Mohawk Industries offers an award-winning success story in electronic invoicing. Recipients of the Excellence Award in Electronic Invoicing at the 2010 PayStream ePayables Summit in Charlotte, Mohawk implemented eInvoicing in 2005.
AP Manager Tracy Bryant of Mohawk Industries, the second largest manufacturer of commercial and residential flooring and carpet, shared the story of why Mohawk decided to change from paper to electronic. See her story HERE >>
The justification for the decision is simple: Paper invoicing is too expensive. The combination of overhead, costly keying errors, and reliance on mail resulted in a call for change.
Finding the Right Partner
After extensive research, Mohawk teamed up with OB 10 to provide eInvoice software. They were already in position to automate their PO invoices, which made up 72 percent of their volume. Their goals in the adaption included reduced processing costs and keying errors, same day processing, and better meeting the needs of their auditors.
OB 10 played a critical role as a partner. They were the only solution that offered “any-to-any,” meaning that the vendor could place any format into any other format in the ERP system. This made practical sense for Mohawk’s employees. Every invoice has to pass through five to six checkpoints before it can enter the ERP system. It gets sent back to the vendor should it be rejected at any of the checkpoints.
Tangible Benefits
Features of the electronic invoicing software through OB 10 have benefited vendors and Mohawk directly. Vendors have the ability to log-in to the portal to check the status of the invoice, reducing questions of invoice status. Mohawk benefits because their imaging department no longer has to sort mail, effectively reducing headcount.
Through the assistance of OB 10, Mohawk strategically mapped out and targeted vendors to change to eInvoicing. Within 21 months, all those targets were met. It is an on-going process, however, as OB 10 develops a campaign annually with new vendors lists. Vendors are broken down into tiers by the volume of their yearly invoices, ranging from 500+ down to 30. At this point, 1500 vendors (60%) and 400,000 invoices (67%) are now processed electronically.The change in overhead for Mohawk has been remarkable. The AP department has been reduced from 55 to 25 employees since 2005. Their ROI, which was projected to occur by Year 3, came through within the first year of implementation.
Lessons Learned
Leadership learned some valuable lessons throughout the transition from paper to electronic. Bryant noted that a loyal vendor base and strong management support from top to bottom were keys to success. Additionally, messages to vendors had to be clearly communicated. One of those messages is that paper invoices will be deleted. Finally, vendor follow-up has to be persistent.
Mohawk is a classic example of how eInvoicing can effectively reduce costs of a company’s invoicing process. And they even have a trophy to prove it.
