Prior to selecting P2D, New Look had a completely manual invoice management process and no centralised purchase order system. It receives some 70,000 invoices per annum. Historically, paper invoices were received, coded, keyed into its Lawson accounts system and finally sent to appropriate staff for authorisation. 

This caused huge operational challenges: invoices couldn’t be matched to purchase orders; the geographically dispersed nature of the business meant that invoices were sent in both the internal and external mail to staff for approval which was slow and inefficient; paperwork was often delayed or lost which meant suppliers not paid on time. Internal project managers (both employed by New Look and third party contractors) have responsibility for signing off invoices many of whom don’t spend time office based. As the business rapidly expands internationally with floor space growing 20 per cent year on year to total almost three million sq feet today, the company had to improve the invoice management process rather than employ more staff in the finance function.   

The options

New Look considered three options: 1.) Implement an IT solution in-house to scan invoices with appropriate imaging/OCR, workflow and document management support.  This was rejected because of complexity, capital expenditure required and impact on IT staff for ongoing development, integration and maintenance; 2.) Completely outsource the process to a third party provider. Again this was rejected because of high costs and loss of control of certain aspects of the process; 3.) A hybrid solution offered by P2D which was ultimately chosen.

The latter solution is an online hosted electronic hub that receives documents as either data files direct from suppliers or images scanned in by New Look staff using a KODAK i160 scanner. The solution is completely secure and offered New Look the flexibility it was looking for in terms of management and tailoring workflows, without the headache of bringing the IT in-house. All that was required was to carry out some interface work to link P2D to Lawson. 

P2D offers all the benefits of Electronic Document Interchange (EDI) at a fraction of the normal cost. EDI is traditionally used by large companies and is normally too expensive for smaller businesses as it requires one-to-one IT links to be established between both parties. In contrast, P2D allows all suppliers to join at no cost to them as the system is accessed through the Internet. 

The company says that its pricing model is radically different and unique: New Look incurred no upfront capital expenditure to access the P2D system; P2D tailored its systems (at no charge) against a specification drawn up by New Look which outlined key workflows required; only once a six month trail had been successfully completed, has New Look been charged by P2D. A three year contract has been signed for a fixed transaction price per document subject to a minimum of 60,000 invoices; e-invoices are charged at 25p per invoice; scanned images are priced at 40p per invoice; some reports estimate that the variable paper and delivery cost of a traditional invoice is over £1.20 so P2D offers considerable cost savings to both suppliers and New Look; the pricing model is very simple for both New Look and its suppliers to understand and easy for all parties to work out fixed costs over time. 

Innovation

The P2D solution, developed in .Net, acts as a secure electronic exchange for documents from New Look’s supplier. This can include a standard paper invoice as well as back up documentation to be attached to an invoice so New Look staff can see granular detail.  The invoice is then scanned and sent to the hub which stores the original paperwork and extracts the data required for the accounting system. The data is then translated and the original invoice archived for future retrieval and auditing.

The hub employs specially developed rules-based, artificial intelligence OCR software requiring no tuning for supplier invoice formats, and is capable of detailed line item extraction out-of-the-box. In addition, the quality control module is deployed over the Internet allowing New Look to manage the process but without purchasing or maintaining any software and infrastructure.

Future growth