Case Newsec PAM Norway: A journey to an automated invoice process
Newsec PAM Norway successfully created an automated invoice process with OpusCapita services. They turned a high PDF and paper invoice rate into receiving 95% of the purchase invoices as e-invoices. In addition, they implemented a rule-based approval workflow together with rule-based pre-codings to set default values for their 400 invoice approvers to check in a user-friendly solution. As a result, they gained significant cost savings, improved efficiency, and improved quality.
Newsec Property Asset Management Norway (later Newsec PAM Norway) manages around 570 properties for ~130 clients. 90% of purchase invoices that Newsec PAM Norway receives are for these properties, managed on behalf of the clients that often control the purchase process and each come with their different requirements. “That sets the frame and scope for what can be done with the invoice handling process, as well,” says Tore Hestnes, Process Owner at Newsec PAM Norway.
A labor-demanding starting point
Back in 2018, Newsec was set off to automate their invoice process in Norway, Sweden, and Finland. “For Newsec PAM Norway, 60% of received invoices are recurring, including service charges such as electricity, cleaning, waste, and service control, which holds a high potential for automation,” Hestnes remarks. Further, there is constant onboarding and offboarding of properties and clients, adding another layer to the process.
Recurring invoices hold a high potential for automation.
As a starting point, Newsec PAM Norway received only 30% of their purchase invoices as e-invoices. The remaining were about 35% received as PDFs and 35% as paper. “We had three full-time employees dedicated to the accounts payable. Invoices needed to be scanned before distribution to 400 approvers involved in the P2P process,” Hestnes describes.
The invoice process also involved 4000 suppliers, leaving no possibility for pre-coding. The only automation used was a sequential approval flow, which made the process rather long.
From 30% to 95% electronic invoices
One of the goals for the new automated invoice process for Newsec PAM Norway was to raise the percentage of e-invoices as high as possible.
“E-invoicing became an absolute requirement for all frame agreement suppliers,” Hestnes remembers back: “We actively contacted suppliers that sent us PDF and paper invoices and encouraged them to start e-invoicing. We chose not to digitize PDF and paper invoices, in the end, because then you really feel the effort of handling those and it becomes easier to actually request an e-invoice.”
As a result, the e-invoice rate at Newsec PAM Norway increased from 30% to over 80% within a year, and further up to 95% today. “We’re quite happy with 95%,” Hestnes smiles. “Now we look into further optimization.”
“We also had a lot of different solutions in the process; one for invoice receiving, one for digitalization, etc. That made it difficult to make any changes. With our new automated invoice process, we have everything from invoice receiving to postings in one, flexible cloud solution, so it’s easier.”
Automated invoice process with rule-based pre-codings
With the implementation of OpusCapita Invoice Automation, Newsec PAM Norway created a basis for their automated invoice process with a rule-based approval workflow.
99% of all received invoices are now distributed for approval based on pre-set rules. “We have 400 approvers involved in the process within all the ~570 properties we have. The goal is to make the approvals easy for them,” Hestnes emphasizes.
99% of invoices are distributed for approval based on rules.
Further, 42% of the received invoices are pre-coded, that is, their information such as VAT, GL account, postings, etc. are set to proposed default values based on the rules. “The percentage varies from 10% to 90% depending on what type of legal entity is in question,” Hestnes explains: “For example, a holding company with fixed fees gets to 90% but a property with several projects can still be down to 10%”.
Efficiency and user-friendliness
Newsec PAM Norway now has an end-user-friendly AP automation solution with a focus on a standardized process. “We’re now able to help our 400 invoice approvers with a pre-set posting line and a guided approval process that works in laptop, pad, and mobile phone,” says Hestnes.
The new automated invoice process has also raised the efficiency in the accounts payable to a whole new level. The AP team went from 3 full-time employees handling 23 000 invoices each, to 0,7 accounts payable professional handling all the 70 000 invoices. This has allowed the employees to focus on more meaningful tasks and also to move up the career ladder within the company.
Next steps: Contract matching, AI, and more
Further possibilities to automate the invoice process include PO matching, contract matching and budget matching, as well as integrating into a third-party AI (artificial intelligence) tool.
In fact, Newsec Finland already processes 20 – 25% of invoices through contract matching. “They have a different approach. Even if they have the same solution, they use a lot of fully touchless automation without manual approvals,” Hestnes reflects. Evidently, OpusCapita’s solution has allowed the different Newsec country divisions to adapt their use to the country-specific needs. “In the future, we might look into PO matching with our ERP, and also contract matching for selected costs and trusted suppliers, but we might also get that benefit through artificial intelligence,” Hestnes says.
The goal is an even better end user experience and higher quality.
Artificial intelligence will expand the automated processing to also non-recurring and complex invoices. The goal is an even better end user experience as more invoices can be pre-coded, but it’ll also improve the quality. “When coding an invoice manually, you might use different dimension values every time because you don’t remember what you used before,” Hestnes remarks.
“We are also looking to reduce the number of suppliers because even if you have an automated invoice solution, each supplier may deliver e-invoices differently even if it should be a standardized format.” Standardizing purchases will also make it easier to re-use the automation rules and inherit them between the companies.
Keeping it simple
Newsec PAM Norway’s success with the new automated invoice process has a lot to do with not going too big, too fast. “It’s to try not to cover everything, because then it’s too complex and you gain nothing,” Hestnes says. By maximizing the e-invoice rate, automating approval flows, and leveraging rule-based pre-coding, Newsec PAM Norway has achieved significant efficiency gains, reduced manual efforts, and improved accuracy.
Now, their automated invoice process serves as a prime example of how organizations can optimize their accounts payable and set ground for further improvement.
Next-generation AP automation
Process your invoices automatically by adopting dynamic technology boosted with artificial intelligence.
The overpower of next-gen AP automation software
True SaaS integrates incredibly smoothly and gives the AP team the power of…
Local webinars: Contract matching in AP automation
Aug 2023 – We’re hosting two free, local webinars, one in Swedish and…
Replace manual invoice handling with AI-boosted AP automation for lower transaction costs and…
Local webinars: How to maximize your AP automation level
Feb 2023 – We’re hosting two free, local webinars, in Swedish and in…
Receive e-invoices and couple them with invoice scanning from PDFs and paper into…
Case Peab: Online procurement & Peppol orders
Purchasing both in-office and out on the construction sites in an internal webshop,…
Unlocking accounts payable efficiency with invoice automation
Turning the spaghetti of systems and papers to a well-planned AP process and…
4 steps to digitalizing your AP and AR process
Digitalizing the AP and AR process doesn’t happen with old technology. Go in…
Case Luleå University of Technology: Invoice portal to maximize e-invoice …
The university offers their suppliers multiple e-invoicing options, including Peppol and online invoice…
Structured PDF invoice – An AP fast lane?
A structured PDF invoice, or PDFx, is a great intermediate step for the…