Case Study: Automating Accounts Payable: How the Cleveland Sight Center Achieved Success
There’s no mistaking it: Controller Charlotte Fornal, CPA, MAFIS, is a true believer in the benefits of automated accounts payable (AP). She’s quick to tell you how it has streamlined processing, enhanced visibility, and boosted efficiency at her organization, the Cleveland Sight Center (CSC).
She’s equally quick to underscore the challenges at CSC. AP was completely reliant on paper and manual processing.
The case for automation
“All invoices would come into our mailroom and then be distributed to the appropriate areas,” said Charlotte. “Because we were entirely paper-based, the Accounts Payable Department didn’t know what invoices had arrived and where they were until they were ready to be approved for payment— there was no visibility. In addition, we had to store everything in paper form and documents could easily be lost, destroyed, or misplaced. And we wasted valuable time trying to find the paperwork if we had to research an item.”
Getting approvals for payment also added time to the process. “At CSC, we require two approvals for payment, mine and the CFO’s,” said Charlotte. “In our old manual system, it took longer than it should have to move the paper approvals along and get invoices paid. The bottom line: We had lots of compelling reasons to find an automated solution for payables.”
Charlotte reviewed potential automated AP providers, initially looking at four candidates before narrowing the field to two finalists.
“We had a sharp focus on what we required,” the controller remarked. “We needed an approach that would give us visibility into the invoice processing flow—that was especially important to us. And we wanted to be able to easily integrate the automated solution into our existing systems because we didn’t want to be keying information in more than once. We were focused on gaining efficiencies throughout the systems and streamlining our two-signer process. And it was important to have an automated solution for both the invoice process and payments.”
It was important to have an automated solution for both the invoice process and payments. Our decision to go with KeyTotal Invoice and KeyTotal Pay made sense from every perspective. With the AvidXchange relationship, Key was working with an organization that not only had an established track record but could provide us with both invoice processing and payment automation.
The optimal solution: KeyTotal Invoice® and KeyTotal Pay®
To achieve its objectives, CSC chose KeyTotal Invoice and KeyTotal Pay, each of which is powered by AvidXchange.™
An automated, rule-based routing system to streamline invoice processes and approval workflows, KeyTotal Invoice would make all the information CSC needs readily available, including detailed reports and real-time viewing of invoices. KeyTotal Pay is a completely paperless payment process that reduces the amount of time and money spent on manual payments. Instead of printing and mailing checks, CSC could simply select them to be paid through KeyTotal Pay.
“Our decision to go with KeyTotal Invoice and KeyTotal Pay made sense from every perspective,” said Charlotte. “With the AvidXchange relationship, Key was working with an organization that not only had an established track record but could provide us with both invoice processing and payment automation. And we looked at all that we were already doing with Key—our banking and investments relationships—and viewed the bank as a valuable resource.”
Implementing AP automation
“We started with a comprehensive project plan and clear identification of the steps to be taken and who was responsible for each one,” Charlotte commented. “CSC, AvidXchange, and Key would all meet via a web site on a regularly scheduled basis to work through each step in the installation process.”
Charlotte believes that the team members from Key were especially effective in coordinating the work between AvidXchange and CSC. “They were instrumental in keeping things on track,” she said. “It was a true relationship.”
KeyBank Client Onboarding Manager Tina Freson ensured that the implementation project moved forward and that CSC’s questions and concerns were addressed. KeyTotal Invoice and Pay Solutions Consultant Beth Mellinger also played an active role in the installation, conducting all the product demos for CSC employees.
In every organization, some staff members are reluctant to change the way things are done, a situation that Charlotte recognized and addressed head on. “People can fall in love with paper in an AP system,” she noted. “That’s the hardest thing to deal with. I personally worked with the people I thought would have the hardest time making the adjustment from paper to electronic processing. We reviewed all the benefits in terms of efficiency, insights, and access to information. Those employees are now among the most vocal advocates of automated AP.”
AvidXchange helped CSC work with vendors to help them get comfortable with automated invoices and payments. “Many of our vendors see the utility and benefits of electronic and card payments,” observed Charlotte. “Some still like checks—they worry that it may take longer to get paid. We show them that cutting checks is slower than automated payments and they can get their money faster by making the switch.”
The automated AP payoff
“Automating AP with Key and AvidXchange has been wonderful—we are totally in love with KeyTotal Invoice and KeyTotal Pay,” Charlotte said. “Gaining greater visibility was a high priority for us: We now know where invoices are, who in CSC is holding onto them, and how it affects our financials. With KeyTotal Invoice we have a streamlined web-based structure for our two-approval process, and KeyTotal Pay has helped us achieve a significant reduction in printing and signing checks. Data is uploaded to our accounting system and our invoices are stored electronically, not in filing cabinets. And we have all the storage capacity we need with AvidXchange.”
Key stays actively involved to help CSC benchmark performance and identify further areas of opportunity. “After six months, Lisa Drexler and Kyle Lott provided analytics that showed where we stand compared with other organizations—we’re above average, by the way—and where we’re saving money,” Charlotte mentioned.
“We’ve achieved our goals for automation at the end of six months,” Charlotte adds. “We’re on track to save one full-time equivalent employee and an additional annualized savings of $14,000, largely as a result of a reduction in checks. And our efforts to streamline are spreading throughout the entire organization.”
The benefits of automation are crystal clear in the day-to-day work at CSC. “Before we automated, we were asking lots of questions,” Charlotte said. “Has this invoice been paid? Where is it in this stack of paper? Has the payment cleared? Now I can just look it up.”
Automated AP also helps in other ways. For example, auditors have access to all the data and can examine anything they want in the electronic files. CSC staff doesn’t have to search for invoices and make copies for them. In addition, CSC has an improved ability to earn rebates and discounts from vendors.
CSC has also gained efficiencies in accounts receivable with a KeyBank lockbox. “Collecting and processing payments electronically saves time and makes collection easier for us,” remarked Charlotte. “KeyBank lockbox solutions give us the ability to receive payments directly, so our funds can be deposited as soon as possible.”
Advice for organizations
Charlotte has encouraging advice for organizations that are thinking about switching from manual, paper-based AP to automated systems. “Take the first step to see what automated AP can do for you,” she recommends. “If you need to, start slow and small by automating certain parts of the payables process. However you choose to implement automated AP solutions, you’ll save money and improve efficiency in the long run.”
For more information and assistance in automating accounts payable, contact your Payments Advisor, visit Key.com/payments, or call 1-800-821-2829.