How Retail Finance Teams Are Cutting Invoice Work by 70% and Closing the Books in Days
by The Ottimate Editorial Team
In the first part of this blog series, we explored how AI-driven AP automation technology is helping retailers and grocery stores avoid misspending, take advantage of flexible payment options such as virtual cards, and enhance expense and spend management. Now let’s examine how the same software is also enabling companies in these industries to expedite invoice processing, streamline month-end closing, and enhance relationships with vendors.
Expediting invoice processing
Invoices are the biggest paperwork headache for any retail or grocery store. Whether it’s many vendors billing for just a few line items or a couple supplying hundreds of products, invoices need to be processed promptly, matched against POs and receipts, routed for approval, and then sent into payment workflows.
Conducting all this work manually proved too much for Clutch Coffee Bar once the chain expanded to 13 stores in North and South Carolina. CFO Jake Vandermeer’s initial solution was to build a homegrown application to automate part of the process; however, he later discovered a more comprehensive solution in Ottimate.
“I said, ‘I’m just going to have everyone send invoices to an email address, scrape for PDF attachments, and then I’m going to use an OCR library to parse those PDF attachments and translate them into structured data,’” Vandermeer said. “And I built a program to house it all. I was looking at this process when I came across Ottimate. I was like, ‘Ah, there you go. Much better. You guys already built it for me.”
With Ottimate’s paperless, end-to-end solution now in place, invoices are captured, emailed, coded, and routed for approval using AI-driven technology. Ottimate also automatically updates Clutch Coffee’s NetSuite ERP system, eliminating even more hours of manual data entry.
“We don’t do any paper,” Vandermeer said. “All of our invoices get emailed to us. I set up routing rules that automatically forward the emails into Ottimate, which transcribes the invoices and adds GL codes to each line item. If it’s a new line item, we in finance just quickly map it first. The digital invoices get sent to Clutch Coffee’s stand managers, who review the coding, make any necessary adjustments, and approve the invoices for export into NetSuite.”
Adding storefronts with a lean AP team
When Greg Flores became corporate controller, the AP group for Cardenas Markets was processing invoices and payments for 49 stores in California, Nevada, and Arizona. Adding three new banners—Tony’s Fresh Market, El Rancho Supermercado, and Los Altos Ranch Market — to create the Heritage Grocers Group (HGG) expanded the number of locations to 115 stores across six states. Flores realized that the company needed an AP automation suite to keep up with this rapid growth and reassign certain staff members to more skilled positions.
“The number of staff members that we had to manage was not sustainable,” Flores said. “We needed to be able to grow without incurring much more overhead and expense. Ottimate allowed us to do that organically without needing a headcount increase. We used to have a team of 40 and only have 10 now.”
Another reason for HGG to move away from manual processing was the large number of invoices the AP group had to review each month. “We would receive those paper items, enter them into the ERP, code them, and update our system,” Flores said. “Then we’d route them and create payments. 75,000 invoices are a lot of paper to do this with.”
Previously, each HGG store mailed paper invoices to the corporate HQ in California. This could take days, and documents could be misplaced. Implementing Ottimate allowed Flores’s team to make much-needed changes and to focus employees’ time on exception handling rather than manually processing every invoice.
“The current process is that invoices are received at the back door and scanned into Ottimate,” Flores said. “It reads and codes them automatically. The AP team is now only dealing with the exceptions because if an invoice has passed all the criteria we’ve established, Ottimate processes them directly.”
Eliminating the number of human touchpoints with Ottimate has enabled HGG to significantly accelerate its invoice processing turnaround, while simultaneously improving data accuracy.
“Ottimate reduced our invoice processing time by 50 to 70 percent,” Flores said. “Now that we’re not manually handling 75,000 invoices a month, we’re no longer miscoding, misplacing, or forgetting to send them to the right people. Ottimate is around 97 percent accurate and is more consistent than human data entry.”
Expediting month-end closing and improving vendor relationships
For any grocery or retail store, month-end closing is a headache that involves many time-consuming tasks. Similarly, managing vendor relationships can be challenging when AP staff must spend most of their time on data entry and processing paperwork. Let’s look at how AP automation is helping companies do better in both of these areas.
When relying on manual invoice processing, it’s not only individual vendor payments that can be held up. Creating financial statements for month-end closing can also be complicated and delayed, particularly when a grocery or retail business is trying to handle paperwork for many dispersed stores. Heritage Grocers Group (HGG) eliminated this issue with Ottimate.
“When I first came here, closing was difficult because creating our financial statements was dependent on getting all our invoices processed, and otherwise we had to do accruals,” Flores said. “With Ottimate, we get closing finished faster – in just five to seven days – with strong accuracy on all our purchases.”
Rendering statements was one of the most painstaking tasks for HGG’s AP staff during month-end closing. They’d have to go through each statement line by line to validate details and find discrepancies. Thanks to Ottimate’s automation, this step is now quick and easy.
“Before, statement rendering was manual,” Flores said. “Now, Ottimate validates several criteria to see if it’s the wrong invoice number, vendor, or amount. Then it points you in the right direction, so you can look at the actual documents if needed.”
Ottimate is not only helping HGG’s AP team streamline month-end closing but also giving the purchasing department greater visibility into its spending.
“Some of the buyers like to see what they bought this month from a particular vendor,” Flores said. “They can pull up that record in Ottimate, see all the invoices, and drill down onto a certain one.”
Another unexpected benefit that AP automation has provided at HGG is the enhancement of relationships with suppliers. Previously, if a vendor called with a query about a payment, it could take days for the AP team to contact the off-site storage facility, request a specific box of files, review them, and locate the required information. The answer is now just a click away in the centralized and digitized Ottimate content repository.
“We have thousands of vendors, so if we’re quick and accurate in processing payments, there is a trickle-down effect,” Flores said. “We’re saving on research time and don’t get as many calls. If they need information, we can get it to them more quickly. We’re not a problem child for them, and they’re not a problem child for us.”
Tight integration between Ottimate and the Microsoft Dynamics 365 ERP system eliminates redundant data entry for HGG’s AP team, enabling them to pinpoint specific information and facilitating faster responses to vendors’ payment queries.
“Integration is critical because, ultimately, the only thing that matters is the P and L and that’s through our ERP,” Flores said. “Ottimate did a good job with that. And since we upgraded, if a vendor calls and says they didn’t get paid, the ERP writes back to Ottimate, and we can let them know we already sent a check.”
Ready to elevate invoice processing, vendor management, and month-end closing for your business? Book an Ottimate demo today!