Lowes Menswear improves invoice processing with a made-to-measure AP Automation solution  

However, Lowes was also a victim of its own success.

With 30,000 invoices flowing in individual branch doors every month, store employees were drowning in a deluge of paperwork and swamped with a high volume of errors and exceptions.

The workload was so high that it would take 3-6 weeks to get supplier invoices back to HQ, where the finance team would manually enter them into Pronto Xi version 750.1 before they were processed for payment. 

The company would regularly have a backlog of seven large Australia Post tubs full of untouched invoices at any one time. As a result, Lowes desperately needed a system to streamline how they handled supplier invoices, eliminate the mass of paper, and raise the morale of their stressed AP staff.  

The majority of Lowes 30,000 monthly invoices are for inventory, which is either stored in one of their warehouses or shipped directly to the store. Once the invoices arrived in-store, staff needed to collate and mail them to head office. Because of the high volume, Lowes was spending a significant amount of money a year on mailbags and postage alone.    

“We tried to go to scanning the invoices at the store to try and remove the paper,” said Peter Vourakis, Lowes, Financial Controller, “ but store staff really pushed back on us because they were stretched as it was.”

Lowes’ business processes cater to the tens of thousands of products in their catalogues and in-store. To deal with the sheer volume, they’d made numerous modifications to their Pronto Xi ERP to auto-replenish goods weekly. The PO process was modified to automatically split the consolidated POs by store and add a specific suffix, allowing vendors to ship the goods directly to the branch.

Lowes turned to Redmap, an experienced Pronto Software partner, to tailor a fitting AP solution.

“I know that we do things differently at Lowes,” said Jim Kondonis, Lowes, Chief Financial Officer. “I recognised that Redmap had the most comprehensive understanding of Pronto Xi in the market, which would be helpful. However, I knew we would encounter issues in the implementation that even Redmap hadn’t seen.

“I selected Redmap because of the way they engaged with us during the sales process suggested to me that they would work with us to get it right. That relationship quality is something that I look for in all my vendors, and I am delighted to say that Redmap outperformed my expectations. As an example, at one stage to solve a problem, our Redmap business analyst visited one of our stores on a weekend, to see what they were doing to understand the issue. That’s commitment.”

“We began the process by implementing our best practice solution for Pronto Xi at Lowes,” said Ben Woolley, Redmap CEO. “This base system allowed Lowes to process invoices that were linked to a purchase order and those that weren’t via the out-of-the-box solution.

“Under this process, all Lowes’ supplier invoices are sent to an email address that we provide. The system then uses AI-based data extraction and pre-set criteria to determine whether the invoice should be automatically approved or forwarded to the appropriate staff member for their review. Next, a link is generated for the source document to ensure it can be easily located and downloaded in the future.”

The next challenge for Redmap stemmed from Lowes high volume of products and auto-replenishment model with split purchase orders. This created a large number of available receipts to match to a single invoice, which in turn, led to difficulties in receipting, particularly with a team that was already working at capacity.

The Redmap team investigated and found a fitting solution. “We found that the exceptions could be grouped into common problems,” said Ben. “Many of the issues stemmed from the vendor and their ERP system. Our automation platform helped Lowes identify the high rate of errors occurring in-store, for example, invoices not adding up.”

Redmap minimised the errors by implementing new processes, including a secondary catalogue review after invoices have been approved. This step ensures that the catalogue is updated as part of the invoice resolution process, so the same problem isn’t repeated every time that item is sold.

Jim says he’s delighted with the result. “There was a level of inaccuracy in some stores that was clearly not acceptable. Our automation project has highlighted this and allowed us to execute other projects aimed at streamlining such processes. We would not have been able to do this without the visibility provided by Redmap.”

"In hindsight,” said Jim, “the irony is that we were spending more on mailbags getting invoices from the store to HQ than the entire automation solution with Redmap costs us."