PROACTIS Resources

Mears Group

Mears Group increases AP efficiency by 300% with PROACTIS
Mears Group
 
 

Background

Mears Group (Mears) employs almost 16,000 people in every region of the U.K. In partnership with social housing clients, Mears maintain, repair and upgrade the homes of hundreds of thousands of people in communities from remote rural villages to large inner-city estates. Mears care teams throughout the U.K also provide support to around 20,000 people a year.

Mears have a strong record of quality and achievements, prior to moving to the London Stock Exchange FTSE, Mears won the AIM Company of the year award and broke many AIM records that same year. 2009 saw this trend continue with Mears winning the prestigious 2009 PLC Awards for New Company of the Year, sponsored by PricewaterhouseCoopers LLP (PwC) in association with the London Stock Exchange.

Challenge

The rapid growth of Mears was resulting in the organisation outgrowing existing systems and processes. The increase in the number of invoices was resulting in difficulties, especially in instances where the Mears branch network needed to be involved in the approval of incoming purchase invoices. The manual, paper-based processes were resource intensive and if the situation continued, Mears would be faced with employing a significant number of new Accounts Payable (AP) clerks to accommodate growth.

The issue was further compounded by the fact that the strategy of the business was based upon growth in two ways - organic and through acquisition. The acquisition element meant that Mears required processes and systems that could accommodate a rapid increase in invoice volumes should newly acquired organisations wish to take advantage of central functions such as AP.

“We were faced with real challenges in Accounts Payable, we felt that we should be focused on a more creative option rather than simply adding to headcount. We engaged our IT department to look at what forms of automation could help us address the issue and quickly came to the conclusion that invoice automation with scanning, automatic data extraction and receiving electronic invoices could be the answer”, adds Ben.

The Process

The IT department instigated a process of evaluating potential invoice automation providers. The criteria was to select a supplier who would work in long-term partnership with the company to address the areas of improvement within AP and also future requirements across the business. With the business already using an in-house procurement solution for both stock and non-stock items, including fully automated matching, Mears looked for a solution that would allow them to take advantage of the order-to-invoice matching rates through the removal of the labour intensive, error-prone manual process of keying purchase invoice information.

Mears were also keen to take advantage of advances with electronic invoicing and therefore a key requirement was for any solution for paper invoices to also be able to handle the processing of electronic invoices.

The Solution

Mears wanted a solution that would enable them to dramatically reduce the manual keying being undertaken, improve the accuracy of invoice information coming into the business and provide instant document transparency to whoever needed it across the business. PROACTIS evaluated all the requirements and the solution was implemented in two phases to PRINCE2 Project Management methodology.

The first phase was to provide a scanning and data capture solution whereby incoming purchase invoices could be scanned with information being automatically extracted with as little manual keying as possible. Due to the diversity of the supplier base it was not effective for Mears to look at templating supplier invoices for data capture; the solution chosen would automatically extract 80% of invoice information with no prior knowledge of the format of the invoice - a substantial reduction.

Once extracted, the invoice information underwent extensive automatic ‘cleansing’. In instances where captured values were not correct they were automatically presented to a clerk and then onto a web-based exception handler where the branch network could also get involved to resolve the issue as soon as possible, ensuring an unparalleled level of accuracy and effective invoice exception resolution prior to matching. Once all the information was present and cleansed for accuracy, it was sent to the invoice matching solution and then onto the finance system.

Phase two of the solution was electronic invoices in XML format; PROACTIS implemented a solution whereby key Mears suppliers would send invoices electronically for processing. The solution would import the XML invoice, apply a template over the top of the data to make it look like a scanned purchase invoice and process it using the same extensive cleansing for accuracy that is used for paper. Mears have since implemented many practices to ensure that the invoice automation process is as efficient as possible, including the creation of a preferred supplier database whereby all preferred suppliers must have the capability to send invoices in electronically.

“From the first two meetings with PROACTIS,it was apparent that they had a passion for automating processes and a keen interest in how we do things and how they could be made better. It became increasingly apparent that the commitment to long-term partnership made them an excellent choice for Mears.”

Looking Forward

Mears have recently updated the data capture technologies to a new level, whereby the solution continuously improves its capture rates through a “learning” process. This remembers the locations of values on the purchase invoice that it did not at first identify, this then optimises the extraction for all of the invoices from that supplier that follow.

Mears Group continues to focus on process improvement and driving out errors within the process. There are further plans to work with PROACTIS to enable suppliers to play a more active role in addressing errors with invoices as they come into the business.

“We don’t wish to implement a hard-line ‘no PO, no pay’ policy, we want the benefits that this policy brings but we also want to bring suppliers closer to us. The next stages will be to look at how we can help suppliers be more proactive in driving out errors that we receive, an example would be where the supplier has not quoted the PO number when it was generated”, says Ben.

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