Nuneaton and Bedworth Borough Council procures goods and services worth around £20 million annually. The local authority has used UNIT4 Agresso as a back-office system for corporate finance but recognised that a council-wide purchase-to-pay solution was needed that would include eInvoicing to further streamline and automate processes.
Improved procurement controls across the council including a single process for purchasing and invoicing was required. The cost of processing each transaction was excessive (at approx. £35). Effort was often duplicated, with details copied manually across systems and sometimes three different spreadsheets. The council had a team of 6-7 people processing 44,000 invoices per year. But more than 60% of invoices had no purchase order, resulting in a waste of administration time sorting queries.
The council wanted a single, corporate purchasing process - with eInvoicing included - to increase compliance and target savings. Gaining the buy-in of the council's corporate management team was essential to ensure that such a transformational project was successful. The council also recognised that a change in the organisational culture would be required and the new software tools needed to be easy for staff to use.
Why PROACTIS Solution?
Nuneaton and Bedworth choose PROACTIS as its partner. This followed an evaluation of suppliers with a proven track record in local government, who were on an existing framework contract.
It was recognised that an automated invoice processing approach could result in substantial efficiency savings of anywhere between 60-80% compared to a traditional paper-based process. The project would achieve a rapid payback.
The council and PROACTIS worked together to define, create and launch E-Buy, the name chosen by the council for a new purchase-to-pay (P2P) solution that included eInvoicing based on proven technology and techniques. The joint team also designed its integration with UNIT4 Agresso finance system.
As part of the supplier on-boarding process, the project unearthed an 'underground' collection of suppliers whose details had never appeared on council systems. Through supplier rationalisation and better processes, the council reduced the number of invoices it receives from 44,000 to 33,000.
Three different methods were introduced to enable suppliers for eInvoicing:
- 6% of eInvoices now arrive via system-to-system XML connections
- 35% are created at a web portal where purchase orders are 'flipped' into eInvoices
- 59% are received through scanning and advanced OCR (optical character recognition)
Council budget-holders and users found the new solution intuitive. "Getting council staff to use this system was like 'pushing on an open door'. The overwhelming number of people favoured the intuitive and easy-to-use interface of the PROACTIS solution interface," says Steve Ryder, the council's Strategic Procurement Manager.
Nuneaton and Bedworth Borough Council has proved that the rewards of electronic invoicing (eInvoicing) are within easy reach for smaller local authorities. With executive backing and modest resources, the council has quickly gained compliance benefits and clear savings.
"eInvoicing takes waste out of the system. Even with only 500 eInvoices a year, an organisation could make noticeable savings. The more resources you invest, the faster the payback," says Steve Ryder. "Rather than adding complexity, eInvoicing actually simplifies the whole process for us by removing thousands of pieces of paper and making everything visible in one place. The council can see bottlenecks and then fine-tune processes.
"eInvoicing is also good for compliance and budgeting. Departments benefit from a transparent system that lets them account for spending and track every invoice in the system."
Three quarters of invoices are processed by the council's construction industry scheme system and are currently unreachable by eInvoicing (though there are plans to change this shortly). Of the remaining invoices, 80% (7,019) are now processed electronically. The council is on course to hit saturation point.
- The average cost of transactions (for the purchase-to-pay process, including invoicing) has fallen by 80% from £35 to £7
- eInvoices handled automatically by OCR cost less than £1 each
- Ad-hoc invoices that need to be 'flipped' manually by council staff take less than 60 seconds each
- Staff resources required have been reduced from 6-7 to 2.5 full-time equivalent positions
- The system regularly and automatically averts over-payments worth hundreds of pounds at a time - by spotting duplicates and other errors buried within invoices that have thousands of lines
- Small-and-medium sized suppliers benefit from timely payments within 10 days
- Prior to the project, the council was processing and storing an average of 40,000 paper invoices per annum. The storage space needed has reduced significantly
The council is intending to include a requirement to trade electronically (including eInvoicing) within all new supplier contracts. "Smaller suppliers readily accept the need for this, as they understand the 'win-win' for both themselves and the council," says Naomi Beckett, Systems Support and Training Officer.
The council is preparing to take its eInvoicing strategy to the next level with a major expansion. It plans to address the 24,000 invoices that are currently processed through its construction industry scheme. These invoices include labour costs and require extra workflow processes. The council plans to use a mix of eInvoicing methods from the PROACTIS solution as well as one of its other innovative services, which accepts and processes invoice files attached to emails.
Nuneaton and Bedworth has employed just one employee in its eInvoicing support and training section, working three days per week. However, the council recognises that a faster payback will be achieved with more staff. Plans are being made for three more people to be trained, ready for this exciting and rewarding expansion of its eInvoicing capabilities.