Optimised invoice workflow streamlines approval process
Case study: Rhomberg Bau GmbH (10/2019)
Rhomberg Bau is an economically independent subsidiary of the international Rhomberg Group, which is active in the fields of rail, construction and resources. By implementing a digitised, standardised process for incoming invoices, the company achieved a faster throughput rate when approving invoices, with associated financial benefits. Simultaneously, the company also ensured compliance with the requirements for invoices laid out in local VAT law.
The Rhomberg Group – a family company first founded in 1886 and now in its fourth generation – is a full service provider for the construction industry, offering solutions and services for all stages of the life cycles of public and private buildings. Rhomberg Bau’s service spectrum ranges from planning and project development to private home building, structural and civil engineering for the public sector and commercial enterprises, conversion and renovation, and residential and commercial property management. Rhomberg Bau therefore operates as both a sole and general contractor realising a wide range of turnkey projects.
The accounting department, acting as a service provider within the Rhomberg Group, coordinates the invoicing workflow for over 60 companies. It receives around 4,500 invoices per month, for which the approval process involves not just this department but also construction managers, purchasing officers, project managers, executives and others.
Wanted: An invoice workflow to make invoice validation more efficient
The starting assumption for the project was a total annual volume of 40,000 invoices. The goal of the invoice workflow optimisation project was to replace the existing inefficient, paper-based approval process with a company-wide workflow which would process everything centrally within the accounting department, as well as securely and accurately documenting all further processing and archiving work.
“Before the switch, incoming invoices reached each administrator on paper. Because they were processed in many different places, it would sometimes take two to three weeks for an invoice to be entered into our accounts. This was one of our main reasons for the complete switchover,” explained Irmgard Mayerhofer, Head of Accounting at Rhomberg Bau GmbH.
“It would sometimes take two to three weeks for an invoice to be entered into our accounts.”
“Today, each invoice should have a cost centre, specified by each employee during the order phase. This makes it easier for us in Accounting to assign the invoices. We also designed the workflow so that invoices now go directly to Accounting, where they are scanned and then handed over for approval in digital format. In order to track and limit the monthly costs, it was also essential to capture all invoices immediately within the department.” Another goal was to document every stage of processing. The digitised workflow documents exactly where an invoice is currently located, who is working on it, which approval process it has gone through and who is responsible for the next step.
The digitised workflow documents exactly where an invoice is currently located, who is working on it, which approval process it has gone through and who is responsible for the next step.
“As well as having a better overview of the process, transparency and accurate documentation were other important factors,” said Mayerhofer. “By fully documenting the history of each invoice and making sure two people check each one, our approval process has become more secure. And by integrating emails into the invoicing workflow, we have increased efficiency and saved money.”
Digital document capture and process management for System i
Rhomberg uses the Kendox workflow system “task-><-link”, a solution based on IBM System i (AS/400) and developed for the construction industry, in order to digitise and automate the invoice processing workflow. Paper-based invoices are scanned and emails are sent to a central mailbox.
With the help of the integrated solution “smart Fix” from Insider Technologies, document data is extracted, and the invoices’ header and position data is read and validated. The invoice details are also checked during extraction. The digitised documents are then forwarded within the "task-><-link" workflow to the assigned accountant for approval and bookkeeping purposes. The accountant will correct or delete items if required, in which case the documents must then be sent back to the supplier for correction. Since the workflow helps to automate the entire process, such communication with the supplier is significantly simpler than before. After the invoice is approved and the accounting department completes its final checks, the invoice data is submitted to the accounting system for final bookkeeping and payment.
Goodbye to paper
“From an IT perspective, implementing our document workflow solution was actually no trouble at all,” said project lead Stefan Greussing. “The main difficulty to start with was that invoices needed to be approved on-screen in digital format, so our staff no longer had the physical paper invoice to write on. That meant it was important to define user roles right at the start – to specify exactly how the invoice needed to move through the company. This included questions like: Who initially approves the invoice? Where should we set the limits for each line item? At what point do we need another person to check and approve the invoice?”
“The main difficulty to start with was that invoices needed to be approved on-screen in digital format, so our staff no longer had the physical paper invoice to write on.”
Together with Rhomberg Bau’s project managers, the Kendox team defined a manageable number of basic functions for the various tasks performed by the departments involved in the invoice approval and verification process. The base system was fully implemented within six months.
“The support from our project partner, TQS – which has been a part of Kendox since February 2018 – is great. We get exactly the technical and specialist support we need to map out our processes. The people responsible for the workflow at Kendox worked closely with our head of accounting right from the start, as well as the other relevant departments,” said Gruessing. “And every time we had new requests or wanted new additions, we got the support we needed.”
Expanding the integration
Rhomberg Bau is currently acquiring additional interfaces to optimise its invoice processing workflow. Until now, the workflow has connected to the “InfoStore” archiving system (using the LDOX user interface), the FA and ERP systems from BDS, and the software solution “iTWO”. This latter solution is a calculation program designed for the construction industry which is used within the department to track costs. The integration with iTWO creates a connection to the financial accounting system via the workflow system. Since the workflow supports communication between the two solutions, this improves the efficiency of the verification process. Usually in the construction industry, partial invoices are issued for individual sections of the construction, with payments made on the basis thereof.
“Colleagues tracking invoices with iTWO currently need to enter data from partial invoices separately within this tool. The next step of the project is to automatically hand over this data from the workflow to iTWO. iTWO is where the construction manager calculates and processes the invoice details. These are added, for example, to the materials needed for the final calculation. The resulting data is then passed back from iTWO into the workflow for approval by the construction manager. This ensures that the invoice is not accidentally processed twice by different systems,” explained Greussing.
“Workflows for processing invoices or digitising other documents are living systems requiring constant ongoing development work.”
Workflows for processing invoices or digitising other documents are living systems requiring constant ongoing development work,” added Kendox project manager Alexander Suppan. “At Kendox, the workflows and integrations with systems like BDS are constantly being expanded to include new functions and meet the latest legal requirements.”
Outlook: Commitment to further areas
The next stage of expansion is to implement a central workflow for outgoing invoices. The accounting departments’ controls play an equally important role here – even before any invoice leaves the company’s system. It is essential for the invoicing process to be standardised and automated. This will not only improve the security and transparency of all Rhomberg Bau’s invoicing processes: by automating routine processes, it will also save valuable time and resources.