Invoice Management Reduces Energy Costs
September 2012 Integrated Solutions For Retailers
By Erin Harris, associate editor
An invoice management program enabled $25 billion Staples to reduce its carbon footprint by 7% as well as lower overall energy costs.
For retailers with many locations across the country, driving down utility costs and improving facility efficiency is critical to stay competitive. Tracking invoice data and doing a comprehensive audit to ensure the correct amounts are being paid is labor-intensive and often outside the scope of most AP departments. Dealing with billing mistakes becomes a reactive, rather than proactive, task. Bob Valair, director of energy and environmental management at Staples, oversees the office supplies giant’s energy program. Valair recognized early on that eliminating bill payment as an AP function was a key to maintaining Staples’ successful energy management program.
With an energy management program comes a tremendous amount of data and invoices. Indeed, Staples locations receive a total of 55,000 utility bills (water, electric, and gas) each year, but the retailer’s small AP department found invoice management to be a daunting task — one that required not only on-time payment but also a clear understanding of energy data. Since the inception of Staples’ energy management program in 1993 (the retailer operates Novar’s energy management system [EMS] throughout the entire chain), the retailer’s AP department paid the utility bills and used a third-party software program to keep track of them. But, overall, Valair felt that energy bill payment and tracking was not the core of Staples’ business. While he wanted access to the data and the ability to understand it, that was not the AP team’s forte. “Our AP team was basically just paying the bills, because it’s an AP function,” says Valair. “But, these bills are complicated. They include estimates, misreads, and other technical information that isn’t easily understood if you’re not close to it. AP made payments immediately, without really understanding the data provided, because they were concerned with a cancellation of service.” For example, Valair explains that AP would process and pay the bills, but sometimes the bills did not align with the accounting department’s records. “AP would state that they were unable to pay the balance because they had already cut a check for the previous bill — the check just hasn’t cleared at the utility yet,” says Valair. “We experienced many pain points just like this, because the AP team either didn’t receive or understand the energy data. Or, for example, when I requested a copy of the bill, AP explained that they couldn’t give me the original, so they’d make me a copy. So someone had to print them and then send them to our group. There simply had to be a more efficient way to handle invoices.”