How ESMS Cut Admin Time In Half With AP Automation
ESMS (Erskine Stewart's Melville Schools) is a unique family of Independent Schools, located in Edinburgh. With over 600 staff members, it provides education to children across three distinct schools. Beyond academic facilities, ESMS manages a diverse estate, comprising of playing fields, commercial spaces utilised for catering and events, and even an onsite church.
Recognising the need for a more streamlined solution to use alongside passFINANCE, a WCBS product, the finance function turned to Lightyear. The decision stemmed from the desire to uphold values of fostering strong communication and optimal management of resources amongst staff; but also to reduce manual effort, enhance purchasing controls, and improve reporting capabilities.
The transition to Lightyear from a previous accounts payable system was prompted by its susceptibility to error and cumbersome user experience, which still required a lot of hands-on work to function.
The challenges facing ESMS in 2024
We spoke to Lesley, Finance Manager at ESMS, who shared the perspective of her 7 person finance team, who are "heading into challenging times". With external pressures facing many Independent Schools, such as economic downturns, upcoming VAT implications, and changes to student enrolment patterns, threats to income streams and cash flow are the focus in 2024.
"We have the very real possibility of VAT coming in, and it's been a big driver in parents holding off on enrolling their children into the next stage of school because it's such a big commitment. We're concerned about budgets and keeping fees down as much as possible." - Lesley, Finance Manager.
Furthermore, as a result of such multifaceted operations, ESMS grappled with complexities in financial management, exacerbated by its merger of three schools and an additional commercial arm. While ESMS reports as a single entity for statutory purposes, internal management requires separate reporting structures. This necessitates meticulous coding and departmental tracking, which Lightyear can automatically take care of via sophisticated automation capabilities.
ESMS encounters admin burdens, especially during peak periods, such as fee billing cycles. Managing thousands of fee payments and investigating direct debit complications, only adds to the pressure of manual processes involved in handling invoices and purchase orders. Navigating AP processes manually, inevitably leads to inefficiencies, errors, and a lack of control.
"Fee billing is all hands on deck from June to August when children are being registered. We need incredibly tight controls on POs around this time too because cash is naturally low, but expenditure is high." - Lesley.
Reducing The Manual Effort In Finance Processes
"What we wanted to get out of Lightyear was speed", commented Lesley who sought to free her finance team from unnecessary manual effort. By implementing accounts payable automation, the burden of typing in purchase order numbers, balances and due dates on an invoice is gone - Lightyear automatically extracts invoice data and processes it.
This has also meant that ESMS has a digital copy of every AP document that can be found with just one click. Communication between approvers and staff outside the finance function has also become easier as "we make use of the internal communications tool in Lightyear to tag users, sending notifications and nudges if things haven't been signed off".
Additionally, using notes on invoices within Lightyear is helpful. They add important context for Lesley before she approves any spending. She explains, "If someone wants me to approve an invoice, you have to tell me why you're raising it and why you want to spend budget on it!"
Introducing Seamless AP Reporting
What's brilliant for Lesley's role as Finance Manager, is the impact that AP automation has on reporting. Now, Lesley says "I see our invoices, their total value, what's the hold up in getting them through for payment, and I can easily send reminders."
Without AP automation, many schools, including ESMS, struggle to see what spending they have approved. With such tight budgets and restrictions on cash flow, having knowledge of spend accruals is vital.
Tightening Purchase Order Controls
With that said, Lesley has been able to take greater control of purchase orders and has an overview over their approval in Lightyear.
"Automated purchase orders have provided us with an essential level of control. For example, during summer, we centralise PO approval so that we can manage cash flow." explains Lesley.
During the summer months cash flow is reduced but expenditure is high due to site repairs, mass stock ordering for teachers and so on. Therefore Lightyears PO functionality which enables automatic routing of approvals based on value or specific staff member helps to take control during times of inflation.
Taking The Stress Out Of Audit
As an independent school, a vast team of people may interlink with the finance process, especially when it comes to auditing. Lesley notes that having the invoice PDF attachment in Lightyear means it's easy to download and send it to another person. With the option for read-only access to Lightyear, dealing with auditors is no longer time-consuming, nor does it require a busy team's focus. Since every action in Lightyear is tracked, the finance function and auditor can see a complete audit trail of every document. This is fantastic for taking the stress out of essential admin work and making compliance maintenance a quick tick.
A Supportive Implementation Experience
Rebecca, the representative from Lightyear, played a pivotal role in facilitating the transition. She ensured that finance personnel and broader staff members were proficient in utilising the new system through comprehensive training sessions and informative resources.
"Rebecca was a star; she ran excellent training and handled the natural fear of change that some of our staff had, really well." - Lesley.
The Results
By implementing customisable, intuitive accounts payable automation software to use alongside passFINANCE, ESMS has cut admin time in half and avoided "repetitive and error-prone" work. This has helped the finance team to avoid recruiting another administrator and allocate that spend elsewhere.
Due to extensive time savings, ESMS spends more time analysing their Purchase Ledger activity and is "more proactive" and responsive in their work as a result of better insights and data. Having more time has meant that they can continue to save cash by bringing more elements of the finance function in-house, which were previously outsourced.
Overall, Lesley and her finance team at ESMS no longer spend their valuable time chasing invoices or manually entering data (there's enough of that during registration periods) and feel their credibility on invoices has dramatically increased.
"We have much greater credibility on invoices in that we know why things haven't been paid, we have proof as to what happened and why, and we can communicate this easily with teachers," said Lesley.
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