Invoices are more than a liability for global advertising agencies. They account for all the outside services and expenses that go into producing advertisements.
That’s why it is critical that advertising agencies process invoices accurately and in a timely manner.
But processing invoices accurately and fast is easier said than done for a global advertising agency. With multiple suppliers working on multiple projects, a single invoice may contain charges relating to different clients, products and jobs. In a manual environment, each invoice must be photocopied and routed among approvers. Complicating matters, approvers for global advertising agencies may be located anywhere across the world.
This was the case for one global advertising agency until it transformed its accounts payable processes with digital technologies from IPS.
At any moment, the agency’s billable charges were stacked up on desks, in e-mail inboxes and on desktops across the agency.
The advertising agency’s accounts payable leaders wanted to find a way to automate its manual processes to reduce costs and improve performance.
After an extensive evaluation of potential technologies, the agency selected a digital transformation solution from IPS.
The IPS solution digitizes the agency’s accounts payable processes, automatically captures invoice data and provides an electronic workflow that ensures that invoices are instantly routed to the right approver, without fail. Implementing the IPS digital transformation solution accelerated the agency’s cycle times, reduced paper handling, decreased keying and routing errors, and improved the accuracy of billable charges.
“Business rules are critical,” says Brad Walsh, Product Manager for IPS. “The routing of an invoice depends on the client, the product being advertised, the particular job, and the dollar amount – even on security requirements. The biggest challenge – and the part that provides the greatest value to the agency – is defining the business rules so that IPS Digital WorkflowSM can enforce them.”
Six Sigma Process
The agency’s process starts when invoices arrive in the mailroom as paper, or by e-mail or through the IPS Portal. Whatever the source, the IPS solution converts the invoices to standard digital format. IPS inspects all the digital images to ensure their completeness and legibility.
The IPS solution extracts the required data from each invoice and validates it against vendor master files and purchase orders. The solution builds a complete digital record of the invoice for loading to the IPS workflow and to MediaOcean, the agency’s financial system. Once the invoice and supporting documents are complete, IPS loads the documents into IPS’ secure digital repository.
IPS also provides an automated solution for resolving exceptions.
“Eighty percent of incoming vendor invoices are usually complete and accurate,” said IPS CEO Greg Bartels. “It is the remaining exceptions that create most of the work for the AP department. When you automate, the same thing is true. IPS posts 80 percent of the invoices the agency receives straight-through, without human operator intervention. IPS Subject Matter Experts fix problems ranging from missing purchase order numbers to mismatched remittance addresses – anything that a skilled IPS operator can resolve using their years of invoice processing expertise.”
As a result, only true exceptions reach accounts payable managers.
“Let’s say an incoming invoice is for an amount that is higher than the remaining balance on the purchase order,” explained Walsh. “That’s a meaningful exception, not a processing error and it deserves the client’s attention. We load the document and metadata to the exceptions queue in the workflow for action and the agency’s financial specialists go to work.”
The Workflow at Work
The IPS digital transformation solution provides authorized users across the global advertising agency with secure electronic access to an automated approval system for accounts payable. Each day, IPS uploads newly received invoices as PDFs linked to electronic invoice data. The solution automatically alerts approvers of invoices awaiting their approval and starts the clock running on each invoice. The IPS solution digitally links approvers to invoices awaiting their attention.
Accounts payable staff can monitor the progress of invoices in real-time. Staff also are alerted to any invoices that have been in an approver’s queue for too long. The agency’s financial specialists can monitor an exceptions queue and take the actions necessary to clear any problems. The IPS digital transformation solutions also enables each approver to instantly see the coding for each approver.
As invoices are approved, the IPS solution posts the accounts payable and general ledger data directly to the agency’s MediaOcean financial system. Documents and data remain instantly available on IPS’ digital repository for records retention, review and audit purposes.
Digitizing its accounts payable processes has enabled the advertising agency to reduce manual keying, eliminate paper handling, accelerate invoice approvals from weeks to days, and more accurately charge back billable expenses to the appropriate jobs and clients. The time required for signing off on that invoice drops from weeks to days, and more billable expenses are accurately charged back to the appropriate jobs and clients.
IPS has delivered significant benefits for this global advertising agency over many years. The agency recently expanded its relationship with IPS to include its specialty healthcare unit, which provides marketing and advertising services to the healthcare industry.
As a result of automating its healthcare process with the IPS digital transformation solution, the global advertising agency has:
- Reduced its accounts payable costs by 50 percent
- Increased data accuracy to Six-Sigma 99.997% – virtually eliminating defects
- Improved accuracy in charging billable expenses back to jobs and clients
- Increased agency cash flow with faster invoicing of billable expenses to clients
- Accelerated invoice cycle times from an average of 18 days to 6 days
- Strengthened working relationships with vendors through more timely payment
“We are very proud to have one of the world’s top advertising agencies as our client,” said Bartels. “It is a partnership that has delivered great results – their passion for performance, our systems and expertise, and a shared commitment to getting it right.”