Case Study ModusLink
Implementation of the automated invoice processing solution in ModusLink
Using an example, we would like to showcase an innovative approach to optimising and standardising processing of incoming invoices and demonstrate how implementing the SAP Vendor Invoice Management solution can help reduce costs and accelerate invoice processing – from their delivery to the company until final payment.
- ModusLink Global Solutions Inc.
- A provider of solutions for management of the digital and physical supply chain and logistics
- Local solutions with limited possibilities without integration into SAP
- Country-specific invoice processing
- Low quality of automatically extracted invoices
- Manual entering of data
- SAP Vendor Invoice Management (SAP VIM)
- SAP Invoice Capture Center
- SAP Document Archiving
- Standardisation and acceleration of worldwide invoice processing
- Support of various types of accounting documents (Chinese, American, European etc.)
- Maximum automation of the process
- Increased productivity of payment processes
Brief Overview of the Solution
In the individual ModusLink companies, all incoming paper invoices are scanned and handed over to SAP. Invoices received via e-mail are checked and sent into SAP directly through the e-mail client. After the invoices are archived in SAP, information needed for processing is extracted. Material invoices are automatically checked and matched with the purchase order and the receipt slip and subsequently processed automatically. Invoices without a purchase order are checked, marked with the cost centre information, approved through an approval matrix and processed automatically.
Users handling invoices on a daily basis (accountants, purchasers etc.) use the SAP GUI user interface for their work. Invoice approvers use a web portal optimised for invoice processing. Vendors have a special vendor portal at their disposal for viewing the current status of their invoices.
Each step of invoice processing is monitored and all status data on the process, KPI, users, vendors and obligations are recorded and displayed in well-arranged reports. Users who are late with processing are notified by e-mail.
Benefits of the Solution and Added Value for ModusLink
- Standardisation and acceleration of invoice processing across the whole company.
- Successful data extraction from accounting documents regardless of their country of origin (Europe, China, USA and other).
- Making invoice processing less labour-intensive with the help of a high degree of automation in invoice processing, especially automated three-way matching of invoices with purchase orders and receipt slips.
- Increased productivity of payment processes – accurate and timely financial reporting through access to invoice processing status information throughout its whole life cycle.
ModusLink Global Solutions, Inc. (NASDAQ index: MLNK) is a global provider of digital and physical supply chain and logistics management solutions. The company has 21 branches in 14 countries (USA, EU, Asia and Pacific). Organisation and operation of the internal company audit and its definition with regard to the Internal Audit Department are governed by SOX (the Sarbanes-Oxley Act – a law imposing obligations and responsibilities on companies traded on the US stock market in terms of transparency and accuracy of accounting and financial statements).
ModusLink’s Motivation to Implement the Solution
Originally, the company used its own invoice processing solution that was not satisfactory for a couple of reasons. The main issue consisted in regular updates and complicated implementation of new requirements. The quality of data automatically extracted from invoices was low and the solution was not integrated with SAP, so important data had to be transferred manually between the two systems.
In view of the above, ModusLink decided to optimise invoice processing in cooperation with Sabris and implement SAP VIM, a robust global solution, to ensure uniform processing of accounting documents across the ModusLink companies around the world, including SAP integration.
The project was launched in September 2016 with a pre-implementation analysis where Sabris worked with ModusLink to define its needs and expectations regarding implementation of the invoice processing solution. Subsequently, Sabris prepared an SAP VIM process outline and, following a gap analysis, identified requirements to be taken into account when implementing the solution.
After signing the contract in November 2016, work on a thorough analysis of requirements started. On this basis, Sabris then proposed solution in the form of a Blueprint document. Following ModusLink’s approval, Sabris developed a prototype solution, which was used for training of key users and administrators at ModusLink. Before going live, some settings were adjusted. The solution went live in two phases – in March 2017 (USA) and April 2017 (China).
“The implementation was successful mainly thanks to an active involvement of the business architect who had the decision-making rights as regards the whole process on the part of the customer. We managed to implement SAP VIM in all ModusLink branches in a short period of time without a need to adjust and re-develop the product in spite of the fact that the solution was being implemented in a Sarbanes-Oxley Act compliant company and the fact that users of the new system were spread across many time zones.”
Project Duration and Participants
The whole project lasted for 6 months, during which the solution was implemented in all ModusLink companies which use SAP for invoice processing. The project participants on behalf of the customer included the business architect, IT key user, IT project manager and business project manager. The participants on behalf of Sabris included the architect, project manager, two SAP consultants and two OCR advisors and three testers.