BLOG/NEWS

The Importance of Cement and Tomatoes

The Importance of Cement and Tomatoes

When it comes to processing documents, the vast majority of businesses follow the same drill.

They use header level information to match the minimum information needed to complete the process – whether it be invoices or other documents. For some basic processes, this level of detail is fine. But as companies seek more digitisation they want to be able to access line level data to optimise their operations.

For example, a construction firm receives invoices from suppliers. Many of the purchase orders they issue are blanket documents, ordering, say, building materials. At the end of the month, accounts pick up the invoice. The PO matches the invoice amount in their accounting system, so they pass it through. The process is semi-automated, but a human is still involved.

This is a missed opportunity. An invoice might have 30 separate lines. The useful and detailed data, stored at line level, is lost. This denies decision-makers information that inevitably helps to optimise the business. As one prospect told me,

“I’m a six million pound construction business but I don’t know how much cement I buy.”

Without line level data, businesses are flying blind without a clear picture of their costs.

So that’s the cement. What about the tomatoes? Detail is also crucial in the hospitality business. We recently spoke with one of the world’s largest hotel chains, who order a huge volume of foodstuffs. They’re unable to issue POs for specific quantities of ingredients, instead sending POs for fruit and veg in £500 or £1000 tranches. They said,

We’re a global hotel chain. We turn over billions. But we don’t know how many tomatoes we buy.”

So far we’ve focused on invoices, but intelligent data capture also relates to customers. Take sales orders in the pharmacy business. If they contain life-saving drugs they cannot be delayed, which means that companies have to assume all orders are lifesaving – just in case. To lower this cost, document processing should be automated, processing in minutes, not hours. It’s a perfect use case for Cloudtrade’s software, which enables clients to customise our software's business rules.

Here's an in-depth case study on orders and the multinational construction manufacturer Hilti, from our partner OpenECX.

Get the full Hilti case study here

 

Our tech works at the line level, giving CFOs more visibility and control. Digitising data on the backend enables companies to optimise their purchasing behaviour, obtaining better pricing and diversifying risk to avoid over-exposure to certain counter parties. Line level data also offers protection against fraud by making it easier to spot fraudulent invoices. According to research from Santander Business, as much as half of UK firms are vulnerable to invoice fraud, and it cost them £93 million in 2018.

Whether it’s a global hotel group running an ERP system, or a mid-sized construction firm using a basic cloud-based accounting platform, data granularity promises operational and financial efficiencies. But capturing line level information isn’t just about data automation, it’s about intelligent data automation.

If you want to be able to tell your cement from your tomatoes, get in touch and we’ll organise a free test of some your business documents to demonstrate the value in automation and business rules for your situation. With over 7,000 organisations live, we’ll likely have comparable best practice too.

Demonstration?