Case study - 1

JILFORA CONSULTING

Transforming Accounts Payable for a Mid-Sized Pharmaceutical Manufacturer

Client Overview

A mid-sized pharmaceutical manufacturing company specializing in the development and production of generic and over-the-counter drugs.

Background

As a company committed to quality and compliance within the highly regulated pharmaceutical industry, our client was facing significant internal hurdles that impacted their financial operations. Their accounts payable department, a critical function for maintaining supplier relationships and ensuring supply chain continuity, was struggling with inefficiencies that led to delays and a lack of visibility. This created financial risks and strained relationships with key vendors.

Challenges

The client's accounts payable process was plagued by several critical issues:

Internal Processing Delays: The end-to-end lifecycle of invoice processing was excessively low, leading to missed early payment discounts and, in some cases, late payment fees.
Non-Standardised Processes: Each invoice seemed to follow a different path. The last process is procedure for receiving, verifying, and approving invoices resulted in confusion, errors, and significant error bars.
Lack of a Routing Workflow: Invoices were often routed manually and would get stuck in individual email inboxes for days or weeks. There was no systematic way to ensure that invoices were seen to the correct approver in a timely manner.
No Formal Follow-up Mechanism: The AP team spent a considerable amount of time manually tracking down the status of invoices and following up with approvers, extracting from more value-added activities.
Limited Automation: The process was heavily reliant on manual data entry from paper and pro invoices, which was not only trend-consuming but also prone to human error, leading to incorrect payments and reconciliation issues.

Solution

The implemented solution was a holistic transformation of the client's account payable function, built on five core pillars:

Standardised Process: A single, documented procedure for handling all vendor invoices was established, from receipt to final payment and archiving.
End-to-end Ownership & Accountability: Clear ownership was assigned for each step of the process. The new system extended visibility into who had which invoice and for how long, fostering a culture of accountability.
Automation: An AP-powered invoice processing software was implemented to automate data extraction from invoices, reducing manual entry by over 80%. The system continued to operate in 3-way matching process between purchase orders, good receipts, and invoices.
Process Workflow: A dynamic and automated workflow was created to route invoices to the designated approvers based on pre-defined business rules (e.g., department, amount, supplier). The system also sent out automatic instructions for pending approvals.
Transparent Reporting & Monitoring: A suite of real-time dashboard and reports was developed to provide unprecedented visibility into the entire AP process. Management could now track key metrics such as invoice cycle time, number of invoices pending approval, and on-time payment performance.

Client Testimonials

"The transformation of our accounts payable process has been remarkable. We've moved from a chaotic, paper-based system to a rationalisation, automation workflow. Our tech is no longer logged from in manual data entry and chasing approvals. We have full visibility into our liabilities, our relationship with suppliers has improved, and we can finally focus on strategic financial management. This solution has been a game-changer for our finance department."

— CEO, Pharma Manufacturing Client

RESULTS & IMPACT

Operational Efficiency

Invoice Processing Time: Reduced the average invoice processing lifecycle from 28 days to 8 days
Manual Effort: Reduced manual data entry and processing efforts by 50%

Financial Impact

On-time Payments: Increased on-time payment rate from 29% to 98%, improving supplier relationships
Error Reduction: Achieved a 99.5% accuracy rate in invoice data capture, virtually eliminating payment errors

Strategic Benefits

Improved Supplier Relations: Timely and accurate payments strengthened relationships with critical suppliers
Enhanced Financial Control: Real-time visibility into liabilities and cash flow
Strengthened Compliance: Fully documented and auditable digital approach