Invoice Management Reduces Energy Costs

An invoice management program enabled
Staples to reduce its carbon footprint by 7%
as well as lower overall energy costs.
Feature Story
Invoice Management
Reduces Energy Costs
An invoice management program enabled $25 billion Staples to reduce its carbon footprint by
7% as well as lower overall energy costs.
by Erin Harris
F
or 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
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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.”
Energy Invoice Storage:
An Unnecessary Problem
In addition to data and payment concerns, Staples
was overrun with paper invoices. Staples archives
old invoices at an off-site storage facility near its
headquarters in Framingham, MA. Valair recounts
what happened when Staples needed to access those
invoices. “When we wanted to conduct an invoice
audit, we would have to send someone to the storage
facility to pull 12 months of history and review all
those bills,” states Valair. “Now, we use microfiche,
but early on, we had mountains and mountains of
paper. And the actual audit was labor-intensive.”
For example, the auditor would have to rummage
through 12 different boxes and search through
Feature Story
“Everyone is fighting
for the slice of pie, and we are able
to get our fair share because we are armed
with accurate energy data.”
an outsourced payment soluthe folder for a particular
Bob Valair, director of energy and
month. Once they found
tion with data capture, reportenvironmental management, Staples
the invoice, they’d send it
ing, and analysis capabilities.
back to Valair. Or, oftentimes, engineers and architects
Ecova consolidates thousands of invoices into one invoice
requested 12 months worth of bills, and Staples would
for Staples to process and provides an automated feed of
have to ask the utility company for copies, for which it
data to its accounting software. Staples can now better
would charge a fee. Valair wanted an automated system
track how each facility manages energy costs and consumpthat would allow him to download copies of any bill or
tion. Staples receives customized reports with energy perreceive it via email upon request.
formance indicators across the entire enterprise as well as
each individual site, giving Staples the information it needs
to identify key performance opportunities. “Instead of payReporting, Storage, Data
ing the bills, Ecova resolves issues with utility companies
Limitations Lead To New Solution
on the spot, so we do not pay the overcharge for the misStorage may have been a concern for Staples, but so
take and save that money right up front,” explains Valair.
too was reporting. Staples’ AP team members were
“All utility bills are sent directly to Ecova. It scours the data
not experts in reviewing invoices for kWh, therms, and
and sends it back to Staples on a disc, eliminating the paper
BTUs, which are the key components of the energy
archives. We used to pay an extra balance, which did not
bills. And reports didn’t reflect real-time information,
hit our books in real time because it went through the mail.
which is necessary to ensure companies aren’t being
That process took five days by the time the invoice went
overcharged for their energy use.
through our Accounting Department, which paid the bill
In 2000, Valair researched utility bill processing and
and processed it. There were lags. Ecova is able to eliminate
analysis companies, and he chose Utility Expense and
late fees, audit the bills, and review the data.”
Data Management solution from Ecova. Ecova offers
Performance Dashboard Provides Real-Time Energy Data
Once a site or district is found
Staples incorporated Ecova’s Utility
that
warrants
investigation,
Expense and Data Management
Staples can use the reports to
solution in order to manage the
communicate the opportunities or
retailer’s extensive energy bills. Ecova
trends that need to be addressed,
processes all 55,000 of Staples’
allowing for communication to
energy bills, and Staples is able to
their facility managers. The reports
view the data in real time via Ecova’s
have helped Staples to improve
Performance Dashboard.
its energy conservation efforts,
The Performance Dashboard
resulting in an estimated 7%
includes three interactive reports:
reduction in its carbon footprint
trending, benchmark, and current
from 2003 to 2010. Major changes
month performance by site, allowing
to the Performance Dashboard
Staples to compare not only districtinclude increased customization
level performance, but also site-level
and reporting tools across the
performance. These reports offer
views, using only key variables, and Ecova’s Utility Expense and Data Management solu- broad spectrum of energy and
are represented in a graphical format. tion has helped Staples reduce its overall U.S. green- sustainability management. These
changes
include
navigation,
The Dashboard provides access house gas emissions by nearly 20%.
configurable
views,
flexible
to actionable data and analysis to
retailers for utility information across the retailer’s portfolio. security, and intelligent reporting.
The Dashboard is a Web-based tool that allows for both entire
For More Information On Ecova
portfolio review and drill-down into individual locations and
Go To www.ecova.com
specific utility invoices.
September 2012
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Feature Story
“We have been able
to beat our budget year over year, and our
energy costs have gone down.”
The integrity of the reports
As Staples discovered, autovalidates the data from each
mating the invoice manageindividual invoice. Valair
ment process means AP staff
Bob Valair, director of energy
explains that the accuracy of
spends less time struggling
and environmental management, Staples
the data allows his team to do
over a sea of complicated
more projects and earn more capital, because Ecova enables bills and more time getting work done. Staples has better
Staples to prove cost savings through reporting. “Everyone insight into not only where money gets spent, but also how
is fighting for the slice of pie, and we are able to get our fair and when. n
share because we are armed with accurate energy data,” says
Valair. “It has been mentioned that knowledge is power. If
you are well-prepared when you approach the finance team for
money, they are going to listen. We have been able to beat our
Erin Harris is associate editor of
Integrated Solutions For Retailers
budget year over year, and our energy costs have gone down.”
magazine. She can be reached at:
Consider improving cash flow by streamlining workflows,
[email protected].
initiating reminders, and shortening the payment cycle.
Posted with permission from Integrated Solutions For Retailers. Copyrighted 2012. For subscription information, call (814) 868-9935 or visit ismretail.com.
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