Enter Your Details to Register

Please enter your official e-mail ID. Kindly do not use a personal ID like GMail, Yahoo etc.,
Please do not enter +91 or 0.
Image CAPTCHA
Enter the characters (without spaces) shown in the image.

Enter Your Log-in Details

Close

How Atul Automated Accounts Payable Process with Zero Capital

A case study on ERP in Manufacturing
Rajat Sharma
Rajat Sharma

President-IT, Atul Limited

This entire initiative was achieved with zero capital investment and was live within 48 days.

Executive summary

Manual processes created lags in Atul’s accounts payable process, resulting in the loss of Rs 3 crore of Cenvat claims a year. That wouldn’t do. 

The Organization: There’s one distinction that Atul Limited, part of the Rs 20 billion Lalbhai Group, has that no other company in India can have—ever. Atul, which produces agrochemicals, pharmaceuticals, aromatics, polymers, etcetera, is India’s first private-sector enterprise to be inaugurated by the country’s first prime minister.

The Business Case: Like most organizations, Atul’s accounts payable (AP) process was built on manual processes. The process kicked off when a shipment of goods—like raw material, for instance—arrived at Atul’s factories and was received by a store clerk who checked it for quality and quantity. The clerk then inputted its details into Atul’s ERP system, and churned out a goods receipt note (GRN). 

Every so often—but not often enough—the invoices for the material accompanied by their GRNs were hand delivered to the accounts payable desk, whose staff then inputted details into its system and created an accounts payable invoice. This new invoice was then sent to the company’s Cenvat (Central Value Added Tax) reversal cell, whose job was to reclaim Cenvat.

But many manual processes created a delay of up to 15 days between the time a store clerk received goods and the Cenvat team could reclaim Cenvat. It also held up vendor payments. “There was a delay in payment of 500 vendor invoices per month (out of a total of 15,000) due to the physical movement of invoices from the stores desk to the accounts desk,” says Rajat Sharma, president-IT, Atul.

Because Atul couldn’t book reclaims faster, it was losing Cenvat claims worth Rs 3 crore a year from its books.

The Project: To get around the challenge, Sharma and his team integrated the accounts payable module of Atul’s ERP with an automated invoice scanning system. The solution cleansed the accounts payable process of manual delays and mistakes in entry—ensuring that invoices are sent to the accounts payable team instantly, and that AP invoices are sent to the cenvat team swiftly. 

“Our IT team got in touch with Canon’s support and programmed the plug-ins and interfaces of a Canon multi-function device to automate the scanning, conversion and storage of the invoice,” says Sharma. “This entire initiative was achieved with zero capital investment and was live within 48 days.” 

Sharma also put in place a governance framework which ensured that delays within the accounts or cenvat teams—potentially affecting Atul’s ability to claim cenvat—were escalated. 

The Benefits: The solution added Rs 3 crore worth of Cenvat credits in Atul’s books. Although this was a one-time addition, the process also introduced long-term benefits. The visibility of invoices at the accounts payable desk increased incredibly resulting in multiple benefits. First, the number of misplaced invoices or related documents shrunk to zero from about 50 a month. The increased visibility ensures that payments to suppliers are made faster, shrinking late payment charges and increasing early payment bonuses. And it also allowed for the faster identification of payable liabilities.  

Mallik Sundaram
Mallik Sundaram

Mitra Biotech

Mitra Biotech Prescribes the Perfect Cancer Drug Using Data Analytics

A technology platform that  uses data analytics allows Mitra Biotech to find the most effective cancer drug for specific patients in seven days—exponentially faster than traditional methods.

Technology:
Predictive Analytics
Industry:
Pharma & Healthcare
Amitabh Misra
Amitabh Misra

Snapdeal

Snapdeal Revamps its Database to Augment Speed and Scalability

As Snapdeal’s business grew 200 times, it needed its IT systems to scale and support its rapid growth. How its CIO made that happen.

Technology:
Database
Industry:
Retail
Virender Pal
Virender Pal

SpiceJet

How SpiceJet's CIO Found an Innovative Way to Lower Staff Costs

The intriguing story of how SpiceJet’s CIO found an ingenious way to save costs by limiting IT support staff—from what could have been 300—to 30.

Technology:
Infrastructure
Industry:
Logistics & Trasportation

close