Digital invoice workflow in S/4HANA at the Ober Scharrer Group

Ober Scharrer Gruppe GmbH (OSG) is one of Germany's leading providers of ophthalmology with 120 locations, including nearly 50 surgery centers. Over 300 ophthalmologists perform more than 150,000 IVOM (macular degeneration) and cataract (cataract) surgeries annually. OSG also operates through subsidiaries in Switzerland, the Netherlands and the UK. 

In addition to the "blockbusters" cataract and IVOM, OSG offers the entire spectrum of conservative and refractive ophthalmology, including specialties such as the treatment of premature infants. OSG's business is flourishing and - in view of an aging population whose eye performance is naturally declining - continues to grow. As a result, business correspondence is increasing and with it the incoming invoices, which arrive daily in paper form at one of the 120 OSG locations.

Basic digitization cure

In such a distributed organization, processing invoices manually, forwarding them from checkpoint to checkpoint and finally having them posted is extremely time-consuming and, due to the high proportion of manual work, sometimes also prone to errors. No transparency about the status of the incoming invoice volume, documents remain unintentionally longer, reminder fees and discount losses threaten - these classic disadvantages of analog work prompted Dr. Alexander Tkotz, Head of Corporate Development at OSG, to subject the company together with his team to a fundamental "digitalization cure" to make it fit for the digital future. 

As an "in-house consultant," Corporate Development uncovers optimization potential in internal processes and develops solution proposals. One result of this activity in 2020 was the switch from the outdated Microsoft Navision ERP to SAP S/4HANA in a greenfield approach. Below that, other IT projects fanned out: together, almost ten IT systems, all of which had to go live at the same time. 

Several IT projects were running simultaneously 

The conversion of the previously paper-based, manual invoicing process to a digital workflow was thus just one of many new projects. In order to be able to carry out the implementation reliably, OSG chose xSuite Group, a technology partner with many years of industry experience whose solution is also integrated as deeply as possible into SAP.

"Digitization is a topic that every company has to face," Alexander Tkotz is certain. The ERP conversion opened up a very wide range of digitization options for OSG, including the previous, analog invoice processing as a central issue. With the xSuite invoice workflow, the company not only digitized its entire invoice processing, but also completely converted it in the process.

To achieve this, a process had to be defined that would suit everyone - not exactly a trivial task in view of the structures that had evolved over many years and the major differences between the sites and the headquarters. It had to be determined who would carry out which step in the future. Hundreds of previously unlisted local suppliers were identified and newly created in the master data. Above all, almost 500 employees - mostly medical staff with often little affinity for commercial processes - had to be trained to work with the digital workflow.  

Automatic escalation levels built in

In the meantime, the entire test approval process has been digitized. "We have made it simple to the maximum", explains Alexander Tkotz. There are only four stages (the first two of which are mandatory, stages three and four only for amounts above defined value limits). Each invoice is factually checked in stage one, and in stage two a manager at the site gives his approval for payment according to the dual control principle.

Various escalation levels have been defined in the workflow: If a factual check remains unprocessed for four days, the releaser is informed next, after six days the process automatically goes to regional management, and after eight days finally to the COO. This ensures that invoices are processed quickly, and potential cash discount losses and reminders can be counteracted at an early stage.

OSG has set up three layers in the reporting of the xSuite solution: The first shows KPIs for management such as the number and total of open invoices per process step and the amount of the total current document volume. It is also immediately recognizable which invoices with a particularly high amount (from 10,000 euros) are in circulation - important especially at the turn of the month for the accrual.

The second layer shows KPIs per company and location as a management tool for the accounts payable team. Here, the open invoices are broken down to individual locations and individual statuses. Finally, the third layer provides further details per document, e.g. lead time, cash discount date and current processing point. 

Shorter lead times, higher transparency 

Since January 2021, invoice verification and approval have been fully digitized at OSG. The result is a significant acceleration of processing times as well as full transparency on every status of every invoice. OSG also plans to fully digitize the invoice receipt process in the near future.

If possible, suppliers should no longer send paper invoices, but only digital invoices in the future. These can be fed into the workflow much faster and are practically free of errors. Subsequently, the electronic storage takes place in the digital archive of the xSuite.

As the next major step, OSG will set up an ordering system in SAP and link it to the invoice workflow so that end-to-end P2P processes are possible. Automatic invoice verification will then take place according to the three-way match: If the order, goods receipt and invoice match, the system can automatically post the invoice in the dark without the need for a separate check and release. OSG is currently having the digital archiving audited by its auditors. In the future, paper documents can be destroyed after successful scanning, a further step away from analog to efficiently designed digital processes. Thus, digitization at OSG is still in full swing. 

Event note: DSAGLIVE

Learn about the advantages of electronic invoice processing with xSuite at DSAGLIVE for other industries as well. In the practical report REMONDIS Maintenance & Services GmbH & Co. KG (on Tuesday, September 21, 2021, at 3:30 p.m.), you will learn how the introduction of an invoice workflow with S/4HANA and Fiori was implemented.