Scottish Courage toasts success

New purchase invoice processing solution maximises efficiency and reduces costs

Barry Monk, Freelance journalist

SCOTTISH COURAGE, the UK division of Scottish & Newcastle (one of the top four brewers in Europe) is the UK’s leading producer of beer and cider, with well-known brands including John Smith’s, Foster’s, Kronenbourg and Strongbow. Indeed, Scottish & Newcastle has three of the top ten beer brands in Europe in Baltika, Kronenbourg and Foster’s.

The company can trace its brewing roots back to 1749 when William Younger’s brewery was established in Leith. Today it directly owns or has an investment in about fifty breweries worldwide. The most northerly is in Tornio in Finland, the most westerly is in Lisbon, Portugal, the most southerly is in Kerala in India and the most easterly will be Khabarovsk in Eastern Siberia.

With a share of some 28 per cent of the overall beer market, Scottish Courage continues to grow thanks to investment in its leading brands and the development of closer relationships with both customers and suppliers. One of the company’s key business drivers is the pursuit of cost reduction and efficiency gains, not least of all in its purchase invoice processes.

Invoices worth over £1 billion
Scottish Courage receives in excess of 180,000 purchase invoices a year from a wide range of UK and overseas suppliers, with a total value exceeding £1 billion. Historically, the management of those invoices has involved accounts payable staff manually sorting and matching them to relevant purchase orders and goods received notes and keying in data to the company’s SAP enterprise resource planning (ERP) system.

Scottish Courage therefore decided to move towards an outsourced purchase invoice processing service to improve efficiency and reduce costs, and selected Graphic Data Online (GDO), a provider of document and data management solutions, as its services partner.
GDO immediately addressed the company’s manual, paper-based processes head on by providing a Post Office box address to which supplier invoices could be sent. Once received, GDO scans the invoices and delivers invoice images to Scottish Courage, thereby dramatically reducing the company’s paper handling.

Graham Cameron, Purchase Ledger Manager at Scottish Courage, explained: “GDO filters and deals with all our purchase invoices according to specific business rules. Any invoices that have information missing, such as purchase order numbers, are automatically returned by GDO to suppliers with a standard covering letter, while other non-invoice mail (such as statements) are forwarded to us. In our original process with Graphic Data, invoices were then scanned and images loaded onto a CD, ready to be processed by us utilising software developed by GDO.”

Data extraction
Due to the success of this process, Scottish Courage recently decided to take advantage of the more extensive invoice processing services provided by GDO. Now, invoices are received, prepared and scanned as before and, in addition, data is extracted from each invoice and verified for accuracy from vendor information supplied by Scottish Courage. The invoice images and associated data are then loaded onto GDO’s web-based electronic document management (EDM) and workflow system, where checks are made on import (e.g. completeness, duplication, etc.) and simple workflow is invoked to route invoices to specific category queues.

“Our invoice processing staff can view invoice images by selecting from these queues via a web browser and take the appropriate action,” added Cameron. “Images are viewed alongside our SAP registration and matching screens, with the header data extracted by GDO made available for input into SAP. Once the invoice is processed to SAP, the SAP ID is then entered in an image data field to complete the transaction.”

The timeliness of this process is critical since Scottish Courage’s invoices are processed by both day and evening staff, requiring availability of invoices daily and on time.

Speeding up processing
“After the initial start-up learning curve, the service is consistently providing increased transaction throughput,” said Cameron. “Not only does this latest upgrade to GDO’s service speed up the processing of purchase invoices but the expansion of the service provides staff at our company’s locations UK-wide with equivalent access to the system via a web browser. This has been particularly beneficial where credit notes need to be matched and approved at our depots.”

In fact, although Scottish Courage is still keying data into SAP, using ‘key-from-image’, it has still shown significant productivity increases with throughput equivalent to over 20,000 invoices per annum per Full Time Equivalent (FTE) clerk, with certain categories being processed at over 36,000 invoices per annum per FTE. These compare with the industry-wide norm of around 12,000.

“GDO’s service has streamlined the delivery of invoices to us. It has speeded up the resolution of supplier queries, improved staff productivity, provided instant and highly usable management information and enabled secure archiving with instant access,” added Cameron. “Today we’re putting things in place to provide even better workflow management and reporting tools. We are very happy with GDO who provide the services we want to the standard we require and we’re confident about asking the company to work with us on the next stage.”

GDO’s Purchase Invoice Processing
• Mail receipt via a post-box – Using letter-opening equipment and specialist mailroom software to ensure invoices and other documents enter the process as quickly as possible and are logged for tracking throughout the process.
• Imaging – Production scanners ensure invoices are processed on the day they are received, whatever the volume.
• Integration – Integrate with existing systems and receive regular downloads in order to automate as much of the process as possible.
• Data capture from paper – Specialist software collects data from the invoice image, quickly and accurately, eliminating much manual keying.
• Data capture (electronic) – As well as utilising technologies from traditional technologies such as EDI or XML, less technical suppliers can be helped to provide electronic data at minimal cost with minimal effort.
• Data matching – Cross-referencing related documents such as purchase orders and delivery notes. Where necessary, line data is taken from the invoices to facilitate exception handling.
• Coding and approval – Using workflow software, information necessary for invoice coding and approval is electronically routed, while workflow is managed and monitored.
• Data transfer – Data is transferred in batch to an accounting system using standard interfaces to most common systems, including SAP and JD Edwards.
• Storage – Documents can be stored in any format: electronic image, CD, microfilm or paper.
• Management reporting – Analytical accounting information can be transmitted daily, together with regular reports on the performance of the processing systems.
• Customer/Supplier services – Clients can choose to allow customers and suppliers secure access to establish their invoice status.

Graphic Data (UK) Ltd, Talon House, Presley Way, Crownhill, Milton Keynes, Bucks. MK8 0EE. Tel: 01908 269600; fax: 01908 269602; www.graphicdataonline.com; mike_davies@graphicdata.co.uk

Scottish Courage. www.scottish-newcastle.com

IM@T Online July 2005