SGS france chooses business process management to better manage suppliers' invoices

SGS chooses business process management from Iron Mountain to better manage suppliers’ invoices

Challenge:

Improve business efficiency - processing of paper invoices was labour intensive and cost analyses were difficult to obtain

Solution:

Delegating invoice processing to Iron Mountain using a SaaS management platform

Value:

Processing time has been halved and productivity savings of  €450,000 per year have been achieved

Client

Founded in Rouen in 1878, SGS has become the world leader in product verification, inspection, analysis, and certification services. The company employs 64,000 people and has some 1,250 offices and laboratories worldwide. In France, the company employs 2,450 people and has 23 specialist laboratories undertaking product analyses, from raw material through to the end product, as well as environmental inspections.

Challenge

Responsible for the accounts of every SGS France business area, the finance division processes 80,000 supplier invoices per annum. In the past, management of paper invoices involved unwieldy internal procedures and physical document workflows. In order to produce cost analyses, operational departments needed sight of these invoices, which involved labour intensive retrieval.

SGS France decided to look into a paperless solution. Among the issues to be addressed were reducing supplier invoice processing time, simplifying workflows, and improving overall operating cost visibility. SGS also wanted to match invoices and purchase orders from its Oracle e-procurement system. Full traceability was essential.

Solution

Eric Sarfati, Administrative and Financial Director at SGS France, explains the choice of Iron Mountain: “Most solutions solved the handling of physical documents, but did not offer workflow management. Iron Mountain was the only company that enabled us to manage all invoicing workflows and processes on an open platform that could be adapted to meet our needs. Now we have a single service provider for the whole invoice lifecycle from receipt to destruction.”

Before the new system was implemented, SGS mapped its internal processes to help standardise them across the company. Taking account of this analysis, Iron Mountain assisted SGS in developing the system and now supports SGS through every step of the supplier invoice path including:

• receiving and scanning invoices
• extracting company information and performing compliance checks
• managing the validation and accounting workflow
• creating a gateway to e-procurement tools
• providing a remote management tool, including access to all invoices in pdf format
• offering dashboards and monitoring tools
• archiving invoices in paper format and destroying them securely at the end of the statutory retention period

The first phase in the paperless process is the scanning of invoices and extraction of information to enable processing. In the absence of a purchase order the tool allows for automatic pre-allocation of invoices against the relevant cost centre by using a combination of criteria, for example the supplier name and the company invoiced. Otherwise this information is automatically retrieved from the Oracle e-procurement system. Additional invoice information can be added manually. All actions, validations, comments, and disputes are tracked by the tool and recorded with the date and the person performing the action. This is crucial for internal audit purposes.

"Iron Mountain was the only company that enabled us to manage all invoicing workflows and processes on an open platform that could be adapted to meet our needs. Now we have a single service provider for the whole invoice life cycle from receipt to destruction."

ERIC SARFATI, ADMINISTRATIVE AND FINANCIAL DIRECTOR, SGS FRANCE

The Iron Mountain platform indexes invoices based on between 14 and 25 criteria, and checks they comply with statutory or SGS internal accounting rules. The documents are then classified so that they can be processed separately. Eric Sarfati explains: “There are two invoice handling processes. Invoices with purchase orders on the one hand; and invoices such as electricity or vehicle hire bills without purchase orders on the other.”

The Iron Mountain platform now receives 80 per cent of SGS France supplier invoices directly, while the majority of the remaining 20 per cent are transferred from the point of receipt. Non-compliant invoices can be returned to the supplier automatically by email, with problem areas highlighted.

Value

The Iron Mountain business process management solution is an online service, charged on the number of invoices handled, so SGS did not have to make capital investment in servers or equipment. SGS also does not have to manage variation in document workflows. It’s Iron Mountain’s job to adapt to peaks and troughs in activity. Furthermore, the Iron Mountain platform is adaptable. For example, for SGS an accounting gateway with the Oracle e-procurement tool was created.

Supplier invoice processing used to require about 15 different processes from receipt to archiving, via internal distribution, validation, photocopying, and accounting. The Iron Mountain solution and the new SGS operating rules mean that the number of processes to be managed has been reduced considerably. The time gains are considerable for 40 subsidiaries and the accounting department.

"We calculate that processing time for supplier invoices has been halved, generating an estimated €450,000 per year in productivity gains."

ERIC SARFATI, ADMINISTRATIVE AND FINANCIAL DIRECTOR, SGS FRANCE

Eric Sarfati says: “We calculate that processing time for supplier invoices has been halved, generating an estimated €450,000 per year in productivity gains.” The system also makes it possible to reduce the time spent on disputes with suppliers.

The Iron Mountain service is available 24/7 and offers direct, secure access for operators and managers of business areas who want to check certain invoices. 25 SGS people use the Iron Mountain platform on a regular basis, with another 350 occasional users. They can manage invoices, validate them, or simply access PDF copies. It is even possible to view an image of the invoice from the Oracle system.

“The ease of working for all users is of immeasurable value,” concludes Eric Sarfati. “Information exchanges are much more fluid. For example, purchasing department personnel used to have to run from department to department to obtain the data necessary to produce costs studies. That’s no longer the case.”

"Now we have a single service provider for the whole invoice lifecycle from receipt to destruction."