Honda Logistics Turns AP Into a Profit Center with Document Automation
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CASE STUDY Honda Logistics turns AP into a profit center with document automation Based in Ohio, Honda Logistics North America, Inc. was founded in 2013 and operates nine separate companies under Honda Logistics, Inc. In total, the organization is comprised of Honda Logistics North America, Midwest Express, One World Logistics, One Solution Logistics, South East Express, New South Express, Promex, Komyo de Mexico and Komyo Logistics, most of which were established long before 2013. Honda Logistics is the central service company for these nine entities that support Honda Manufacturing. The company’s line of business includes providing special warehousing, storage services, freight, sub-assembly, transportation, logistics and parts for Honda. TUNGSTEN NETWORK CHALLENGE Brad Gerritsen, Accounts Payable SOLUTION Coordinator, manages the Accounts In October 2015, Tungsten Network successfully Payable department for Honda Logistics’ implemented Ephesoft for advanced document capture seven companies. He has been in the and Tungsten Network Workflow tool for routing, approvals industry for 21 years, spending the last 11 and integration into JD Edwards. Honda Logistics North years in Finance under Midwest Express America processes approximately 120,000 invoices and now Honda Logistics. Honda Logistics each year. Gerritsen trained all new vendors to send in processes 120,000 invoices per year, which an electronic PDF format, but the vendor paper invoices were all previously handled manually by a dominate because of One World Logistics brokerage requires team of people, requiring lots of time and a paper process. The brokerage, which contracts out freight data entry into their JD Edwards system. services, processes approximately 2,000 to 2,500 invoices Gerritsen knew there was a better and per week, often with multiple backup documents. Once the faster way to process invoices, so he began invoices arrive, they are barcoded and scanned using Fujitsu researching invoice automation at industry scanners. The scanner separates the invoices by barcode to conferences. tell the system which company it relates to and then goes After proving that a streamlined automation to the list of authorized approvers, who all use a centralized solution was the right path, the Manager general ledger (GL) codes. of Finance gave Gerritsen the approval In Ephesoft, the platform uses its patented, machine to spearhead the automation project learning technology to read and determine that the invoice is and move forward. Gerritsen researched from a valid vendor based on a vendor number. Every invoice and vetted three different companies is validated internally as part of their thorough process and that would satisfy the requirements of is then sent into Tungsten Network Workflow to an approver handling all seven companies’ invoices who assigns a GL code, authorizes the payment and finally and the associated workflow and approval is sent to JD Edwards to be paid. Once the payment is made, routing into JD Edwards. Tungsten JD Edwards sends the payment data back into Workflow Network was a clear winner by meeting all to complete the cycle. Every night, updates or information the prerequisites using a combination of from tables are automatically made from JD Edwards back Ephesoft Transact and Tungsten Network into Workflow. This ensures auditors have all the remittance Workflow platforms. “We needed a system data easily accessible. “The integration between all the that could manage all seven companies’ systems is streamlined and offers us tremendous efficiency,” invoices separately as well as having a explained Gerritsen. clear authorization matrix for approvals. Tungsten Network offered us the best solution for a complex business,” said Gerritsen. CUSTOMER ORGANIZATION: Honda Logistics, RESULTS North America • AP department has transformed into a Profit Center with SUA SECTOR: Transportation & payments Logistics COUNTRY: Operates worldwide, • Cashflow visibility allowing deep discounts and cash management Headquartered in Germany • Ability to track 120,000 invoices per year with 2 staff • Ageing process has decreased • Fast, seamless audits and reporting • Job satisfaction with strategic decision-making • Improved vendor relations RESULTS make better decisions. We now to using this SUA payment have increased flexibility with method to help grow his AP “The solution has freed up our vendor payments. Additionally, Profit Center. “Now that I have time by transforming data entry with visibility into our cashflow, time, I can focus my efforts into roles into more managerial we can work with vendors transitioning the AP department roles. We can now quickly on deep discounts,” noted into a Profit Center, so we are answer vendor questions, track Gerritsen. With the insight from making a big impact and bringing invoices and monitor cashflow. Ephesoft and Workflow, month in revenue for the company,” We have visibility into all of our end reporting became easier and stated Gerritsen. Larger documents, so when auditors faster with access to their data. companies are trending towards come, they have immediate making departments like AP and access to all information, which One of the most exciting results Purchasing into profit centers saves us an entire week’s is that Gerritsen is using his thanks to their buying power worth of work,” said Gerritsen. freed-up time to turn the volume. “Productivity has increased AP department into a Profit because we don’t have to track Center. Due to visibility and FUTURE down invoices and open file efficiency, the AP department Honda Logistics North America cabinets. And, I have more time can strategically save money has already started the move to to make strategic decisions.” by negotiating deep discounts, but more importantly, they upgrade their Ephesoft platform, Further, he explained how there are driving revenue through which is expected to increase are no more lost invoices. Other rebates. With Single-Use productivity and visibility even benefits are that the ageing Account (SUA) payments, more. Gerritsen explained that process has gotten better and no Honda Logistics receives a they have been live for two years invoices go unpaid longer than percentage of the payment now with proven success and 90 days, where as previously back in the form of a rebate, now they will be able to continue they often went longer because similar to how some credit cards growing. The significant time tracking was so difficult. Now, work. A SUA is a card-based savings, insight into cashflow invoices are validated within payment solution that acts like and the transformation of AP to 48 hours, which make more a check by providing a 16-digit a Profit Center will all contribute accurate accruals possible. virtual account number for each the success of Honda Logistics Once the invoice goes through payment, which allows you to set North America and its multiple Ephesoft, Gerritsen described each SUA with a credit limit that companies. how the team has access to matches the specific payment manage the check flow of about amount. $2.3 million per week. “The platform gave us a clear picture Gerritsen is actively trying to of our cashflow so we could get more vendors to convert www.tungsten-network.com © Copyright 2020 Tungsten Corporation.