Paper-based processes challenge for fast growing Leggett & Platt
As an S&P 500 global manufacturer, Leggett & Platt, Incorporated produces a variety of products for homes, offices, automobiles, airplanes and retail stores. As business grew, paper-based processes made managing cash flow difficult. AP staff manually processed as many as they could every day, even though they were working with thousands of invoices, representing $3 billion in spend annually. That’s just scratching the surface. And processes in AR were just as challenging.
Once both departments implemented OnBase capture, everything changed. Now, the company electronically captures data from invoices, remittance images and check images, validates it and transfers it to PeopleSoft and the mainframe application. The combined return on investment for both departments was realized in less than a year: at least $1.6 million annually in AP labor costs alone.
“We’ve reduced our cost per invoice by 69 percent in five years, from $3.88 per invoice to $1.21,” said Nikki Head, senior assistant AP manager for Leggett & Platt. “We’ve also boosted our invoice processing volume by 232 percent with no additional staff required.”
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Four ways L&P saves $1.6 million a year with OnBase capture
What does OnBase capture do for Leggett & Platt? Here are four ways it’s boosting business:
- Boosts invoice processing volume: By implementing OnBase capture, Leggett & Platt processes about 230 percent more invoices without adding staff. “We thought outside the box for how we could tackle automating our AP processes,” Head said. “Now, we don’t have to think about these processes. We let the system do it for us – and we’re continually improving.”
- Maximizes early payment discounts: The solution automatically compares and ranks terms captured from invoices and associated POs, with the higher ranking term populating the data record. With the most favorable terms identified, staff prioritize invoice payments to maximize discounts.
- Posts invoice data quickly: Because OnBase capture seamlessly integrates with PeopleSoft, AP staff quickly post invoice data for buyers to see. “About 90 percent of our invoices are in our PeopleSoft system by the end of the day,” Head said. “Now they’re available the next day for our buyers.”
- Reduces office supply budgets: In AP, the department slashed its supplies budget by 73 percent by eliminating paper files, boxes and reams of paper. AR staff also reduced its usage of paper, printer ink and equipment maintenance.
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