Manufacturer Saves $1.6 Million Annually with OnBase Capture
As an S&P 500 global manufacturer, Leggett & Platt, Incorporated produces a variety of products for homes, offices, automobiles, airplanes and retail stores. However, as the business grew, managing its cash flow was difficult with so many paper-based processes in place.
Initially, AP staff faced thousands of invoices representing $3 billion in spending annually. As a result, the team manually processed as many as they could every day. Processing each invoice required staff to print and hand-key all needed data into the company’s ERP, PeopleSoft. After this, they had to transfer it to its mainframe application for payment.
Processes were similar in AR. Its mainframe application only automatically matching five percent of its payments with customer account records. As a result, staff had to apply the remaining receipts – roughly 350,000 payments a year – manually.
To eliminate the challenges of manual processing, Leggett & Platt chose OnBase capture to collect data without manual keying or using templates. Now, the company electronically captures data from invoices, remittance images and check images, and validates it. Finally, they transfer it to PeopleSoft and the mainframe application.
The combined return on investment (ROI) for both departments was realized in less than a year.
Slashes $1.5 million annually in AP labor costs
Using the capture solution, the manufacturer automatically captures data from invoices, regardless of where it’s located on the page from one vendor to the next and transfers it to their ERP system. The solution remembers where it found the data the next time each vendor’s invoice appears. As a result, this makes data capture more efficient over time.
And with more than 55,000 vendors sending invoices to the company – more than 2,500 a day – streamlining this process has been invaluable. The company slashed $1.5 million annually in labor costs, reducing its invoice processing staff needs by more than 40 percent.
“We’ve reduced our cost per invoice by 69 percent in five years, from $3.99 per invoice to $1.21,” said Nikki Head, senior assistant AP manager for Legget & Platt.