Case study - 3
JILFORA CONSULTING
Digitizing Accounts Payable for a Resilient Manufacturing Operation
Client Overview
A mid-sized manufacturing company specializing in the production of industrial components for the automotive and aerospace sectors.
Background
As a key player in a demanding supply chain, our client's operational efficiency is paramount. Their business is subject to fluctuating demand, leading to unpredictable spikes in procurement and, consequently, invoice volume. Their wholly manual Accounts Payable (AP) processes were rigid and labor-intensive, creating significant bottlenecks that hindered their ability to scale and respond to market dynamics effectively.
Implementation Approach
A strategic, technology-oriented approach was adopted to modernize the client's AP function and build a foundation for future growth:
- Workflow Assessment & Vendor Analysis
- Financial Technology Rollout
- Vendor Onboarding & Communication
- System Integration & Training
Challenges
The client's reliance on a traditional, paper-based AP workflow presented three core challenges:
- Entirely Manual Invoice Processing: The AP team received invoices via post and email, which were then printed and manually logged into their ERP system. This process was incredibly time-consuming, tedious, and provided no visibility to stakeholders until after the data was entered.
- Poor Load-Bearing Capacity: The manual process could barely keep up with regular invoice volume, let alone seasonal spikes. This resulted in massive backlog, delayed payments, and required staff to work extensive overtime, leading to burnout.
- Error-Prone Process: Manual data entry is inherently susceptible to human error. Keying mistakes led to incorrect payment amounts, unintended expenses, and significant time spent on reconciliation and correcting errors, further straining the already burdened team.
Solution
The solution directly targeted the core challenges by introducing key technologies to automate and streamline the invoice ingestion process:
- Optical Character Recognition (OCR) Implementation: An intelligent OCR solution was deployed to automatically scan and "read" incoming invoices from emails and scanned documents. The software accurately extracts key information such as invoice number, date, amount, line items, and PO number, and posts it directly into the accounting system, eliminating over 95% of manual data entry.
- Vendor Portal with Self-Service Uploads: A secure, web-based vendor portal was launched. This empowered suppliers to directly upload their invoices in a digital format (e.g., PDF) and track their status in real-time from receipt to approval to scheduled payment. This reduced the volume of invoices arriving via email and post and cut down on "where is my payment?" inquiry calls.
Client Testimonials
"The seasonal spikes used to be a nightmare for our finance team. We were drowning in paper and constantly behind. The introduction of OCR and the vendor portal has completely changed the game. Our team can now handle a doubling of invoice volume without breaking a sweat. The process is faster, far more accurate, and our suppliers appreciate the transparency. It's allowed us to become a more agile and reliable partner."
RESULTS & IMPACT
Operational Results
- Increased the capacity to process invoices by 200% without adding staff
- Reduced manual data entry by 95%, improving accuracy through automation
- Decreased the average time to process invoices from 15 days to 5 days
- Reduced vendor inquiry calls and emails by 70% due to the self-service portal
Strategic Impact
- The company can now seamlessly handle spikes in production and procurement without creating financial bottlenecks
- Staff are freed from manual data entry to focus on value-added activities like vendor analysis and cash flow optimization
- More accurate payments and the transparency of the vendor portal strengthened relationships with critical suppliers
- The automated system provides a scalable foundation that can support the company's long-term growth objectives