“We estimate that between the Library and Finance, Leicestershire has made an overall saving of one full-time equivalent staff-member.”
Julie Malyon , Payments Team Leader, Leicestershire County Council
With operational savings at the forefront of decision-making in local government, senior managers at Leicestershire Libraries set about streamlining invoice processing. A target, recently introduced across Leicestershire County Council, to centralise all supplier information on the corporate finance system, was clearly leading the way to fully electronic invoicing. The council also had to comply with a government target mandating that at least 90% of invoices are paid within 30 days. Meanwhile, in the Council’s Finance department, plans were underway to centralise all orders on the corporate finance system. A combination of government standards, Council-level drivers and departmental cost-saving initiatives led the way to more systematic processes.
Identifying the problems
Steve Kettle, Modernising Services Manager at Leicestershire Libraries, outlined the unwieldy workflows in place at the time: “A supplier would send us a paper invoice”, he explains. “We attached onto it a coding sheet, assigned the cost code from a list, and annotated details such as amount payable.
None of this was keyed into Alto, our Library Management System (LMS), which held details of the original order. Instead, the invoice and coding sheet were sent to Corporate Finance, where staff manually keyed the invoice data into Leicestershire’s Oracle-based finance system.” This two-step manual process was highly susceptible to human error. “If figures were mistyped from the invoice or sheet, we risked paying the incorrect amount to the supplier, or taking money out of the wrong cost centre”, says Steve. “And the manually written coded sheet had to be certified by a Senior Manager. If I wasn’t available, invoices could sit around waiting for days.”
Once the invoice was entered onto the system, Oracle could generate a payment to the supplier. “The library had no knowledge of this”, adds Steve, “so we were unable to track the full lifecycle of the transaction.”
A more efficient process would stream invoices through both library and finance systems, and Leicestershire found a solution that would enable this.
Choosing the right solution
Leicestershire County Council selected Capita’s Keystone integration solution to realise the benefits of a more automated workflow. Among Keystone modules that Capita offers is a finance integration solution that passes information seamlessly from any LMS to local authority finance systems.
Implementing a tailored solution
At a Project Initiation Meeting, Capita’s Keystone consultants elicited the views of representatives from the Library, IT and Finance functions of the County Council, and formulated a Solutions Specification Document. As the Capita technical team finalised the integrated solution, Council staff-members were able to carry out tests against their own stringent acceptance criteria. Weekly progress calls provided coordination and reassurance. Steve comments, “Capita’s project management approach, along with the documentation produced, provided a robust framework for us all to work with.”
The Keystone solution is much more amenable to electronic invoicing, and in instances where suppliers continue to send paper invoices, library staff now enter details of the invoice, as soon as it is received, onto the library system. Keystone identifies those invoices ready for payment and performs the financial checks needed to automate the certification step, before passing them across to the finance system. Then Finance pick up those invoices on their own system without having to input them manually, which had previously led to inconsistencies, and payment takes place.
The benefits of efficient workflows
“The difference that Keystone has made is that the process is now automatic”, Steve says. “The process of invoice payment no longer depends on the availability of individuals nor is it subject to pressures of workload. Invoices are uploaded to Keystone and the resulting payment to the supplier is achieved far quicker and without the need for any re-keying or certification.”
The benefits of consistency and accuracy
Steve Kettle pointed out that “By only entering invoice data at one point, we have also improved the accuracy of the information, eliminating inconsistencies between the finance and library systems, and reducing the need for error-handling. Keystone also identifies problems that library staff can rectify without involving Finance.”
The benefits of timely payments
“The Council has set corporate targets in terms of meeting payment deadlines”, adds Julie Malyon, Payments Team Leader in Leicestershire’s Finance Shared Service Centre. “By speeding up the process through Keystone, we are a lot more confident of meeting the terms of payment agreed with our suppliers.”
The benefits of full visibility
By keeping Alto updated with all adjustments and status changes, Keystone gives enhanced budgetary control. Steve notes: “This has important ramifications for auditing. Budget monitoring and forecasting was previously an unwieldy process involving spreadsheets, Oracle reports and a great deal of manual intervention. But because both invoices and payments are now recorded on our Alto system, we can simply pull up a report to compare actual expenditure against commitments. The library, as well as the Council as a whole, benefits from more accurate and up-to-date financial forecasts and position statements. Our Audit people are delighted with this, and so are we.”
The benefits of electronic invoicing and payments
The library has already made good progress in moving to electronic invoices, and these are now processed seamlessly with the Keystone solution. “Our aim ultimately is to eliminate paper invoices altogether”, says Steve. “In the meantime, automated invoice processing means we no longer have to pay our smaller local suppliers by cheque – we can pay them by BACS, which is the new corporate standard of payment.”
The ROI of Keystone
Julie Malyon confirmed the return on investment accrued to Finance in eliminating the manual input of invoices. “We estimate that between the Library and Finance, Leicestershire has made an overall saving of one full-time equivalent staff-member. This equates to approximately £20,000 per year. The Council is also comfortably within the Government target for prompt payment – we’re now paying 92% of our invoices within 30 days.”
Andrew Jackson, the Library’s Systems Development Manager, adds, “Capita staff were very efficient and responsive throughout the project. They addressed queries as soon as we raised them, and resolved problems very quickly. The support we got from Capita was very good. The Keystone platform gives us the infrastructure for other areas of integration that meet Council objectives, such as certified online payment of hire charges and overdue fines.”