Case study: APN

“eCom’s efficient electronic expense process will provide better cash flow management and many other improvements,” says Mark Smith, General Manager, Financial Shared Services, APN.

• Improved cash flow control
• Streamlined electronic expense process
• Improved cash position
• Greater visibility
• Strong return on investment
• Easy ability to increase operational scale

Mark, where were the biggest gains?
The biggest gains were not in the reduction of staff or the easy access to information; the real gains were in the management of our expense process and improved knowledge of our AP position. We now avoid costly payment penalties and gain the benefit of payment discounts.

What about the process itself?
We can now see the business process through a dashboard showing process performance and graphs. This displays information such as how long an approver has had an invoice, how many they are working on and how many are complete. It also shows exceptions such as supplier errors and the custom reporting is invaluable.

Tell me about APN.
APN, owner of the NZ Herald, is the largest operator of regional newspapers, radio broadcasting and outdoor advertising in Australasia. APN publishes 24 daily and more than 90 non-daily newspapers across Australia and New Zealand. NZ Financial Shared Services manages the accounting practices of all NZ businesses.

And where does eCom fit into the picture?
eCom’s expertise and technology has provided an electronic workflow and document retrieval system. The main features of this are the management of our accounts payable process and our advertising booking information, which is supporting documentation for our adverts.

What impact have eCom had on your throughput?
As an organisation we process around 130,000 AP invoices per annum, or 10 to 12,000 invoices per month. A team of 2 to 3 people manages this. We could now easily add another 10,000 invoices a month without the need to increase resources.

How did your expense process work?
Invoices went directly to individuals, departments or business units where they were coded and authorised and then sent through to AP and data entry for payment. Now invoices come centrally and are converted into digital.

And how does the new process work?
Approvers will log in to see invoices they have to approve and GL code for their business unit. They will receive an email to advise them when, and how many, they have to sign off. There will be two approvers for each business unit e.g. the Christchurch Star. Each invoice only needs to be approved by two approvers. A third approver is available for such things as invoices over a certain value, invoices sitting in queues too long or if an approver is away.

How do the right approvers see the right invoices?
Invoices from new suppliers or for new employees, are added to the workflow database by AP staff so the right approvers for the business unit see them. Once the invoice is approved and fully coded it is transferred into the finance system.

So what about the same invoices that come in each month and other features?
We use a self-learning mode by the Acorde system that will reference the last invoice from each supplier for each unique customer number. Let’s say it’s a Vodafone invoice; Acorde will identify the mobile number, know who owns that and mark it for the relevant approvers queue. If the invoice is for multiple business units such as marketing then it will go to several approvers who will have the chance to code their respective amounts.

Tell us about cash flow.
Our cash flow forecasting is critical in a business of our size. Now we can manage it effectively. Millions of dollars have to be forecast daily. That is where the real value will be added to the business.

How bad was it before?
We have tolerances of half a million and on any day we try to be within half a million of our target. We now know far more accurately, what the forecast payments are going to be on any given day. We currently know what our regular expenses are such as our wages bill but it is the one off invoices that flow in from the business units that cause the problems. Often we have not been told about these and some of these can be $100,000’s of dollars. Next the supplier requests urgent payment. Then we have to go and get short-term borrowing or draw down from overdraft. We would go beyond the cash flow position that we forecast to our parent in Australia. We generate a lot of cash, and that cash is sent to Australia on a regular basis, to service debt. If we under-forecast what we need for our company expenses then call back money, or take short term borrowing to cover it, then that’s a cost to our business and an interest cost that we have to bear.

What other benefits have you experienced?
Other real benefits are apparent in the business units around the country. They don’t need to open the mail anymore and decide whom the various invoices belong to. They don’t need to physically move it through the organisation or send daily couriers to financial shared services for processing these invoices. And the big thing that is hard to put a value on is the reduction in lost invoices that we end up having to go back to the supplier and get copies of - or they end up ringing us chasing payment. All this gets eliminated under the new solution.

So now you can concentrate on the important stuff?
Exactly. It’s not about giving away control but getting a better focus.

Do you see any benefits in customer service?
Yes. It allows us to interface with the customer a lot faster, process queries more quickly and sort payment faster – which again helps our cash flow!

What are your thoughts about eCom’s technology?
One of the things that I have been keen to do is move to a platform that is going to be supported in the future. Some of our archive platforms that have been custom written and the source code have not given to us, so we are exposed to issues in the future if we ever want to access that data. I need a system that I know is sound with a long term alliance partner, which is another reason for choosing Stellent and eCom.