Editor’s Note: The deployment of Esker’s purchase-to-pay solution by Luxasia is the winner of Excellence in Purchase-to-Pay Transformation in the Editors’ Choice Awards that recognize well-executed projects carried out by finance departments in collaboration with technology companies. The Editors’ Choice Awards are part of the 7th CFO Innovation Awards.
As business kept growing quickly, Singapore-headquartered Luxasia—a luxury specialist in retail and distribution—wanted to set up a shared services center (SSC) in Malaysia to centralize its accounting department and automate the processing of supplier invoices, initially for Singapore and in the next phase for its subsidiaries.
At the same time, the company decided to automate its accounting processes because many of them were manual, which resulted in higher operational costs, slow invoice processing, heavier workload, and dissatisfaction among employees and vendors.
The old days of manual processes
According to Luxasia, employees seeking invoice approvals created purchase requisitions by hand and printed them out.
Purchase orders (POs) were then manually created in the SAP system, making it difficult to coordinate and retrieve information and documents.
Expense claims processing was also manual, the firms said. Employees used Excel spreadsheets, printed and attached paper receipts, then passed them onto an accounts payable (AP) specialist to process.
The AP specialist would then have to manually enter the information into SAP.
It was about time to improve all these processes, the luxury specialist pointed out. As a result, Luxasia searched for an automation solution that could address the following objectives:
- reducing operational costs
- increasing document visibility and easy retrieval
- implementing a cloud-based solution to facilitate the setup of its SSC
- integration with the company’s existing SAP system
- facilitating other job functions beyond the AP department
- automating additional processes with the same vendor
Integration with SAP
Luxasia selected Esker’s purchase-to-pay solution to automate its purchase requisitions and supplier invoices because it could be seamlessly integrated with its existing SAP system.
To align employees and the department’s vision for this deployment, Luxasia said it involved its staff from the beginning and helped them understand the reason behind the automation.
Automated AP: Highly efficient shared services center
After the deployment, Luxasia now automates and speeds up the processing of its 36,000 annual supplier invoices at its shared services center.
The facility is highly efficient, thanks to the Esker solution’s capability to enable the reading and processing of invoices in more than 120 languages, template-free technology and external, Web-based ERP workflow that eliminate the headache of processing diverse invoice formats and languages from multiple offices.
That external ERP workflow also delivers simplified setup of the SSC and the ability to work with different departments, resulting in higher efficiency gains.
Automated purchasing process: Higher visibility, faster and paperless approvals
In addition, Luxasia can now raise a purchase requisition and trigger a workflow for approval of non-inventory items.
Once the purchase requisition is approved, Esker creates the corresponding PO and automatically sends a copy to the supplier.
As the person who receives the goods may not necessarily be the requester, he or she can assign beforehand who will receive the goods.
The receiver creates the goods receipt by entering the quantity received and the information is pushed to SAP.
As a result, approvals are paperless and faster while the entire process is 100% visible. Visibility for those outside of the purchase requisition process has also seen improvement.
Other gains: easy-to-track expense claims, mobility
The deployment has also brought a range of other benefits such as a 20% improvement in both costs savings and productivity.
In addition, employees can now track their claims and easily communicate with the AP team using the comments section in the solution interface.
The expense claim process has been expedited after the solution deployment while paper use has been reduced by 80% because employees are no longer required to print hard-copy receipts.
The solution’s ability to allow managers to use any mobile devices makes it even easier for employees to adapt to the automated processes. In addition, the mobile application Esker Anywhere makes on-the-go invoice review and approval capabilities possible.
Thanks to Esker's flexible platform, Luxasia has also added more processes to meet internal needs, such as GL account creation, order acknowledgement and payment advice.
Other benefits that the company has experienced include enhanced visibility of important information brought by Esker’s customizable dashboards and the easy-to-use single solution interface that meets different user needs.
“We’re now able to track productivity and better manage our resources thanks to Esker's dashboard and reporting capabilities. Esker has also helped us streamline our processes and ensure a consistent work standard,” Jasmin Ong, regional finance controller, Luxasia remarked.