Giving Cash Processing a Real-time Boost

Jabil’s global AP structure streamlined with Serrala FS². Serrala Alevate CashApp is delivering next-level AR processing

For US-based high-tech manufacturer Jabil, AP was spread globally across three shared services centres. With manual processing and no standardisation, it was time for cash processing to get a technology boost. Serrala delivered in a project that TMI is delighted to declare the 2021 Corporate Recognition Awards Best AP solution winner. Serrala also scoops TMI’s 2021 Technology & Innovation Awards for Best AR solution, for its pioneering Alevate CashApp.

Technology & Innovation Awards

Accounts Payable & Receivable Solution

Serrala

Corporate Recognition Awards

Best Accounts Payable Solution

Jabil

AP automation keeps cash moving quickly to vendors

Jabil processes around two million invoices per year in its shared services centres (SSCs) located in Malaysia, Ukraine, and Mexico. Different processes and levels of automation in each were making it difficult to achieve a company-wide view into invoices and outbound supplier payments. A decision was made to digitise and automate its AP processes to ensure better control and visibility of outbound cash flow.

Jabil worked with Serrala to implement the vendor’s SAP Certified FS² AccountsPayable solution. The solution proved to work seamlessly with the company’s existing SAP ECC system. As FS² Accounts Payable is fully integrated with SAP S/4HANA, Jabil’s plans to migrate to this platform soon will transition just as smoothly.

The implementation enabled Jabil to establish a set of standardised, best practice-based, AP automated workflows, with the aim of achieving straight-through processing by intelligently automating AP approval and exception handling workflows. Some 80% of Jabil’s outbound payments are processed through its SSCs. The solution keeps cash moving quickly to suppliers, which is critical in sustaining Jabil’s global manufacturing activities. It also enables the three SSCs to handle rapidly increasing volumes of invoices while maintaining a consistent headcount.

Becoming automated

The project started with analysis of existing processes, enabling FS² AccountsPayable to quickly begin automating all repetitive and non-value-added tasks. Ultimately, ‘touch-free’ processing, from invoice capture through to posting, increases SSC efficiency, providing Jabil with a real-time invoice status view that in turn facilitates rapid identification of exceptions.

Vendor statements of account can now be generated instantly, saving around 2,000 hours spent generating reports, and decreasing the number of duplicate invoices Jabil receives from its vendors. With a greater understanding of invoice exceptions, buyers are able to improve PO information, preventing downstream issues with handling or paying supplier invoices, speeding up processing and driving better supplier relations.

Jabil can now automatically capture and process e-invoices in multiple formats and languages. With the invoice cycle time decreasing as a result, compliance with local invoicing standards is further enabled. It also means the AP team has more time to engage in value-adding work, with process standardisation and end-to-end automation providing more timely and reliable data directly enhancing Jabil’s cash management and forecasting activities. This helps better control cash-out to ensure liquidity doesn’t leave accounts too early – or too late to benefit from cash discounts.

One year on, Jabil has achieved an average of 40% straight-through processing across all SSCs. The target is 50%, or one million invoices per year. Roberto Bayon, Senior Director of AP Shared Services, says of the project: “We were able to quickly redirect vendor invoices from one mailbox to another to balance workloads, and we introduced SmartEye cloud invoice capture to reduce the number of paper-based invoices being processed.”

Mike Slater, Chief Revenue Officer, Serrala, said “with 40% straight-through processing, touchless and automatic processing of invoices, Jabil is a great example of digitising outbound payment processes in which AP processes have made all the difference to treasury”. TMI’s judges fully agree.

Cash application shifts up a gear

Serrala’s new Alevate CashApp leverages the latest cloud technology, built on a microservices architecture, and is aimed at accelerating cash allocation, offering mobile and web access that provides 24/7/365 access and capability.

An integral part of the vendor’s broad invoice-to-cash offering, Alevate CashApp can automatically, reliably and accurately process up to 99% of receivables first thing in the working day. Payment matching rates of more than 90% are achieved by automating cash application, and with captured data feeding automatically into daily cash overviews, manual effort is reduced by up to 80%, removing human error, and enabling allocation of cash in real time.

In implementation terms, Alevate CashApp is an ‘out-of-the box’ solution that can quickly connect to all enterprise and legacy systems via API. It supports all payment types and formats, including bank statements, remittance advices, payment service provider (PSP) settlement files, and lockbox files. It can create a unified processing hub, enabling decentralised AR teams to work in a single environment, facilitating process standardisation and delivery of centralised AR intelligence. By accelerating process cycles, it improves KPIs such as DSO and receivables ageing.

Proven technology

Serrala Alevate CashApp has been piloted with several customers from around the globe, including ABB, Vattenfall, Booking.com, and IBM. Feedback demonstrates its capacity to solve customers’ key AR challenges. One user commented: “We have finally achieved a centralised processing of all incoming payments. And we have been able to realise full transparency into global cash and accounting processes thanks to that”.

Another confirmed: “We were able to automate 98% of the reconciliation of incoming payments.” Additional comments noted that “it is now all a seamless end-to-end process – from retrieving the payment information in any format, converting formats, importing, and matching them to accounts” and that “cash is being applied so much faster so that we have better control”.

Serrala’s Slater told TMI that the Alevate CashApp “is a new, cloud-native solution built to the latest standards that automates cash allocation processes up to 99% and that handles all payment formats”. In connecting accounting to treasury and offering organisations greater visibility and opportunities for deeper insight into their cash, it was a clear-cut decision to present the 2021 award for Best AP Solution to Serrala and its cloud-native Alevate CashApp.