An Army of reasons for Salvo's AP overhaul

from IDM Magazine May-June 2009

The Salvation Army Eastern Territory is now getting great efficiencies from an Accounts Payable automation platform established to centralise the processing of over 17,000 invoices a month.

The range and diversity of the activities of The Salvation Army in Australia is enormous, from the ministry of the church to its helping hand for Australians in crisis or out of luck.

When our thoughts turn to the Salvos, we generally think of a clean white shirt with twin epaulettes and a smiling face ready to lend a hand. But behind the familiar friendly visage lies a major organisation with the typical business challenges in managing programs, people, logistics and finance.

It has Aged Care facilities that house our elderly, and The Salvation Army uses its wide network of stores to fund its many services. An organisation that relies on bequests, donations and gifts from the public must ensure the efficiency of its internal financial process to ensure every dollar that comes in the door is well spent.

Over the past 10 years, The Salvation Army Eastern Territory has evolved a state-of-the-art accounts payable department that handles the centralised processing of invoices and documents submitted to 400 separate sites across Australia.

Before the Shared Services Group was implemented, each site had its own bank account and cheque book, with local Officers responsible for managing their own affairs.

That situation was historic. While those officers are trained and gifted in achieving their respective missions, they were not primarily financial specialists. On top of this, the expectations of modern reporting and rules, demand continuing change.

Norris Dudgeon, Shared Services Group Manager for The Salvation Army, said, "It was a major change management process."

Providing even greater efficiencies, an automated accounts payable solution has been supplied by specialist AP automation company Xcellerate IT.

Over a two year period The Salvation Army Eastern Territory implemented a solution employing dual Kodak i280 scanners with Kofax Capture software. This is used to capture, OCR and approve invoices for processing in TechnologyOne Financials.

Each Salvation Army location submits invoices along with a printed PDF cover sheet that is generated in Adobe Acrobat.

These are batch scanned by the Kodak scanner and the Kofax software automatically searches for Tax Invoice Number and ABN Number. After passing through review this data is then imported automatically into Finance One for payment to be processed.

Norris estimates the system is saving The Salvation Army in the vicinity of $A250,000 per year and the number of Accounts Payable staff has reduced from 17 to 11.

"Our Business Case was formulated on the premise that we would be cost negative in Year 1, cost neutral in Year 2 and cost positive in Year 3 and beyond," said Dudgeon.

"The reality was that we were cost positive at the end of Year 1. We continue to remain cost positive."Regardless of their geographical location, any of our 400 sites can instantly view their Tax Invoice/s Image via our Finance System (TechnologyOne Financials). This is a significant improvement on the previous system where SSG would be required to locate/photocopy/mail any document which was required by the site (eg: warranty on faulty goods or audit purposes).

"A byproduct (but an important one) is that less time is spent on administration functions by staff, which enables them to concentrate on their core objectives."

"We selected Xcellerate IT because this product is their core business rather than an add-on to their main business.

"From the Managing Director down, Xcellerate consistently demonstrated a genuine interest in our business and wanted to have a complete understanding of our business in order they could deliver an end product which would meet our requirements."

Visiting a number of reference sites to evaluate their approach to AP automation, Dudgeon was struck by the inefficiency of operators having to switch between a screen displaying the images of scanned invoices and the financial application. So he recommended that The Salvation Army acquire 22" widescreen monitors that would display both in splitscreen.

Implementing the solution across such a unique organisation as The Salvation Army required a hands-on approach to training staff at the 400 sites by Xcellerate IT.

"We also needed to have senior SSG staff available to then travel to majority of sites and educate/demonstrate the software to those personnel," he said.

"Our experience, both in terms of increased efficiencies, which resulted in significant cost savings for our organisation and the ability for non-metropolitan sites to have immediate access to their documentation, clearly confirms our decision to purchase the Xcellerate IT Imaging solution."

Norris estimates that the savings represented by not having to store the physical invoices in a central location alone represent approximately $A70,000 a year.

The Shared Services Group is now able to process the hundreds of invoices within three days of receipt, ensuring The Salvation Army is able to keep the wheels in motion as it continues on its mission to help Australians in need.

"We are now preparing the business case for implementing a centralised purchase order system which will remove the need for a cover sheet for every invoice and add further streamlining," he said.

Howard Boretsky, Managing Director of Xcellerate IT, said, "Technology is changing the way AP departments function today, and like The Salvation Army, many Australian organisations are looking to solutions to enable them to operate more efficiently and provide greater visibility and control of the AP process."