Case Study
Biopharmaceutical Company Optimizes Accounts Payable Process

Accounts Payable Challenges

A leading biopharmaceutical company’s slow accounts payable process threatened its vendor relations—and its ability to market medicines that help treat life-threatening illnesses. Canon Business Process Services stepped in to deliver a diagnosis, expedite payments, and keep vendors and employees satisfied.

Every company depends on a supply chain to procure the materials needed to produce and put out a product. However, our clients' current accounts process threatened its ability to deliver much-needed treatments.

Accounts Payable at the company had three core issues:

  • Numerous inefficiencies included a high cost per invoice, numerous processing errors, and an excessively long cycle time from invoice receipt to payment (5 days for non-exception invoices and 15 days for exceptions)
  • There were no process monitoring or reporting systems to spur continuous improvement
  • Due to late or outstanding payments, vendors who’d supplied components for medicine threatened to withhold future shipments

This last issue was especially problematic. An unhealthy relationship with vendors jeopardized the company’s ability to deliver its product to healthcare providers—who couldn’t then deliver medicine to patients who needed it. Internal groups responsible for manufacturing medicine were dissatisfied, repeatedly complaining that AP needed a treatment of its own.

Our Solution

After a series of detailed discussions with Canon—about our prior experience and insights into the future of AP—the company realized that the right outsourcing partner could treat its ailing accounts payable process by offering a sustainable cure.

We helped the company implement a methodical, comprehensive approach to accounts payable. First we mapped out the current state, documenting recommended changes and the best practices needed to get to the new, desired state.

Then the changes were implemented. This included a new method of end-to-end invoice processing managed by an in-house Canon staff. With the new method, we receive invoices and scan them into the pharmaceutical company’s image capture and workflow system. Then a separate Canon team—located in our offshore business process center—employs a four-step system to process the invoices:

  • Access the invoices via VPN and provide invoice validation, ensuring that all data was extracted correctly
  • Verify invoice PO numbers and rectify any incorrect numbers
  • Match the correct supplier and invoice line items to the corresponding PO
  • Code and route non-PO invoices for approval
"Canon’s AP solutions, which support the supply chain that enables us to manufacture our innovative medicines, help support this important goal of patient well-being." - Accounts Payable executive at biopharmaceutical company
Prescribing A Treatment For Accounts Payable

Improved Accounts Payable Process

Thanks to this faster, more streamlined process, AP improved across the board. Non-exception invoices take just 36 hours to process, down from five days. Exception invoices take half the time they once did. On-time payment increased by 22%. The in-house Canon team processes 15,000 invoices a month, and because we can fix errors much more quickly, 10% fewer invoices are rejected. Now paid much faster, vendors are happier with the biopharmaceutical company—and so are the internal groups whose productivity depends on those vendors’ happiness.

“Our company is committed to improving the care and lives of people around the world,” added the AP department executive.

To make sure the process continuously improves, we provide AP performance management reports, a help desk, and an on-site team at the company’s main facility dedicated to resolving PO issues. We recently assigned a global manager to the team in response to the pharmaceutical company’s plans to expand our AP services to Europe.

Now, no matter where our teams operate in this global AP process, we listen to our client’s feedback and note anything we can fix to make the process even more productive for the biopharmaceutical company—so it can continue improving the lives of patients around the world.

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