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Reducing the cost of posting invoices

The company, which ordered at ROYAL SEAL, sro solutions suggestion , how to reduce the cost of processing large amounts of invoices, does not want to disclose its name. Therefore, we will describe only the implementation of the project without corporate data. The core business of the customer is the operation of retail stores.

A customer had the following problem:

The customer operates several retail stores, which are supplied each day with different goods by various suppliers. Not only are the goods different, but they also have different warranty periods, use-by dates etc. Not all the suppliers supply their goods to each store. As the stores are spread across a large territory and our customer prefers a regional approach, it is normal that different stores have different suppliers, even for the same products. When the goods were delivered, the store manager signed the delivery notes and these notes were then sent together with the invoice to the headquarters, where a number of “accountants” copied the goods from the delivery notes into the system then posted them into the accounts. The staff involved in the process behaved more like copying clerks than actual accountants. Therefore, the cost for document logistics and the accounting staff were substantial. The total annual cost was around 4,300,000.00 CZK. a

Project objective:

The aim of our proposed solution was:

  • Increased efficiency in the processing of invoices,
  • Reduction of errors in the processing and transmission of documents,
  • Minimum 10 % cost reduction (approximately 450,000.00 CZK) per year.

Proposed solution

The beginning of the process was a very difficult period as the customer mainly wanted “cosmetic” modifications with the objective of achieving much-needed savings, rather than solve the problem “once and for all”. Eventually, we managed to convince the customer to make the changes starting from scratch.

The result is the following solution

Each store is now equipped with a small scanning stationary unit. The document is scanned, sent electronically to the headquarters and the paper document is filed in the archiving boxes, which are regularly collected and delivered to our (ROYAL SEAL) external registry. Our company extracts all the required information (quantity, type, warranty, price, date, supplier, maturity etc.) from the documents received at headquarters and prepares them for review and processing. The accountants validate the extracted information and conduct their own accounting procedures. The customer was able to reduce the number of employees while the remainder had part of their salary increased because they did not need to copy anything down anymore; the employees are better qualified and perform the work of accountants and are no longer only processing clerks. 

The project took place in 2013 and was implemented within three months. The project costs (including HW and SW equipment) were approximately 1,200,000.00 CZK.

Practical benefits of the proposed solution

  • Reduction of errors in the accounting of documents. This led to savings in time and money that otherwise would have been spent on rectifying errors. 
  • Faster information access, comfort and an up to date overview of the state of the finances and the goods inventory.
  • Prevention of risks in handling, archiving and shredding documents.
  • Expansion of document management, which now includes activities that could not be carried out before, e.g. sorting and inventory of documents in the Registry Office, shredding, etc.
  • Compliance with current legislation.
  • Reduction in the number of employees and in turn, easier management and organization. This also meant financial savings.
  • More flexible response when dealing with different situations.
  • Streamlining of the entire process and significant financial savings.

Benefits of the proposed solution expressed in numbers:

  • The implementation of our proposed solution helped the client to reach the required cost reduction - Reduction of errors during accounting from the original 8.47 % to the current 1.64 %. This is a reduction in the error rate by 80.64 %.
  • Reduction in the period required to register goods from approximately 4 days to 24 hours. This represents a reduction of 75 %.
  • Reduction in the number of employees in the mentioned department by 69.2%.
  • Annual costs related to expanded (archiving, shredding…) services are now 2,650,000.00 CZK. This represents a reduction in annual costs of 38.37 %.
  • The new total annual cost saving is therefore 1,650,000.00 CZK. That is 1,200,000.00 CZK more than the initial customer request!

Final summary:

From the above figures and practical benefits, it is clear that all the project objectives were met. Not only that – the minimum required saving of less than half a million CZK was significantly exceeded. The customer was, and still is, very happy. 

Finally, we would like to share the sweetest reward that we received from the customer’s chief executive when he received the results and announced with a smile in his face: 

“That is amazing! I really didn’t expect that!”

Oblast naší působnosti

Jihomoravský kraj

Blansko, Boskovice, Brno, Břeclav, Bučovice, Hodonín, Hustopeče, Ivančice, Kuřim, Kyjov, Mikulov, Moravský Krumlov, Pohořelice, Rosice, Šlapanice, Slavkov u Brna, Tišnov, Veselí nad Moravou, Vyškov, Židlochovice, Znojmo, Adamov, Bzenec, Hrušovany nad Jevišovkou, Ivanovice na Hané, Klobouky u Brna, Letovice, Miroslav, Rousínov, Strážnice, Velká nad Veličkou, Velké Opatovice, Vranov nad Dyjí, Ždánice.

Kraj Vysočina

Bystřice nad Pernštejnem, Havlíčkův Brod, Humpolec, Chotěboř, Jihlava, Moravské Budějovice, Náměšť nad Oslavou, Nové Město na Moravě, Pacov, Pelhřimov, Světlá nad Sázavou, Telč, Třebíč, Velké Meziříčí, Žďár nad Sázavou, Golčův Jeníkov, Hrotovice, Jaroměřice nad Rokytnou, Jemnice, Kamenice nad Lipou, Ledeč nad Sázavou, Počátky, Polná, Přibyslav, Třešť, Velká Bíteš. 

Olomoucký kraj

Hranice, Jeseník, Konice, Lipník nad Bečvou, Litovel, Mohelnice, Olomouc, Prostějov, Přerov, Šternberk, Šumperk, Uničov, Zábřeh, Hanušovice, Hlubočky, Javorník, Kojetín, Moravský Beroun, Němčice nad Hanou, Zlaté Hory.

Pardubický kraj

Česká Třebová, Hlinsko, Holice, Chrudim, Králíky, Lanškroun, Litomyšl, Moravská Třebová, Pardubice, Polička, Přelouč, Svitavy, Ústí nad Orlicí, Vysoké Mýto, Žamberk, Heřmanův Městec, Choceň, Chrast, Chvaletice, Jablonné nad Orlicí, Jevíčko, Lázně Bohdaneč, Letohrad, Nasavrky, Skuteč, Třemošnice. 

Královehradecký kraj

Broumov, Dobruška, Dvůr Králové nad Labem, Hořice, Hradec Králové, Jaroměř, Jičín, Kostelec nad Orlicí, Náchod, Nová Paka, Nové Město nad Metují, Nový Bydžov, Rychnov nad Kněžnou, Trutnov,  Vrchlabí, Červený Kostelec , Česká Skalice, Hostinné, Hronov, Chlumec nad Cidlinou, Kopidlno, Lázně Bělohrad, Nechanice, Opočno, Police nad Metují, Rokytnice v Orlických horách, Smiřice, Sobotka, Svoboda nad Úpou, Teplice nad Metují, Třebechovice pod Orebem, Týniště nad Orlicí, Úpice, Vamberk, Žacléř.