As one of the UK’s largest insurance intermediaries, Endsleigh’s accounts department was dealing with over 17,000 bits of paper every year. Bearing in mind these were handled in a centralised office and then shipped out to a nationalised branch network, there was an obvious business case for automated invoicing, according to Endsleigh’s financial accounting manager Mal Westfield.
Endsleigh took the plunge three years ago. The company had recently installed Microsoft Great Plains (now known as Microsoft Dynamics GP) as its accounting system and wanted a paperless processing mechanism that would link in without any difficulty.
"In the past, we have had a lot of systems that didn’t really relate and you end up having to maintain interfaces," says Westfield.
That criterion narrowed the field considerably and Endsleigh ended up plumping for Version One’s DbArchive, well known for its compatibility with Great Plains. After a cautious letter to HMRC asking if the department was happy to consider scanned invoices as official records, and a positive reply, Westfield's team began the implementation.
Version One sent its own team down to work with Endsleigh’s reseller, Sytation, which installed the Dynamics GP general ledger system. Endsleigh also purchased a browser system from Sytation’s sister company, Software Index, that allowed managers to approve the scanned invoices generated by DbArchive online.
"It was probably a bit of bespoke software they’d built for somebody else and rolled out as an add-on," says Westfield, "but we turned down all the other extras. My aim was to have it as vanilla as possible, because the more tweaks you have the more things are likely to go wrong."
Endsleigh’s original reseller Sytation, has been taken over twice since the arrival of DbArchive, but happily the same people have remained in post, so Westfield still has the same contacts. The service levels provided through his annual maintenance contract have remained consistent from the start.
In the new system, purchase invoices are sent straight to accounts payable, who enter the basic details onto the database. A bar code is generated and attached to the invoice prior to scanning. As well as being more reliable than a user-generated sequence number, the barcode allows extra information to be called up from Dynamics GP or from the company’s intranet. Once the image capture has been verified, the original document is shredded and a link to the electronic version is sent, via e-mail, to the approver.
The approver opens the link in their web browser, where historical information regarding the supplier (and any other outstanding invoices) is visible at a glance, as is the invoice itself. When the invoice is approved, the status of the outstanding debt is changed automatically in the accounts ledgers.
"The accounts payable end is much quicker because you don’t have to rely on post, paper copies aren’t going missing and there’s permanent record.
"People don’t have to keep a physical pile of invoices," says Westfield. A summary screen of all outstanding invoices shows who is due to be paid for what, and the finance team can add comments and archive information they feel is relevant.
The payment cycle is shorter by about five days, he calculates. The new process has also cut document archiving costs significantly by doing away with the need for a leased storage facility in central Cheltenham.
On top of this, the staff needed to process purchase invoices has been reduced from three to 2.5. Westfield says the cost for all this was "relatively low" and that implementation lasted just a couple of weeks.
"The benefits were so obvious we haven’t really measured them. If we took the archiving lease into account, it would pay for the software easily," he says.
The first months did throw up a few teething problems. "We have special printers for the barcode labels called Zebra printers and some of them lost their settings," he says.
Other issues that cropped up were images not scanning properly, not pulling through the right data and not populating the database. But most of these issues were traced back to user error.
"We came close to sending invoices out manually a couple of times because the backlog was building up but it always got fixed in time," says Westfield. "We never thought, 'What the hell have we done?' We could see the payback and we knew it would work."
Version One added some value to the DbArchive software through a free seminar series, which gave Westfield the opportunity to network with other users about their benefits and difficulties, as well as share a few optimisation techniques.
The next step for Endsleigh may well be optical character recognition, where the scanning process would capture the data for 70-80% of the invoices automatically. Some manual entry would still be involved, but input times and costs could be much reduced. Westfield says he’ll be looking into it.
Perhaps the real mystery is why other firms faced with the same issues haven’t gone paperless themselves. "I think it’s because it’s not a sexy thing to do," explains Westfield. "People look at headline stuff like sales systems and accounting packages, and this isn’t really a core system, so it’s not really high profile.
"But with the pressure stemming from green reporting, as required under the Companies Act, I think a lot more people are going to go down this road."