Cereal manufacturer Kellogg’s aims to eliminate 80 per cent of paper invoices in the next 18 months by installing e-invoicing systems across its UK and European operations.
The firm processes more than 100,000 invoices a year from 3,000 suppliers, and expects to simplify accounting processes and cut paper costs when the system goes live this week.
The system, from vendor OB10, works by getting suppliers sign up to OB10’s service, which connects to their accounting systems and allows them to send invoices as a data file.
OB10 processes invoices at a cost per transaction, without Kellogg’s or its suppliers having to install hardware or software.
John Gregory, director of Kellogg’s shared services centre, says the company will initially send electronic invoices to larger suppliers, before moving onto smaller firms at the end of 2007.
‘We think there will be big benefits in automating invoicing, including helping to pay suppliers on time, measure accounts payable and receivable more efficiently and to better understand where our cash is,’ he said.
‘But there will also be savings in administration and productivity, and our ultimate aim is the 100 per cent elimination of paper invoices.’
The elimination of manual paper processes will speed up invoice processing and remove the cost and delays associated with posting invoices.
The e-invoicing system integrates with the company’s existing enterprise resource planning software and workflow systems.
Nigel Montgomery, research director at analyst AMR, says getting uniform information from all suppliers will be the biggest challenge for Kellogg’s.
‘But it has the brand power to ensure that suppliers wanting to work with it must get in line,’ he said. ‘This is important because many manufacturers now have a large variety of suppliers.
‘E-invoicing will ensure that Kellogg’s can speed up processes and expand products without having to take on extra staff.’
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