AP Recovery & Savings
Case Study - Manufacturing Company
- Exceeded the $2M target in less than 9 months
- In addition to this client's previously-negotiated $250k in annual parcel spending reductions, i5 Services renegotiated an additional $675k, totaling $925k in improvements
- Prevented over $7,000 per month in potential duplicate payments
- Provided corporate-wide access to data previously unavailable, including dashboard access that provided summary-to-details in 3 mouse clicks or less
- Established achievable recovery, savings, and improvement targets in excess of 1% of annual revenues
A $600 million North American manufacturer/distributor of construction materials with multiple divisions across the country engaged i5 Services to review their historical transactions to recover funds, to identify savings in purchasing contracts, and to implement prevention and improvement initiatives.
The initial analysis of one $250 million division netted hundreds of thousands of dollars in recoveries from statement audits, duplicate payments, and sales tax and freight audits for overpayments. Recoveries lead to implementing monitors that identified issues as they occurred in their daily transaction stream. During the analysis phase, i5 Services generated information showing how the client could improve their efficiency, saving significant revenue in Terms, Freight, and Purchasing.
In another division, the client negotiated over $250,000 in annual parcel savings. When i5 Services renegotiated on their behalf, they received an additional $675,000, resulting in a combined parcel savings of over $925,000. Total division savings exceeded $1 million.
The combined value to the client is already over $1.5 M in just two of four main divisions. i5 Services will surpass 1% in annual revenues for this company in less than 30 months.
- Lack of visibility into processing issues and revenue leakage due to errors and inefficiencies
- Inefficient processing and management oversights
- Sales tax overpayments made on equipment in different states
- Hundreds of daily erroneous transactions overwhelmed the payables organization
- Manual management review and approval invoicing process bottlenecked processing and generated most of their duplicate payments
- Lack of visibility and slow reporting prevented correcting transactional errors and improving processes
- Complexity of contractual agreements
- Gathered historical and daily data from the accounting system
- Performed analysis that identified multiple areas where opportunities existed for savings and improvement
- Reviewed and documented existing processes
- Employed partners with specialized expertise to generate maximum benefits
- Proposed methods and tools to capitalize on existing opportunities
- Analysis and recovery services provided on contingency
- Proprietary SaaS (Software-as-a-Service) technology implemented with monthly fees based on measurable ROI
- Implemented technology to catch pre-payment errors within the transaction stream
- Provided management with web-based dashboard reporting for visibility into daily issues and errors
- Identified hundreds of thousands of dollars in duplicate payments and sales tax overpayments
- Recovered over $100,000 in duplicate payments and over $200,000 in sales tax overpayments within 6 months of starting reviews
- Minimized duplicate payments going forward with monitoring software, flagging errors and potential duplicate payments daily. Errors were caught and corrected before checks left facilities resulting in prevention of over $7,000 per month in potential duplicate payments
- Dashboard reporting provided broad data visibility to transaction detail with their associated images in 3 mouse clicks or less. This empowered managers to take corrective actions during their engagement with i5 Services
- Corrections implemented on equipment leases controlled sales tax over-payments by hundreds of thousands annually
- Analysis of accounting data identified additional opportunities in process improvements
- Increased savings by $675,000 in one spend category in just one division of the company
For more information on this case study or offerings from i5 Services, please contact Alan Davis using the contact us page or call 800-560-2857.