Veterinary Health Organization Streamlines Its Invoice Processing with AP Automation
Case Study at a Glance
Challenges
- Too much time wasted on tedious, manual tasks
- Unmanageable invoice volume
- Inefficient invoice approval process
- Late payments and unhappy suppliers
Solution
- Automated invoice data capture
- Invoice approval routing
- Touch-free uploading to ERP
Impact
- Reduced manual tasks and errors
- Decreased AP staff overtime by 43%
- Reduced invoice approval time by over 50%
- Improved supplier satisfaction
Executive Summary
A veterinary health organization that provides advanced medical care for pets through 24-hour emergency and specialty hospitals as well as urgent care clinics was struggling with an outdated accounts payable (AP) process. The growing organization was manually processing, approving, and posting supplier invoices. This approach was overwhelming its back-office staff and frustrating its valued suppliers.
So, it automated its invoice processing with a solution that digitizes and simplifies invoice handling.
The Challenges
Manually processing invoices used to be a tremendous burden for the veterinary health organization.
Despite working more than 70 hours per week, the organization’s team of five AP professionals couldn’t keep up with the 6,000 to 7,000 invoices it receives each month. The AP staff was wasting lots of time keying data, forwarding emails, chasing down approvals, and fixing errors and mistakes.
The number of hospitals that the veterinary health organization operates and its high staff turnover also made it difficult to ensure general ledger information was coded correctly.
Additionally, the team could never be sure that they received all the company’s outstanding invoices. Suppliers often sent invoices to one of the veterinary health organization’s hospitals or to its corporate office. Invoices that were not forwarded to its AP team in a timely manner were at risk of being paid late. In a few cases, utility providers threatened to discontinue service to one of the organization’s pet hospitals because of late payments.
And, on top of this, it was not uncommon for emails requesting approval of an invoice to go unread or go missing.
In 2018, the veterinary health organization decided that it needed to find a more efficient way to process supplier invoices.
After an evaluation of available AP automation solutions, the organization selected the one with a technology provider who said they could process all its supplier invoices from a single email box.
Unfortunately, a beta test of the system quickly revealed that the veterinary health organization’s AP staff would have to manually review each invoice in the queue to determine who was responsible for processing it. Like most AP departments, to ensure accountability, each member of the team is responsible for processing certain types of suppliers (e.g., utilities, landlords, etc.), suppliers whose names starts with certain letters (e.g., A-G), or suppliers whose identification numbers start with certain numbers. That’s a lot to consider when divvying up the invoices manually.
With this realization, the veterinary health organization was back to square one. That’s when it discovered MetaSource.
The Solution
MetaSource provided a solution that combines automated invoice data capture, invoice approval routing, and touch-free uploads of approved invoices to the veterinary health organization’s NetSuite ERP application. As part of the solution, MetaSource also automatically puts each supplier’s invoice into a particular queue based on the organization’s business rules.
The organization plans to migrate to an Oracle ERP in the future. When that migration is complete, the MetaSource invoice processing automation solution will upload approved invoices directly into Oracle.
After a six-month delay because of the pandemic, the veterinary health organization went live with the MetaSource accounts payable automation solution in October 2020.
The Benefits
Automating its invoice processing with MetaSource has provided the veterinary health organization with significant benefits:
Improved Staff Productivity
Automating invoice routing and other manual, repetitive tasks enabled the organization to dramatically reduce AP staff overtime. Except for a little overtime to close the financial books at month’s end, the organization’s AP team members now work 40 hours per week (a reduction of 30 hours per week!). Staff productivity with the MetaSource AP solution is so high that the organization didn’t need to hire a new employee after one of its AP staff members left.
Better Accuracy
The veterinary health organization experiences fewer coding errors since deploying the AP solution. MetaSource automatically codes the general ledger information for the organization’s 154 largest suppliers. The organization can easily edit or delete rules on how general ledger information should be coded, such as when a location, department, or approver changes. And MetaSource has made miskeyed invoice data a thing of the past. It’s been at least seven months since the MetaSource AP solution incorrectly captured information from a supplier invoice.
Faster Invoice Approvals
The veterinary health organization reduced the amount of time it takes to approve an invoice for payment by more than 50% since deploying the MetaSource AP solution. In the past, it took up to 10 days to get approval to pay an invoice. Today, it takes up to five days, with most invoices approved within the same day.
Purchasers are instantly notified when invoices are ready for approval. They can review all pending invoices in a single location without having to search their email boxes and even receive daily invoice approval reminders. And invoices are automatically escalated to a manager for review if no action is taken by a purchaser within a preset amount of time.
Faster invoice approvals have significantly reduced the number of telephone calls and emails the organization receives from its suppliers inquiring about the status of invoices and payments.
Fewer Duplicate Invoices
It’s not uncommon for a supplier to submit an invoice for payment to the purchaser in a hospital as well as to the AP department. In the past, this made duplicate invoices a big problem for the veterinary health organizations.
If the purchaser forwarded the supplier’s invoice to the organization’s AP department, there was a chance it would be paid twice, resulting in lost funds and wasted effort trying to resolve the error in the financial system. Inconsistencies in the way the organization attached invoice numbers to construction invoices also resulted in duplicates.
Now, the organization has an AP solution that automatically detects duplicate invoices. In the first half of 2023, the MetaSource solution stopped 1,156 duplicate invoices for the organization, representing $2.9 million.
Streamlined Auditing
Fulfilling auditor requests for copies of processed supplier invoices was also a problem area for the veterinary health organization. The AP team used to search through bankers boxes to retrieve paper invoices, photocopy them, and send them to the auditor.
The MetaSource solution can instantly retrieve images of archived invoices for transmission to auditors. It also enables the veterinary health organization to provide auditors with “view-only” access to their system, so they can research and retrieve invoices themselves – no on-site visit required.
It’s no wonder the veterinary health organization’s AP team members cannot imagine doing their jobs without MetaSource.
About MetaSource
MetaSource delivers intelligent document management, workflow automation, and business process management solutions to help organizations streamline processes, ensure compliance, and improve efficiency. With over 30 years of experience, MetaSource successfully meets enterprise needs with secure, reliable software and managed services.
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