their job with better efficiency and utilise their accounts payable skills to resolve payment issues rather then be involved in the non-value add process of keying data.

“Overall the electronic systems have worked very well. We accomplished all the objectives we set out to do and we generated additional benefits in terms of substantial cost savings,” Rolfe said.

Rolfe and his team are now looking at the next step to make the system even better.

Telstra had also become a good reference site for other Australian companies that are considering ICR to improve efficiency and to cut costs. Rolfe recently presented Telstra’s successful implementation during an e-Business/e-Document seminar jointly sponsored by SAP, Ixos Software Australia, Readsoft, Esker Software and Atos Origin.