Case Study: Accounts Payable Automation Results In 100% Return On Investment In Less Than A Year

American Tire Distributors faced a serious problem resulting from recent mergers and a growing customer base. The amount of paperwork accumulated in the accounts receivable department and was increasing rapidly with no end in sight. After the merger the number of daily deliveries had grown and by 2007 would reach 35,000. As the number of customers and daily deliveries rose, so too did the number of aged accounts. As a result, the credit department was finding it diffi cult to process the documentation involved in accounting for collections from late payers.

To monitor late paying accounts, American Tire Distributors' accounting system would output onto green-bar paper a weekly aging report of the accounts with overdue balances. However, because the invoices and signed delivery receipts were being returned by the truck drivers to the company's distribution centers, it was difficult for the credit department personnel to verify that the merchandise has actually been delivered. To further complicate matters, information about each customer's credit limit was not consistently maintained, nor was it immediately accessible to the credit agents.

Responsibility for resolving these issues rested on the Director of MIS at the time, Steve Peppard. Having implemented scanning solutions at his previous position at CBS, Peppard was familiar with tools used for automated data entry and document imaging. His intention was to install a turnkey system where scanning and automated data entry would be used to capture data from the invoices while storing and indexing the images into a central repository, thus making them accessible to the credit department.