US Farathane Case Study
US Farathane is a leading supplier of highly engineered plastic fabricated components to the automotive industry, operating across several different facilities in the states of Texas, Tennessee and Michigan.
US Farathane has a centralized accounting department with purchasing being split between the department and other branch offices. The decentralized purchasing was performed on a carbon copy paper form, which needed to be manually routed for approval and sent via intercompany mail to corporate finance.
Accounts Payable had a 100% paper based, manual process, with all documentation being sent to the corporate headquarters, inundating the AP department with paperwork and allowing various plants and staff to claim that the paperwork must have been lost in the mail. No controls were in place to verify the appropriate approvals and no system was in place to identify pre-committed spend, resulting in vendors being paid late and finance having no visibility of the company’s financial liability.
USF realized that it was not sustainable to continue using this manual process and decided to automate its invoice processing. The company chose Palette as its AP and purchasing automation provider due to its high level of functionality, its ability to meet technical demands, and because it was the most user-friendly system of those tested.
Of additional appeal was the enhanced integration with Microsoft Dynamics ERP software which offered USF the opportunity to effectively run the solution alongside its existing systems.
USF deployed the PaletteContract, PaletteBuyer and PaletteExpense modules from the PaletteArena software suite. This ensures that the thousands of employee expense reports and the 64,000 invoices it receives every year are processed, approved and scheduled for payment quickly and efficiently.
“By automating purchasing and AP with Palette we have implemented business rules that are automatically enforced and streamlined processes. Purchasing is able to use the reporting capability to leverage spending while AP no longer needs to be ‘corporate policy enforcers’ and are able to work at a higher level,” commented Roxanne Imrick, USF Accounting Manager, “Thanks to Palette we now have complete visibility of our financial liabilities, and our corporate finance department is as state-of-the-art as the products that we manufacture.”
Of equal importance is the adherence to contract terms and purchasing policies and this is where PaletteBuyer and PaletteContract offer significant value to those processes. By integrating PaletteExpense with USF’s Microsoft Dynamics GP ERP, the company now has a fully connected invoicing process.
Palette also built an operational budget module that works with PaletteBuyer so that when a person in one of the manufacturing plants tries to make a purchase they are required to assign the spend to a budget category. Budgets are loaded into the Palette system by category and the module tracks the available budget and subtracts purchases from it when a requisition is created and approved.
If budget is not available then the requisition gets auto routed to a workflow for consideration and approval or rejection, ensuring that USF can maintain visibility of all business costs. As a result plant controllers are now in a position where they are empowered to maintain the budgets that they had forecasted, rather than having to apologize when plants go over budget.
Faster and more efficient
Automating their invoice processing with Palette means that USF now has a faster and more efficient invoicing process in place. The deployment has reduced the amount of time that accounting staff spend on administrative tasks and the amount of paper that the company uses. It has also eliminated the delays caused by paperwork as documents are no longer passed between different personnel, which is particularly helpful for staff at remote sites.
Greater visibility and monitoring
The Palette deployment has also given US Farathane’s finance department better tools and metrics for monitoring and reporting as well as greater visibility over the company’s spending. For example, the Palette software offers up-to-date information on account balances, allowing the company to better control, manage and analyse its finances. In particular the Expense module has delivered greater insight for the accounting team into staff expenditure, ensuring that it is not only authorised and approved but also ensures faster reimbursement to employees.