Capita Group plc, a FTSE top-50 company, knew its existing purchase-to-pay (P2P) processes were labor-intensive and required significant manual keying and re-keying of in-bound paper invoices into SAP. The process was slow and error-prone, with inefficient approval cycles and excessive queries.
London-based Capita Group plc is the United Kingdom’s largest business process outsourcing (BPO) and professional services company. The company was founded in 1984.
Workflow & Process Management
68,000 in the UK, Europe, South Africa and India
“It was a major task dealing with inbound invoice management and approvals,” says Richard Good, SAP Programme Manager, “and as a result we had gained a reputation for late payments. The cost per invoice processed was also high, at around £8, well above the industry standard."
Richard Good SAP Programme Manager Capita Group
It was a major task dealing with inbound invoice management and approvals.
To ensure operational excellence and added value to clients—as well as to maintain mutually beneficial relationships with suppliers—Capita sought to lead by example and moved to improve its own business process.
To achieve this, the company planned to establish a UK Shared Services Centre, send its AP processing to India, implement a new SAP ERP (Enterprise Resource Planning) system and automate its existing manual purchase-to-pay (P2P) processes.
Capita’s Total Document Solutions (TDS) division was tasked with creating and running the new Shared Services Centre. TDS created a consolidated single delivery address, with different PO box numbers for each of Capita Group’s legal entities. All inbound invoices where then received and scanned by the Capita TDS team. Capita also demanded TDS implement OCR (Optical Character Recognition) technology for centralized, high-volume invoice scanning that would integrate with SAP.
As a result, Capita would achieve automated in-bound paper invoice processing, reduce its operational costs and more easily store scanned documents in a single place.
TDS turned to ReadSoft from Lexmark. The advanced OCR capability of ReadSoft Invoices software automatically extracts, classifies, sorts and distributes data from incoming documents—including handwritten documents. With invoice data captured, ReadSoft Software detects and verifies supplier and buyer identities, the type (general expense or purchase order, as well as whether it is an invoice or a credit note. Correct business rules are automatically applied. Extended line-item tables and multiple VAT rates may be extracted, with all information checked, using either calculations or by comparison with resident data, such as ERP ledgers.
If everything is correct and the invoice corresponds to an approved purchase order, it can bypass manual verification and be posted automatically. Any invoices not passed through automatically are escalated to Capita’s back-office AP processing facility in India, where staff check and verify any queries before passing the invoice back into the approval cycle. Any non-compliant invoices are rejected and sent back to the vendor.
Steve Long Project Team Lead Capita Group
Users are able to log in to a customized web portal to check and approve invoices.
Verified invoices are routed for approval via electronic workflow using ReadSoft Web Cycle, which provides Capita with an electronic workflow for processing invoices in SAP. Operators can have a personalized inbox containing only the invoices they are authorized to handle. Web Cycle uses the existing SAP system, so Capita staff can easily handle exceptions, coding and invoice approval. Any correction is automatically revalidated according to predefined rules.
Operators have full transparency into the invoice process, even when they are out of the office.
“Users are able to log in to a customized Web portal to check and approve invoices, and do not need access to SAP,” says Steve Long, Project Team Lead. “They can log in from wherever they are. It’s simple to use, and we save on SAP user licenses and training.”
now means invoices received by mail in the morning are scanned and are available same day on the system.
“Payment on-time has increased, significantly enhancing our reputation,” Good says, “and we have far fewer query escalations.”
Despite the rising number of invoices received and processed—around 400,000 per year—Capita is seeing significant benefits from its new automated Shared Services Centre operation.
“We’ve cut the cost of per invoice processing to just over £2, and reduced our back office resources from 40 in the UK to 20 in India, saving in excess of £1 million per annum,” Good says. “We achieved ROI on scanning in the first year of operation.”
Deploying ReadSoft Web Cycle has also helped meet the demands Capita established to implement a new SAP ERP system. With all data within SAP, Capita now has a much faster, accurate and reliable way to get its invoices through the purchase-to-pay process with approved invoices paid via SAP. Further reductions in invoice processing costs are anticipated from initiatives such as purchase order and invoice matching in SAP, and integration with SWIFT, the online banking payments community.
Using ReadSoft solutions, Capita cut the cost of processing a single invoice to just over £2 from £8 per invoice—a 70% cost reduction. Overall, Capita is saving £1 million pounds per year.
Richard Good SAP Programme Manager Capita Group
We achieved ROI on scanning in the first year of operation, and have been able to implement better controls and im¬proved visibility of our invoicing processes.