Imagine a manufacturer of building products like bricks and blocks, managing invoices from over 2,500 suppliers. Some of these suppliers would typically do a single shipment and send a single invoice for each purchase order; some would do multiple shipments with a single invoice; and others would do multiple shipments and multiple invoices against the same purchase order. In the back office of the manufacturer, a team of two or three associates will have to make three-way voucher matches against each line of an invoice so that payment to suppliers can be made. Over a year, the team will make approximately 50,000 manual matches. Does this sound like the nightmare your company also faces? We won’t be surprised to hear a resounding yes!
Scores of organizations go through the pain of voucher matches. Our customer, who happens to be a manufacturer of building products, set out to create a solution that would automate the process and, in addition, eliminate the errors induced by the manual process.
We implemented the JDE Enterprise One E1 9.2 Voucher Match Automation (VMA) process for the customer. The VMA enabled invoices to be matched automatically to purchase order receipts, and for vouchers to be created for each line on a supplier’s invoice.
We began by first identifying suppliers who had a major number of invoices in terms of value and records. Invoice formats used by them were mapped and automation rules defined. We then added value by turning the incoming invoices into .pdf files and designing an interface between the files and JDE Z tables. The VMA process is then run for:
- Voucher logging
- Performing a 3-way voucher match to redistribute a created logged voucher
- Specifying whether to apply tolerance on receipts with an amount greater than the invoice amount
- Performing a 3-way voucher match to create a new voucher
- Suggesting matches for invoice and receipt lines so the user can review them before approving and performing the match
- Creating logged vouchers so customers can book their liability earlier, and pay their suppliers before the receipt of goods
- A single batch job run on a scheduler to process all captured invoices
Manual processing is needed only for invoices that cannot be matched automatically. Currently, we are able to create 90% successful matches. The reason for the 10% gap is that suppliers send invoices in new and unfamiliar formats. Over time, the system will be trained to match these invoices as well.
Our customer is increasing the number of suppliers whose invoices are processed using VMA. By the end of the year, the customer will have 60% of suppliers managed automatically, enabling dramatic productivity improvements. In addition, the customer will have shortened the invoice cycle time, resulting in suppliers being paid sooner. This will allow the manufacturer to negotiate better payment terms.
In the instance of this implementation, the manufacturer will reduce human effort and bring down the errors while making a £0.5M savings in IT costs. Best of all, though, as the manufacturer’s business grows, there will be no need for additional manpower — the manufacturer is already ready for the future.