Based in the Ruhr Region and with other locations in Saxony and Central Switzerland, the automotive company LUEG AG is one of Germany’s largest car dealer groups. What began as a car factory in Bochum in 1868 is now a corporate group with 13 companies, more than 30 locations, and around 1,600 employees. LUEG has eight car brands covering the entire spectrum from Mercedes-Benz through Volvo to Ferrari, and from micro smart cars to trucks and buses.
The right software is essential for the growing company to carry out its daily business. Since 2010, LUEG has been using SAP Carbon, an SAP solution based on the standard SAP Dealer Business Management (DBM) system but specially designed for automotive retailer clients of the consulting firm MHP (A Porsche Company). By using this solution for all the core processes relating to vehicle ordering, delivery, invoicing, etc., LUEG has managed to reduce duplication of work in sales, repairs, and accounting by around 80 percent.
Invoice processing used to be performed asynchronously
The company’s longstanding method of processing incoming invoices no longer met the high technological demands placed on it. Although there was an electronic workflow for invoice approvals, this took place outside SAP, so employees had to switch back and forth between the workflow and the ERP system when approving and posting invoices. This meant that the entire process was performed asynchronously. Installed in 2006, the system was no longer technologically capable of performing same-day processing of the growing number of invoices received by the company. This led to permanent backlogs.
Furthermore, the system did not allow LUEG to accept PDF invoices, something that was of particular importance to the company. As a result, every creditor that had already mailed a PDF invoice would be asked to send the invoice again as a hard copy. The procurement team would then have to open around 600 envelopes a day, affix barcodes to the invoices, and pass them on to an external scan services provider. As the existing workflow was unable to process PDFs, the provider would have to return the scans in TIFF format.
Rule-based workflows in SAP
For the important reasons outlined above, the company decided to replace its existing invoice verification process with a new solution that would allow invoice approval to be performed automatically in rule-based workflows within SAP. SAP integration – with no third-party systems, no variations in media formats, and no need to program interfaces – was crucial. “We chose a solution from the xSuite Group,” says Fabian Schauenburg, director of the LUEG Group’s procurement division, which is also responsible for invoice verification. xSuite Invoice Cube offers all functions necessary for the digital verification and approval of vendor invoices, whether these are in paper form, PDFs, or electronic invoices in ZUGFeRD or Xrechnung format.
Project completed right on schedule
“The main workflow systems on the market offer more or less the same things,” Schauenburg says. “What impressed us about the xSuite Group was its overall performance, how it approached the project and then brought it to successful completion. During the initial presentation, we were given convincing answers to tough questions, and the project was completed right on schedule.” The first discussions took place in April 2018, the project began at the end of November, and on May 21, 2019, the workflow went live with modules for document capture and incoming invoice processing. “From day one, the system performed perfectly without any notable teething problems,” according to Schauenburg.
In mid-2019, LUEG made a partial shift towards electronic invoicing with PDFs. Fifty percent of the approximately 150,000 vendor invoices LUEG now receives are in electronic form, a proportion that is set to increase. The new system was introduced at just the right time, then, as xSuite Invoice Cube enables the automotive retail group to accept PDF invoices, regardless of whether these come directly from vendors or from a scanning services provider. The latter now digitizes only half of all invoices and sends the electronic images back in PDF format. LUEG then stores these images in an archive system accessed via SAP ArchiveLink.
The xSuite software automatically transfers the invoice data to SAP, within which the approval workflow begins. In this manner, almost 300 employees across all the company’s locations receive their documents for signing off. After all the approval steps have been performed, SAP FI receives the completed document for posting.
MM invoices: items are recognized and checked
As a retail company, the LUEG Group receives a quite high proportion (66 percent) of FI invoices. Invoices with PO references (MM invoices) are still a lot more straightforward. Here, the capture module reads individual items, e.g. for replacement parts, vehicle identification numbers, and delivery notes, and compares them with the relevant purchase orders and goods receipts. With the previous solution, this comparison required multiple mouse clicks, and it took a good minute to check an MM invoice. Now, it is done in a matter of seconds. “A quick visual inspection, and if everything looks okay, you press a button and the invoice is posted,” Schauenburg explains.
Early payment discounts up by 70 percent
Previously, moving from the initial workflow to the SAP system involved different media, and this disruption had to be handled by a single person. Now, however, the cockpit and monitor functions of xSuite Invoice Cube allow work packages to be distributed among several employees. What’s more, LUEG is saving money by only having to send half of its invoices to a scanning services provider. The company now pays its invoices quicker, and thanks to the new workflow solution, the automotive retailer has increased its early payment discounts by 70 percent.