Every month, Aegon Hungary handles more than 2,000 supplier invoices in a process that involves up to 70 people. Each invoice has to be checked and approved by up to five different people before it can be processed for payment.
This core business process was incredibly time-consuming. Paper invoices were moved manually from desk to desk, and it often took weeks to collate all the necessary approvals. “It used to take between 10 and 14 working days to approve each invoice,” said György Czipa, team leader of the financial administration team at Aegon Hungary.
When delays occurred, there was a risk that invoices might not be paid on time. There was also a chance that invoices might get overlooked or lost completely. For better control over the entire process, Aegon Hungary decided to build a workflow business application for invoice approvals.
Aegon Hungary turned to K2 and Abesse, a K2 partner in Hungary, to help design and implement the new workflow application for invoice approvals. The K2-based solution integrated with the company’s existing Oracle financial application and was rolled out to a potential user base of 200 employees.
Now, all the company’s invoices are referenced and scanned on receipt. They are then attached to electronic forms and routed automatically to all employees who need to provide authorisation, including cost centre managers and taxation experts, as required. Once invoices are fully approved, all the relevant information is conveyed directly from the K2 business application to the company’s Oracle financial system for payment.
With this application, invoices are now approved, on average, within five to seven working days.
“It is important to generate operational efficiencies in these difficult economic times,” Czipa said. “Using K2, we can now complete invoice approvals around 50 percent quicker than before.”
This tremendous time saving helps Aegon Hungary pay invoices more promptly. With fewer late payments, the company maintains a solid reputation and working relationships with its suppliers.
“I estimate that the number of invoices paid on time increased from 60 or 70 percent to 80 or 90 percent after using K2,” Czipa said.
As an added advantage, the K2 business application provides Aegon Hungary with clear visibility of every invoice across the entire approval process. Employees in the financial administration team can see the approval status of invoices at the touch of a button and monitor them closely to ensure payment deadlines are met. Now it is far less likely that invoices will be lost or forgotten.
Managers can also use the K2 business application to look back at historical records and see who approved which invoices and when. This capability helps the company with financial audits and query resolutions.
Aegon Hungary now plans to develop more K2 business applications, in areas including contract management. “Our invoice approval process is a relatively simple one. When we use K2 to automate more complex processes within our business, the efficiency improvements will be even higher,” Czipa said.