Beverage and packaging producer – an example of effective management of accounting processes for purchase invoices thanks to MDDP Outsourcing.
Stabilization and improvement of purchase invoice processing with MDDP Outsourcing in the activity of a customer from the production and bottling sector of non-alcoholic beverages, a member of an international group.
The customer, a German company dealing in production and bottling of non-alcoholic beverages, is a part of an international group. The company has nine production plants in Germany and a central office that handles, among others, the processes of verification and purchase invoice posting (AP process – Accounts Payable) for over 20 independent units. The company uses an SAP system and for the handling of AP processes it utilizes an additional module dedicated for the management of such processes. Every month, the company receives several thousand invoices that are automatically entered into the system but they need to be verified, complemented with data, then posted or sent for clarification or approval. Due to its constant growth accompanied with an increasing volume of documents and, at the same time, employee turnover, the company had to struggle with delays in payments as well as difficulties with maintaining high-quality processes that would be in line with SOX requirements.
Challenges
- A high number of purchase invoices: the customer’s in-house purchase department was unable to keep up with the high number of invoices, resulting in payment delays and disruptions or even a potential stoppage of production.
- Employee turnover: quite frequent personal changes connected with employee turnover in the accounting department intensified the problems arising from the high number of invoices. The situation was also affected by the allocation of tasks, with the lack of detailed instructions for the processing of individual types of documents. Thus, it was necessary to implement solutions that would ensure knowledge continuity and, at the same time, allowing for a stable management of invoice posting processes.
- Complex nature of processes subjected to SOX controls: because of the need to maintain strict control over accounting processes, in conjunction with, among others, processes for order management, approval and payments according to SOX requirements, it was necessary to ensure thorough verification of documentation and an efficient external circulation in order to clarify potential discrepancies and obtain approvals from relevant persons, which posed an additional challenge for the in-house team in case of a large number of documents.
The solution implemented by MDDP Outsourcing
MDDP Outsourcing, which had already provided services to a domestic company from the customer’s group, was recommended to extend the cooperation and provide support in verification and posting processes in the German company. The take-over process was implemented gradually. At first, we immediately introduced processing of simple warehouse invoices connected with orders and then moved on to more sophisticated cases, such as cost invoices, corrections and documents that required contacting many different people at the customer’s facilities (consultations regarding the correctness of various parameters and approvals). Key areas of the implementation ensured by MDDP Outsourcing:
- Accounting management in the customer’s system (SAP)
Thanks to its high experience in working on ERP systems, such as SAP, MDDP Outsourcing smoothly adjusted its duties to the customer’s requirements. Regular work meetings with the customer allowed MDDP Outsourcing to fully understand the specific nature of the processes, task distribution (workflow), order types as well as the structure of the account plan and cost centers. With the knowledge about the internal rules of the customer, we were able to quickly adapt to their requirements and standards, which increased the operational effectiveness of the task take-over process. - Process standardization
For more complex processes, we prepared templates of the used parameters and contacts involved in the workflow as well as proposed standardization of the comments used in the workflow circulation, which resulted in their better transparency and streamlined the cooperation between individual departments and, as a result, improved the work effectiveness. - Continuous communication with the customer
From the very beginning of the cooperation, we organized regular technical meetings with representatives of the customer’s accounting team and monthly status meetings with the management; as a result, we could discuss the specific nature of processes and ongoing difficulties. After the implementation, we still held the monthly status meetings and organized additional technical meetings in case of the need to discuss new suppliers and delegate new tasks. - Knowledge continuity management
Thanks to regular internal meetings to discuss crucial rules and specific cases concerning various suppliers and the instructions prepared by MDDP Outsourcing, it was possible to ensure knowledge continuity and stability of handled processes even in the case of potential absence of a specific employee which, in practice, without outsourced services, could disrupt both the accounting processes as well as the realization of the payment, leading to a possible negative impact on the continuity of supply. - Stabilization of processes in case of temporary overload with additional tasks
Thanks to the effectiveness and flexibility of its services, MDDP Outsourcing endured not only stability of the accounting processes in the AP area, but also supported the realization of individual and periodic, labor-intensive associated tasks, such ass mass data entry of suppliers into the database (Master Data) in case of the customer’s acquisition of a new plant or production launch of new products. The continuous effort to update expertise in the team also allowed for effective induction of new employees in case of the need for a broader range of our service, which most certainly improved the customer’s operational stability. - Support in scope of the SOX compliance control system
MDDP helped the customer ensure high-quality control processes connected with verification, approval and payments of purchase invoices, in compliance with SOX requirements. As a result, the customer could reduce the risk connected with irregularities in their systems and accounting documentation as well as increase their control over purchase processes, order realization, and cash flow planning and approval.
Basic advantages for the customer
- A better control over the processes: the high-quality work and attention to detail of the MDDP Outsourcing employees allowed for a better identification and elimination of discrepancies between the data in the orders and on invoices within the scope of specific suppliers from other capital groups, payment deadlines, etc.
- Process continuity: thanks to assigning a dedicated team and preparation of detailed internal instructions, the accounting processes were handled smoothly and without interruptions, even in the case of absence of individual employees. MDDP Outsourcing ensured continuous processing of invoices and stability of the team work, even in the face of employee turnover at the customer’s company.
- Better financial liquidity management: Thanks to the cooperation with MDDP Outsourcing, the customer considerably reduced the number of overdue liabilities which had a positive impact on their relations with key suppliers. Additionally, the customer ensured greater supervision over payment deadlines which in certain situations were longer than those assigned to a particular supplier in the system. At the same time, the customer could reduce the risk of delays and penalties for late payments to minimum.
- Flexible use of resources. Thanks to the pro-customer approach of MDDP Outsourcing, whenever it was necessary to carry out single labor-intensive tasks, the customer was able to temporarily extend the scope of the services we provided to them, including activities indirectly related to the basic services. As a result, the customer could reduce temporary employment of new workers or the need for overtime work in order to handle the additional tasks.
Thanks to the cooperation with MDDP Outsourcing, the customer did not only manage to solve their ongoing operational problems concerning posting of purchase invoices, but also ensured long-term stabilization and effectiveness of accounting processes, compliance with SOX regulations, and operational stability. The customer appreciated the approach and dedication of the MDDP Outsourcing team, which resulted in a broader scope of cooperation – from one FTE specialist to two, with further negotiations about involving a third specialist. Thanks to its experience in management of ERP systems, implementation of labor-saving solutions and its flexible operations, MDDP Outsourcing became an important and trusted partner that supports the customer in their further, long-term growth and optimization of financial processes.
