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Speeding the Invoice Flow at Thames Water For the UK's largest water company, an investment in invoice management automation has transformed the accounts payable process. Today 65% of the 80,000 invoices received annually are processed automatically.

Speeding the Invoice Flow at Thames Water

Increasing automation drives down costs, reduces errors and improves efficiency. For Thames Water, an investment in invoice management automation from Bottomline Technologies has transformed the accounts payable process. Today 65% of the 80,000 invoices received annually are processed automatically, with no manual intervention.

With this level of automation, the company’s accounts payable staff are now released to spend more time resolving payment issues and working to continually improve compliance. Leveraging detailed reports from Bottomline, Thames Water is highlighting issues with supplier compliance and building stronger supplier relationships.

As the UK’s largest water company, Thames Water services 14 million customers – supplying 2,600 litres of tap water per day to 8.8 million customers across London and the Thames Valley and treating 4 billion litres of sewage daily. In addition to meeting increasingly tough demands from regulator OfWAT for both renewing infrastructure and minimising customer price increases, Thames Water is committed to operating as a ‘best in class’ service provider. The company has a strong focus on improving efficiency and driving down costs – and a key component of this strategy is ensuring smooth transactions throughout the supply chain, from orders through to payment.

The scale and volume of administration across the utilities industries are challenging. Bottomline process 80,000 invoices each year and the company is pushing hard to minimise the amount of manual intervention required to process these invoices. Underpinning this vision was the selection of the invoice management service from Bottomline Technologies. The end to end solution, encompassing both invoice capture and invoice processing, manages all Thames Water invoices – which are received via both post and email. Invoices are scanned, automatically validated and matched using Thames Water’s processing rules, purchase order (PO) data and vendor lists. Any documents failing to meet these checks are automatically routed to the accounts payable team via the invoice management workflow solution.

Business Improvement Analyst Debby Roberts said that before introducing the new scanning system, Thames Water had 22 dedicated payment agents. At any one time up to 6,000 invoices were under review and required assessment to be processed. “The entire accounts payable process was incredibly labour intensive,” she said.

The invoice processing service from Bottomline delivered immediate benefits. Roberts said, “From day one, 20% of the invoices could be processed without any input from payment agents, enabling Thames Water to reduce manual handling costs by 50%.”

Collaborative approach

Thames Water and Bottomline have worked together to continually refine the accounts payable process. Today 65% of invoices are processed without any manual intervention; and the company pays 92% of invoices within payment terms.

“A straight-through processing (STP) rate of 65% is an impressive achievement,” said Roberts. “Furthermore, with far lower volumes of invoices requiring any manual intervention, Thames Water has been able to focus heavily on making further improvements in the accounts payable process, including close collaboration with suppliers to improve compliance.”

Now the eight payments agents have just 75 invoices outstanding at any time. Issues such as incorrect or missing purchase order numbers will result in invoices being pushed back to suppliers for correction, while problems such as orders being set up differently from the way the invoice has been presented can be checked internally, adjusted and pushed through to the ERP system for payment.

The significant improvement in straight-through processing (STP) rates has been achieved in a number of ways. The introduction of SAP three years ago has enabled Thames Water to impose greater control over requisitioning processes, improving compliance rates. In addition, Bottomline has made changes to processes, most notably to address Thames Water’s duplicate invoice problem.

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