A company can have the best product in the world and not be successful. The administrative and financial department is part of any company’s structure and despite not being one of its core areas, it is essential for its sustainability, control, efficiency, and effectiveness. It is an essential part to guarantee smooth relations with suppliers and customers, as well as to ensure an adequate management of the company’s resources.
Now, imagine a challenge for this area of a company: receive and process more than ten thousand suppliers’ invoices per day, representing more than three million invoices a year. A nightmare, right? This was Sonae’s retail area reality, a multinational managing a diversified business portfolio in areas such as retail, financial services, technology, shopping centres and telecommunications.
At stake was a gigantic task of information and documents management and the group decided to pursue a strategy of implementing electronic invoicing and dematerializing all paper received from suppliers. The aim was finding a solution that would easily be implemented next to the business partners and that would allow improving the purchase processes, decreasing the loss of documents and the average time of receiving documents. They were looking for a solution that would also promote invoices record and automatic checking thus substantially increasing the processes smoothness, reducing mistakes as well as the processing time and allowing releasing resources to core activities.
Sonae’s decision was to choose Saphety’s solution.
Nuno Guerreiro, Head of Business Administrative Processes at Sonae explains that SaphetyDoc was not only regarded as the market’s best technological solution with certification and a 24/7 electronic archive but Saphety was also able to submit the proposal that better met Sonae needs and challenges.
Saphety offers a transparent platform allowing Sonae to interconnect with all its business partners, centralizing the electronic documents flow and archive and simultaneously meeting all legal and fiscal requirements.
“We found SaphetyDoc to be the most complete and innovating solution to dematerialize suppliers’ invoices on the market.”
This was the proposal that better suited not only the amount of documents received by Sonae (more than three million a year), but also the business complexity: more than one thousand stores in Portugal and Spain, about 22 thousand suppliers and more than 3.5 million purchase orders issued every year.
From challenge to reality
In view of the extent of the challenge, a phased implementation plan was set out including a careful selection of some of Sonae’s major customers in terms of document workflow. Together with these, a pilot project was started which proceeded in a smooth and efficient manner. Then, a strong roll out process was started with all Sonae remaining suppliers.
To minimize the impact of this change and facilitate the suppliers’ choice, Sonae and Saphety developed a set of internal and external disclosure activities, of which we highlight events with suppliers, workshops, newsletters and support documentation, activities whose main objective was showing electronic invoicing advantages for everyone. This solution is often focused only on the administrative and financial areas but investing in the process creates benefits for the company as a whole, allowing many teams to concentrate on their core activities.
One of the most important aspects was the development of an internal document management platform which dictated the standardization of all transaction documents received at Sonae, regardless of format (paper or electronic), guaranteeing the same data format to integrate in the target systems.
This is important because it allows forwarding to the different ERPs, the subsequent content analysis, creation of scenarios (using other analysis tools), as well as carrying out audits and statistics.
How does it work?
Receiving invoices with SaphetyDoc (Accounts Payable)
Suppliers can choose how they wish to send invoices, according to their preferences.
Saving millions in a three-stage process
It all started in the 1990s with the implementation of electronic messages with suppliers; although at the time they had no legal or fiscal validity. Later, Sonae implemented an OCR platform to dematerialize all paper received from suppliers, allowing data and image delivery to the different target ERP systems. Under the 2005 legal and fiscal framework given to electronic invoices, Sonae was one of the pioneers in Portugal with regard to boosting electronic invoices next to suppliers. These two activities allowed Sonae to dematerialize all documents received from suppliers, whether issued electronically whether dematerialized on arrival at the OCR platform. Thanks to these steps, guaranteeing the total dematerialization of suppliers’ documents and given that Sonae has an implementation rate of electronic invoices next to suppliers of 82% (98% in the goods flow), annual savings of about €18 million are expected.
But Sonae wanted more and moved on to the next level of its processes optimization: to automate the invoices checking process. This is a critical process involving administrative, financial, operational, logistical and commercial areas and also with a strong impact on suppliers. It is fundamental to maintain a smooth controlled process with little human intervention. Outputs quickly showed it was the right move: there was a substantial decrease of the invoices approval average time (to 1,2 days) and subsequent reduction of delays related to payments to suppliers.
And the true potential of electronic invoices is in using end-to-end processes and systems, i.e. with all entities dematerializing paper and choosing the electronic invoice which translated into the automation of invoices sending, reception and checking. Results obtained were more than just “a few” million euros savings. It was much more than that.
As Nuno Guerreiro mentions, the entire invoicing process is now more transparent and better yet, there is no human intervention. “The automated reception, validation, record and checking has become a more efficient process”, states the Head of Business Administrative Processes at Sonae.
But the will to improve is still present at Sonae. The strategy has been set out and now Sonae can increase its efficiency indicators even more. The challenge for 2017 is promoting 100% implementation of the electronic invoice next to suppliers. This scenario shall allow achieving levels of record and automatic approval of invoices (without human intervention) of 95%.
