Reaping the Benefits of E-Invoicing
SSON: Can you give us a quick introduction to your organization and perhaps explain the work that you are currently doing within ‘Total?’
Holger Hannover: TOTAL is ranked No. 4 within the major oil and gas producers worldwide. TOTAL Germany is an affiliate from the TOTAL SA company with their headquarters in Paris. It is organized into the following sales channels; service stations with approximately 1000 service stations; commercial sales with 23 sales offices that sells heating oil and fuel products to B2C and B2B customers; specialties which include aviation, lubricants, gas and specialty products like paraffin and waxes. TOTAL Germany also has a refinery in Leuna which is considered to be the most modern refinery in Europe.
I am responsible for managing the IT Solutions and Organization within the TOTAL Germany Commercial Sales Department.
SSON: You are currently using Itella Information to process your invoices - can you please explain how you received your invoices before using Itella’s services? Can you also give us an overview of how you actually receive them today and what your volumes of purchase invoices and E-invoices are?
HH: Before the implementation of Itella workflow, the invoices from various suppliers were sent to the 23 sales offices all over Germany. In these 23 sales offices, an account was assigned to the invoices where they were checked and authorized - as the organization requires authorization from the regional director. The invoices are physically sent to the main location within the region where the manager is located. After each invoice has been authorized, the invoices are sent to the finance department in Berlin to be entered into our SAP system to make payment to the supplier.
Previously, invoices were sent via post twice, with a postage time of 2 to 5 days. We were unable to track the invoices or the time it took to process them, not to mention, the loss of invoices due to this method. The availability of personnel for invoice approvals also proved to be difficult, in times of sick leave, holidays etc.
This was a very complicated, labor intensive and time consuming process.
Following the implementation of the Itella workflow solution we have eliminated the costs of invoice posting and delays; prevented the loss and doubling up of invoices; and more importantly, increased efficiency. This solution has proved to be reliable in tracking the invoices from start to finish, from the authorization process to overdue invoices.
SSON: What benefits have you gained from using Itella Information to process Total's Invoices?
HH: The implementation of Itella workflow and the scanning center were driven by the problems described previously. The outsourced scanning is the central point for the invoices to be sent. Once they are scanned, we are able to track the invoices from that moment on. Since, the invoices are available in an electronic form, we can use the invoices in the Itella workflow tool. Also, the paper invoices that are sent to a sales office can be scanned locally and entered into the process.
This Itella workflow tool has enabled us to track the invoices and send them to the appropriate personnel. As this tool is internet based, independent from fixed locations, the managers can check and authorize the invoices on their work PCs, laptops, home PCs or even with their PDAs. This has proved to be extremely flexibile and convenient.
The process is now one centralized tool. The system supports mails for overdue activities, tracks and traces all invoices and manages the authorization profiles for invoices.
Added to this, the implementation of the new interface with our SAP system, has allowed payments to be made quicker. With this integrated process we have gained accuracy and speed.
SSON: Okay, so the process is easier?
HH: The process is now much easier, more manageable and we are now able to synchronize the accounting throughout the different regions. As a result we have harmonized the processing and the accounting of invoices; which allows us to compare the different activities in different regions as the processes are now the same.
We are able to use a standardized workflow solution that fit our requirements from the beginning. With small adjustments and with adding the interface to our SAP system we can now implement this solution architecture more rapidly at competitive costs. The suppliers just need to be informed that they now have to send their invoices to Itella’s scanning center. The change management process was also simple.
SSON: How has it changed your way of operating today compared to before?
HH: By implementing this new tool, the process has become more transparent, more readily accessible, and increased efficiency and flexibility. It also has accelerated workflow, resulting in less outstanding invoices and more accurate payment times.
SSON: How did you manage the transition period from paper to electronic? What was your strategy?
HH: Although we still receive invoices on paper from a large number of our suppliers, we have successfully converted 98 % of our suppliers to send their invoices on paper to the scanning center. After the invoices are scanned, it proceeds to an internet automated process. The TOTAL Germany commercial sales department is prepared to process electronic invoices as soon as the suppliers are ready to offer them.
The next step is to have the supplier send their invoices directly to Itella electronically. By then we already have our process and tools in place and we do not require further changes. There is no difference between a paper-based or electronic invoice. We are awaiting results from Itella’s first fully electronic invoices implementation experience, before proceeding to our next stage.
SSON: Were your challenges mainly technical or people orientated?
HH: Both. We had to convince our colleagues and our organization that the new Itella workflow system supported our IT tools and process. But the convincing part was easy, because they understood the benefits and convenience of this solution.
On the technical side, we relied on the internet-based workflow architecture. The main technical challenge was to implement the interface into our SAP system. Itella supported us with a structure and we were able to implement this with ease, by organizing a quick meeting on the security requirements of TOTAL. We are now extremely satisfied with the solution we have in our hands.
SSON: What would make the E-invoicing process even easier in your opinion?
HH: We have been working with Itella on improving the solution. The main areas for improvement are in the monitoring and controlling areas of the process. Unfortunately some invoices were sent to the wrong people or were assigned to the wrong accounts by the users. We would like to improve this by adding additional technical checks and monitoring.
Looking back on the implementation, we had 33 points of improvement of errors. All have been resolved in a timely manner together with TOTAL and Itella. But this only refers to approximately 5 % of functionality. To sum up our experience: our finance department states that they have not used a better workflow system. This is quite a compliment.
I believe strongly that we are moving towards an electronic invoice exchange age with our suppliers. The suppliers will see the advantages and they will adapt and follow this trend. But it will be a further 3 to 5 years until we see a significant number of suppliers using electronic invoices. I am confident that this is the future, as we have set the precedence already and are ready to follow this trend together with our partner Itella.