Avnet Case Study

SITUATION

Avnet’s North American Financial Operations shared services center processes a high volume of receivables transactions and is tasked with continuously looking for ways to increase efficiency and reduce per item transaction processing cost.

GOAL

Due to the nature of the technology distribution supply chain, insuring accurate and timely posting of cash is critical to maintaining up-to-date credit lines and customer satisfaction. Therefore, Avnet’s primary objective was to improve the productivity and efficiency of applying approximately 200,000 checks annually to their SAP environment. They further intended to impact operating costs by reducing bank keystroke fees, shortening cash application time frames and improving data quality.

SOLUTION

OPEN SCAN^® Corporate A/R Remittance Processing Automation Software Solution

ABOUT AVNET

Avnet, Inc. (NYSE:AVT), a Fortune 500 company, is one of the largest distributors of electronic components, computer products and embedded technology in the world. Avnet accelerates its partners’ success by connecting the world’s leading technology suppliers with a broad base of more than 100,000 customers and providing cost-effective, value-added services and solutions. For the fiscal year ended June 27, 2009, Avnet generated revenue of $16.23 billion. For more information, visit www.avnet.com.

BACKGROUND

Over the years, Avnet had become more efficient in processing customer payments by outsourcing data entry to several banks, who in turn presented the customer checks and remittance detail via web based lockbox imaging. However, they believed that there was an opportunity to further improve this critical process. The banks were capturing only the invoice numbers from the remittance forms so Avnet had to frequently manage exceptions in amount paid after they were applied to the SAP system. In an effort to contain costs in an uncertain economic environment, rather than asking the banks to key more information, Avnet sought a better solution that not only captured both full remit and check data but also complimented their SAP system.

SOLUTION

Open Scan Technologies, Inc. (OPEN SCAN®) develops enterprise receivables automation software for corporations. The software addresses the entire receivables function from image and data capture through remittance processing and receivables matching, to deduction / dispute resolution, to cash application. In the case of Avnet, the solution integrated quickly with their existing bank lockbox process. The software reduced costs and labor by automating the extraction of payment data from remittance images provided directly from the bank lockbox in an efficient and “real time” manner. It eliminated the need for manual keying of data and exception handling with proprietary point-and-click templates. The operator captures the desired data using their mouse in a matter of seconds. Each time a future payment from the same customer is received; the template is recalled and applied without operator intervention. Further, the software is able to increase posting accuracy by intelligently matching actual incoming customer payment data with existing open A/R data at the invoice level. This feature not only insures auto post rate improvement, but also the posting accuracy.

The Result

• Eliminated costs associated with capturing detailed remittance data.
• Invoice number and amount paid are captured and validated to open A/R in real time.
  
• In balance checks and remits are processed untouched.
  
• Efficiency of exception handling increased over 25% through the use of current AR information.
  
• The OPEN SCAN system implementation and operation did not increase labor expense.
  
• One day Cash Application cycle times of 99% were realized.
  
• SAP Business Analyst was able to successfully implement the interface from Open Scan to SAP.

“The OPEN SCAN solution has provided real value at a time of expense control pressure while allowing us to continue improving accuracy and data integrity. The software performs flawlessly day in and day out and has enhanced operational efficiency in our SAP environment making it a critical component of our overall credit to cash process,” said Jim Strand, Vice President of Financial Operations for Avnet, Inc.