Magnox Limited streamlines and automates invoice processing and achieves 60% AP cost savings

Objectives

Magnox previously relied on manual paper handling and invoice entry. “Before we introduced the Proactis software into our business, our Accounts Payable tasks were outsourced to another partner within our current group,” stated Carl Jenner, Governance and Payments Accountant at Magnox. "They received invoices by post and email, scanned them all as hard copy invoices and loaded them into an invoice library on a SharePoint solution. They would effectively remotely clear these invoices for payment and create the BACS file which Magnox then paid.”

It was a long and manual process to pay invoices, and these were only visible once they had been uploaded to the Sharepoint solution. Having the invoices in Sharepoint meant if there was a query with an invoice you had to login to a separate system and search for the invoice number to see the image of the invoice, which was time consuming and not always sucessful. “At that particular point in time we were probably paying invoices about 75 to 80% on time,” continued Carl. “Clearly, we needed to update our invoice processing arrangements, so we could not only pay suppliers more quickly, but also have full visibility of where each invoice was in the process. We also wanted quick access to invoices that had queries on them or that were pending payment.”

Naturally, Magnox required a solution to also reduce costs. The original process of outsourcing was quite expensive, and the manual processes meant that a team of eight FTEs was needed. “As a government organisation, we really needed to improve our payment terms percentage as we have targets from central Government to make sure that we pay our suppliers on time and as quickly as possible. And 75 to 80% wasn’t good enough.”

Magnox was aware of the long-standing strategic partnership and seamless integration between Proactis and Unit4. “We knew that the solutions complement each other, and I think that’s especially true from an AP automation perspective. As we wanted to make sure that we were using two solutions that actually talked to each other and were really embedded, this made the decision to implement Proactis fairly straightforward.”

Benefits

A big challenge from the management team at Magnox was to reduce the cost of the AP function by moving it in-house, and to improve payment terms.

“Payment terms are currently at about 95%, which has improved markedly. We now rely on three people plus an AP supervisor, which is a full payables function for us, covering AP and business expenses. Because of Proactis, we haven’t needed to add any extra people to the team. Some staff have been reassigned, which has led to a saving of about 60% on the cost that we had before.“

Invoices that used to be hard to manage now seamlessly go to the managed service hub in Telford, via hard copy and email. Invoices are scanned and, if all the required information is there – the supplier information, the PO and the invoice – they drop straight through from the Proactis solution to Unit4 through a secure file transfer protocol. Once it finds the goods receipt in there, the invoice automatically gets paid.

Carl adds: “The Proactis service means we no longer need to handle incoming invoices, irrespective of how they are sent, or the manual entry of information. This frees up staff to focus on more value-add activities and the web-based query capability drives further efficiencies for us. The ability to view it from our existing Unit4 system ensures we have instant access to each invoice as we need it and we have welcomed the knowledge and expertise from Proactis, especially as a strategic partner of Unit4. For us it’s a really seamless operation.”

The control that comes with automatically capturing, scanning and importing invoices improves the resolution of non-compliant invoices and drives transparency throughout the process, and significantly reduces wasted time and money previously spent on discrepancies.

“This really has been a transformational project for us. Thankfully the project team from Proactis have been absolutely brilliant; really supportive. We had to recruit and train people from scratch not only on the Unit4 software but also Proactis, but they held our hand all the way through the process. It went without a hitch.”