Top 5 Advertising Agency

This top-five advertising agency and media buying firm saved $500,000 annually—and improving client and vendor satisfaction—with a new paperless accounts payable solution.

The Background

In a major ad agency and media buying firm, the process of accounts payable is very different from companies in other industries. Though many businesses are inundated with paper, fax and email invoices—all of which need to be entered, validated and reviewed before processing—advertising and media shared services have an added layer of client accountability with which to contend. Reporting back to clients is a non-stop, repetitive, error-prone process. Throw in the full slate of other day-to-day priorities and agencies have had no time to investigate alternative processes.

But it's a harsh reality that having "no time" is no longer a valid excuse for staying the course. New market pressures are mounting, including a proliferation of interactive/digital advertising, increased competition and lower media-buy markups. In addition, new regulations and more stringent audits require supporting documentation to be available with a click of the mouse, not buried in an offsite storage facility.

The result is a "change or die" atmosphere at many ad agencies and media buying firms. This case study shows how one firm—"The Agency"—successfully teamed with IPS to streamline its shared services accounts payable processes. The result? Cutting invoice processing time from two and a half months to less than a week. At the same time, the Agency's leadership team was able to embrace a new, agile business model—one that enables them to adapt services and respond quickly to ever-changing client demands and regulations.

The Challenge

EDI was long considered to become the ultimate solution but with the infrastructure cost of EDI and the ease of using Microsoft Office and Email Systems, the paper problem has now transformed into a document processing challenge. Before partnering with IPS, invoices entered the agency in paper, fax and via email attachments. Scanning paper invoices only addressed a fraction of the problem--invoices received by mail. OCR alone did not provide the necessary accuracy. Even electronic documents received as email attachments (Excel, Word, PDF) needed to be manually entered into the system because the usable data is “locked up” in these unstructured formats. Needless to say, this was a tremendously manual, error prone and tedious process—but one that was fundamental to the ad agency's daily operations.

From receipt to ready-for-payment, it took the Agency four to six weeks to process an invoice, thanks to a never-ending backlog and high rate of data-entry errors. The Agency operated in constant "catch-up" mode, never having enough resources or hours in the day to get ahead of the problem—let alone investigate new technology solutions.

The issues that the advertising agency faced included:

  • Unacceptably high rate of data entry errors (10 to 20% defect rate)
  • Long processing time, resulting in frustrated media buyers and vendors and late resolution of client billing
  • Frustration among the clients over billing issues
  • Missed opportunities to reallocate spending as a result of media credits due
  • Lack of documentation and poor access to existing documentation to support internal and external audits

The Agency's management knew that throwing more resources at a broken process was a recipe for failure. A survey of their customers confirmed the direness of the situation. The leaders realized they needed new thinking and outside expertise to provide them with a sustainable, effective solution.

The Solution

The Agency's head of shared services was fed up with the status quo when a representative from IPS reached out to her. IPS described a world where invoices were received and posted to the financial system the next day. Frustrated with the backlog and poor quality of the current process, she engaged IPS to implement the solution. Within six weeks of project start—the same time it once took simply for processing—invoices were flowing seamlessly into their accounting system within 24 hours of receipt. The Agency was able to digitize invoices for half the per-invoice cost of their previous manual system.

"I admit to being skeptical at first, but IPS literally made the problem of a paper intensive manual process go away overnight. Having a Six Sigma background ourselves, our expectations were high, but IPS delivered accuracy and results that met our very aggressive expectations," said the Agency's senior vice president and director of operations.

The days of pushing paper were at last over—in less than the time it used to take the agency to process a single invoice, and without installing any software or writing a single line of code.

As experts in Intelligent Capture, IPS knew which of their data and document capture systems would best serve the agency to maximize accuracy, while keeping costs low. It was established that OCR alone was not enough for the required levels of accuracy. IPS carefully put together the right blend of technology, human intelligence and business rules. The improved accuracy eliminated data discrepancies caused by manual entry errors thus improving total processing time.

To meet compliance and records management needs, all invoices were archived to the IPS Digital Repository, available for instant access at the click of a mouse. Next, to slash time at the front end of the process, all invoices were sent directly to the IPS Digital Mailroom. This eliminated the costs of traditional mailroom services at the agency, streamlined the process, and allowed agency staff to shift focus to more value-added, income-generating activities.

Finally, IPS implemented its Digital Workflow Process to allow continuous processing of invoices, eliminating the backlog and making new invoices available online the next day—again, with a simple click of the mouse. Invoices and related documents are automatically archived in the IPS Digital Repository for instant access and streamlined audits in the future.

The Benefits

  • Media buyers now access invoices and related documents via the web, viewing them instantly for discrepancy and post-buy analysis.
  • Clients now have secure web access to view details of any bill they receive.
  • Auditors can also access the system via the web, eliminating the need to retrieve and sort stacks of paper to prepare for internal and client audits.


The Results

Every step in the Agency's invoicing process is now digital and automated—from receipt to payment to archiving. Agency management has full transparency and ready online access to each part of the process. The IPS solution increased cash flow, sped invoice processing and response times, ensuring greater data accuracy and reduce overhead.

The benefits of media payables the advertising achieved included: 

  • Hard labor savings of approximately $500,000 per year
  • Increased data accuracy to from 80% to 99.997% (Six Sigma Quality), virtually eliminating defects
  • Improved invoice processing from an average of 45 days to one-two days
  • Dramatic reduction of consumption and reliance on paper
  • Improved working relationships with vendors thanks to more timely payment of invoices
  • Increased client satisfaction due to timely adjustment billing, allowing clients to reallocate funds appropriately.
  • Increased time to spend on revenue generating value-added activities
  • Enabled rollout of the IPS system to other departments, including agency and production payables


About IPS

Founded in 1991, IPS enables companies to transition from inefficient and costly legacy business processes to streamlined digital workflows. IPS Intelligent Capture allows knowledge workers to provide the maximum value to the business by digitizing unwieldy paper and extracting useful information from both structured and unstructured PDF, MS Word, Excel and other electronic documents. The IPS Digital Mailroom receives and opens mail, extracts data and uploads the information into your applications by the next morning. Find out how IPS, the digital document experts, can help you save time and money, starting tomorrow, by scheduling a demonstration or free consultation.