Acquisitions and growth have guided Tessenderlo Kerley Inc. (TKI) into becoming a leading manufacturer of specialty chemical solutions, including fertilizers, crop protection and process chemicals to diverse markets in North and South America as well as Europe.
Due to its ever expanding business ventures, TKI found themselves in a predicament… ongoing acquisitions were causing an increased demand on accounting and customer service staff time. There were more orders coming in that needed to be processed into their SAP system (great news!) and more customers to invoice (even better!). Unfortunately, these additional transactions caused an influx of labor-intensive, paper-heavy work in accounts receivable (AR).
You see, TKI customers were used to dealing with paper — lots of paper. Even if these customers didn’t want to embrace new technologies, that didn’t mean TKI couldn’t. Its ultimate goal was to find a way to move order-to-cash (O2C) processes from paper-based to electronic.
Step 1: Automating the Accounts Receivable Process
The first step in TKI’s project was automating their AR procedures, while taking advantage of their current SAP investment. Prior to embarking on its automation project, the TKI AR department would manually:
- Batch-print invoices to a physical printer every day
- Review and approve each individual document
- Collate, fold, stuff and stamp every invoice
Naturally, these manual steps were costly and inefficient. TKI soon identified that by utilizing BC-CON integration, it could have fax, email and print output from their SAP system, keeping their customer invoices completely electronic from approval to delivery.
Now that they had their AR process electronic and more manageable, TKI decided to take a look at the other side of the O2C cycle — sales order processing.
Step 2: Automating Sales Order Processing
First, it’s important to know that there are eight TKI Customer Service Representatives (CSRs) that process about 35,000 orders each year. However, 75% of those orders come within the first five months of the year, since that is when farmers and other customers in the agriculture business are most in need of TKI’s products. Orders were most often received unformatted, forcing CSRs to shy away from their primary role of customer service to manually process orders.
TKI was challenged with managing growth through acquisition, maximizing efficiency, and all doing so without an increase in headcount. Thus, looking for an order processing solution to:
- Create a more efficient and accurate process for entering orders into their SAP system
- Increase response times for customers
- Improve CSRs productivity and job satisfaction
The solution for TKI was to keep the entire order-to-cash cycle integrated within its existing SAP system — from reception of an order, to its creation in the SAP system, to its electronic archiving. TKI can now quickly process and track any order, regardless of how it arrived, with complete accuracy, visibility and efficiency.
The Benefits of Order-to-Cash Automation are Clear
For companies like TKI, reducing the time it takes to turn an order into money in the bank offers strategic benefits such as:
- Reduced receivables and DSO rates, optimized cash flow and management of working capital
- Improved debt-to-equity ratio, reduced external financing needs and enhanced credit rating
- Strengthened business relationships through higher customer satisfaction
- Freed up resources to focus on core business-building activities
- Lowered O2C processing time and costs
Want to learn more about order-to-cash automation? Check out the white paper Closing the Order-to-Cash Performance Gap Between Document Processes & SAP Solutions!