Many corporations' and enterprises' financials include multiple duplicate entries for every transaction. One particular FMCG client of ours faced the time-consuming, repetitive task of duplicating, checking and following all their transactions across three continents and over multiple currencies. An administration cyclone, where one mistake can cause hours of searching for a culprit in so many different places.
Our client, we'll call them GCC, has a distribution centre based in Asia, a head office in Europe and a manufacturer in Africa. All these operations in the Xero accounting platform fall under one umbrella, while each is supposed to be a company and an entity on its own.
On top of that, GCC also faces an invoicing process that looks like this:
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A client orders through the distribution centre in Asia, kick-starting the invoicing process.
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Asia buys from the head office in Europe; Europe needs to create an invoice for Asia.
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Europe buys the shipment from the African factory, and Africa invoices Europe.
The problem is that every transaction asks for duplicates of the same invoice to be raised multiple times, at predetermined margins, in each entity's books. Additionally, all invoices need to be accurate enough to withstand the scrutiny of an audit, and at all times, the entire company's books need to be in good standing.
Our solution is an automated workflow built with cloud-based API-enabled apps (i.e. automatic process linking specific online apps to each other).
The automation is triggered when Asia raises an account payable (AP) invoice to Europe and follows this order:
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Raises account receivable (AR) invoice in Europe for Asia
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Raises account payable (AR) invoice in Europe for Africa
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Raises account receivable (AR) invoice in Africa for Europe
Also:
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all invoices pull the country-specific real-time currency through Make (make.com link) and
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they share an audit log (a shared reference across all transactions).
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CGG can track the status of each invoice, in an audit log, from draft to authorized to paid.
what value does the new automation process hold for our client?
The first benefit is time saved.
When we look for "automatable" tasks, we start by finding areas in your business where a valuable resource spends time doing repetitive tasks that don't require thinking. In other words, "mindless copy and paste work" is where you will find the most benefit in task automation. For instance, if someone takes 15min to complete a transaction and there are two transactions a day, automation could save you 30min a day or a full working day every month.
Clients be warned: Automation is addictive!
Secondly, whilst the time saved because of the automation is noteworthy, the most significant value of this project is the increased reporting accuracy.
In any manual process, there is a high risk of human error. For example, wrong amounts entered, transactions misplaced or accidentally overlooked. However, with automated workflows, there is a negligible risk of mistakes. Numbers match, transactions don't go missing, and you have a traceable, complete and accurate log.
any future alterations?
You can constantly improve: Potential time-savings, allocating vital or expensive resources to high-value tasks, and de-risking data integrity, to name a few. In this instance, we could have also added:
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Automated email reports and notifications each time a transaction happens - however since a single employee handles GCC's invoicing process, this extra step was unnecessary.
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Loading source documents (an invoice pdf) as evidence of all Xero transactions, ensuring a fuss-free audit for any of their entities.
