Does the invoice need to be paid or not? Banks need to be particularly careful when answering this question, because while other enterprises handle their transfers via their company bank and are able to stop payment orders, banks are simultaneously the executing entity and the money is debited immediately.
At Bank Of Ireland Group (BOI), a leading financial institution with assets of €126 billion and over 16,000 employees, , invoice verification and release previously involved a great deal of manual work and paper. While the bank’s Shared Services Center was the central point of receipt for all invoices, the processing of them was complex and labor-intensive. To handle incomplete or problem invoices, employees in the Shared Services Center first had to use the purchase order in SAP R/3 to determine the employee in the user department responsible for releasing the invoice, and then had to send the invoice to the branch office via in-house mail, keeping a copy for review. The released or rejected invoices were then sent back to the Shared Services Center again by in-house mail. “The processing of incomplete invoices involved a lot of paper, both to obtain releases and to process exceptions. In the event of queries, we even had to send the original invoice back to the vendor in many cases,” says David Staunton, Procurement Process Manager at BOI.
The problem with this procedure was not just the time required, but also the difficulties involved in controlling the process, because the individual processing steps were very hard to keep track of. Before an invoice was posted in the ERP solution, it was not possible to tell where in the bank it was currently being processed. At the same time, there was the constant danger that documents could get lost on their way to being released or copies of invoices could enter the process. Because of this lack of transparency, it was difficult to fulfill the legal obligation of providing documented proof. In addition, Accounting employees were often unable to provide an immediate response to queries from vendors regarding the status of their invoices. The consequences of this were high personnel processing costs, vendor complaints, and lost cash discounts.
Productive in eight weeks
Bank Of Ireland Group wanted to eliminate these disadvantages and at the same time increase its productivity. It was therefore looking for a solution for electronic invoice processing that automated all processes and made them easier to check. As the bank handles its business processes with SAP R/3, it chose a solution from the SAP partners Ebydos and Readsoft that consists of the text recognition software Documents for Invoices from Readsoft, the add-on product Ebydos Invoice Cockpit, and the associated Ebydos WebCycle. The implementation of Documents for Invoices was carried out by the local partner SoftCo, while Ebydos was responsible for implementing the Ebydos solution and integrating it in SAP R/3 and the e-procurement component Enterprise Buyer Professional from SAP.
At the start of May 2005, just two months after the start of implementation, Document for Invoices from Readsoft and Ebydos Invoice Cockpit were in productive operation. Ebydos WebCycle went live one month later. The solution covers all the Bank Of Ireland’s process steps, from data entry through to invoice release. The text recognition software scans all incoming invoices – which eliminates manual input and the risk of errors associated with this. The software then forwards the data to the SAP add-on Ebydos Invoice Cockpit, where it is compared with the master data from SAP R/3 and the purchase order information in Enterprise Buyer Professional and then sent to the user departments for release.
To process incomplete invoices, the employee receives an email containing a link to Ebydos WebCycle, which is implemented on the bank’s intranet. In the case of exceptions, for example if the invoice data does not agree with the master data in SAP R/3 or the person responsible for release cannot be determined, the solution informs the accounting clerk of the problem, so exceptions can be dealt with more quickly.
Payment freeze up until release
Invoice release is controlled by Ebydos WebCycle. It only allows a few specially authorized people to release the invoices, so mistakes are out of the question. Once release has been given, the invoice is paid immediately, and if the person responsible does not give the go-ahead, the payment is frozen.
The person responsible calls up the invoices via the workflow, can view all the information there and easily see which process steps have already been completed. It is also possible to request additional information or add comments. If the person responsible believes everything is correct, he or she releases the invoice, if not he or she rejects payment, giving a reason for this. In this case, an email notification can also be sent to the vendor, and a digital image of the invoice can be attached as explanation. In this way, the bank can easily inform its business partners of why an invoice hasn’t been paid; for example because it was misdirected and the bank did not receive the delivery .
Everything under control
All processed invoices are archived with all notes and processing steps. In the case of queries, documents can be located quickly, and Bank Of Ireland Group can thus easily fulfill its obligation to provide documented proof. Thanks to increased transparency, better process control is also possible. The employees in the Shared Services Center call up all the invoices for processing in Ebydos WebCycle, can identify any delays in good time, and intervene where necessary. Errors, such as incorrect sales tax or a missing order number, for example, are seen immediately and can be rectified. Selection functions enable the number of invoices to be restricted – for example to those that are overdue. If the person responsible for releasing invoices is on vacation, the employees in the Shared Services Center forward the invoices to a deputy.
Bank Of Ireland Group is extremely pleased with the solution. “The biggest advantage is that the end-to-end invoice handling process is much easier to track,” explains David Staunton. “Our employees can list all received invoices and prioritize them by payment due date. All invoices are entered in the system and all processing steps can be seen at all times. This helps us to meet our compliance obligations and minimize the operating risks.” The productivity of invoice processing has also increased. By streamlining the process so much, invoice processing efficiency has increased by over 20 percent since the introduction of the new solution.