Invoice Processing Goes Hi-Tech

The Situation

Perishable Distributors of Iowa, Ltd. (PDI) is a wholly owned subsidiary of HyVee, Inc., Iowa’s largest employer. PDI is one of the nation’s largest food distribution companies, supplying more than 5,000 perishable food products — including fresh chicken, beef, and pork; seafood; boxed frozen foods; bakery, dairy and deli products — to grocery customers in eight Midwest states. PDI has approximately 500 employees including office staff and transportation and warehouse personnel.

Each of PDI’s suppliers created an extensive array of paper documents and invoices that PDI would have to approve, pay, ship and process several times a day. Combined with grocery customers who each had their own supporting documentation, PDI was challenged in its ability to manage the volume of paper required to conduct business. PDI processes more than 3,500 invoices per month and experiences an appreciable increase during the holidays.

Moreover, the sheer volume of paper that changed hands also created workflow challenges. As paper was filed, re-filed, faxed, e-mailed, transcribed or otherwise acted upon, PDI had difficulty in not only tracking the progression of any particular invoice as it was processed, but also establishing accountability for that invoice among staff involved in the invoice-processing chain. An analysis revealed each document was “touched” between 34 and 42 times as it was processed.

The large quantity and flow of invoices to, from, and through PDI presented not only logistical and organizational challenges but also financial challenges. Invoices that were not paid, processed, or otherwise acted upon in a timely manner sometimes caused PDI to miss out on early-payment incentives — and sometimes resulted in costly late-payment charges that further frustrated PDI leaders and employees, and created the potential for soured vendor relationships.

Linda Sharp, Executive Vice President, Secretary, Treasurer said, “I was apprehensive at the beginning of this project, as I had heard stories of companies who spent more time scanning documents than they had planned, and did not see the anticipated return on investment. The Metafile programming and implementation staff provided a workflow that exceeded my expectations.”

The Solution

Recognizing the need for an end-to-end invoice-processing and workflow solution to streamline the inflow and outflow of invoices and realize operational and cost savings, PDI researched nearly a dozen accounts payable (AP) document management solution providers using a cross-functional team composed of treasury, purchasing, inventory control, transportation, accounts payable professionals and more.

Top priorities among PDI decision makers were electronic capture of information and integration with PDI’s homegrown enterprise resource planning (ERP) solution running on IBM’s® iSeries® AS/400® server platform. At the end of an exhaustive search among solution-provider candidates, PDI selected Metafile’s MetaViewer solution for its experience in addressing these needs.

Gary Churchill, PDI’s Assistant VP of Information Technology, indicated Metafile offered the in-depth knowledge of the end-to-end accounts payable process and an innovative approach to “e-payables” technology — using technology to capture, extract, and route digital invoices electronically — that most competitors could not match.

“Among the solution providers we evaluated, Metafile truly understood our desire to electronically exchange and manipulate all data — from the invoices themselves to the documents supporting them — at each phase of PDI’s invoice-processing chain,” said Churchill. “While other providers were talking about scanning paper documents, Metafile was talking about eliminating the need for paper altogether and adapting our workflow to establish staff accountability and extract maximum savings and ROI from our automation investment. That’s something other providers were unable to do.” MetaViewer offers automated indexing and text extraction from any invoice, links to or attachments of supporting documents, workflow steps, customized action-oriented e-mails and customer notification tools — all of which streamlined PDI’s AP process and created opportunities for efficiency and enhanced ROI.

PDI’s accounts payable manager uses MetaViewer’s Document and Workflow Monitor to create a real-time dashboard view of the flow of each invoice within the AP department that includes customized alerts and gauges to identify and rectify missed deadlines, stalled invoices and other process breakdowns.

“The visibility and accountability that the MetaViewer solution affords is invaluable,” said Donna Stoelk, Accounting Supervisor. “Not only does each member of my team understand his or her role in the accounts payable process; I’m also afforded the opportunity to understand and quickly address breakdowns in the process with a single click, boosting my team’s productivity and adding tangible value to PDI’s bottom line.”

The Results

Metafile’s MetaViewer solution embodied PDI’s main motivation for streamlining its AP function: to optimize AP workflow to ensure tasks and responsibilities were clearly defined and evenly distributed among the team. The result: PDI employees spend less time on process and more time adding value to PDI’s business and performing revenue-boosting activities such as negotiating purchases, verifying actual inventory, and validating invoices in more detail.

In addition, PDI realized a ROI less than one year after its implementation of the MetaViewer solution. PDI estimates that its annual processing costs went from $135,000 per year down to $80,000 per year following MetaViewer’s implementation. The processing time required for the average invoice was reduced from one week to one day.

Churchill also attributes PDI’s early achievement of ROI to Metafile’s commitment to doing whatever it takes to ensure PDI’s continued satisfaction. “Metafile affords PDI a direct connection to its technical teams who routinely go out of their way to make sure our solutions are running optimally — and continually scale as our business grows,” he said. “It’s that constant attention to our satisfaction that’s cleared the path to accelerated ROI, helping us control costs and create conditions that are favorable to revenue growth.”