ITM & SPS Commerce: Automated Invoicing Success

For almost 30 years, Independent Timber Merchants Co-operative Limited (ITM) has consolidated the buying power of New Zealand’s independent hardware store owners to be more competitive. The $1B NZD retailer is experiencing rapid growth but needed to automate its manual processes to scale for the future. When selecting a new ERP, Oracle NetSuite, the company also swapped out its previous EDI solution for SPS Commerce. The new solution offers a single source of truth for all operations and supplier management, including the automation of invoice processing via EDI. “The easiest part of automating our processes was the EDI solution,” said Seith Harrison, General Manager – Operations at ITM. “This is a credit to the local SPS team. They made our lives so much easier.” 

ITM’s Support Office is a shared entity that supports the co-op’s 90+ stores across New Zealand. One of the services they provide is centralized billing. Harrison’s team is responsible for processing all invoices for all store orders. Each store is independent and orders directly from suppliers, but the invoices are channeled through the Support Office. The co-operative retailer’s centralized billing vendors are guaranteed payment by the co-operative, and the retailer has the buying power and rebate structures that is on par or above that of competing corporate retailers.

Benefits of EDI and a New ERP

When ITM began overhauling its systems, they weren’t thinking about EDI. They had an offshore solution that was working. However, when the ITM consultants doing the new ERP implementation brought up EDI, they made a strong case to switch to SPS Commerce.

“ITM knows the benefits of EDI,” said Harrison. “We appreciate the efficiencies it delivers and the visibility to our orders. With SPS, we have access to local EDI experts who can manage and make changes on our behalf with ease.”

The company rolled out NetSuite and SPS Commerce Fulfillment at the same time. The deadlines were tight but EDI from SPS was straightforward and well-supported. “During our ERP rollout, there were many moving parts and partners,” explained Harrison. “The team from SPS made EDI the easiest part of the project and were amazing to work with.”

With a state-of-the-art ERP system, NetSuite, and EDI from SPS, the co-operative has a single source of truth governing all invoice transactions.

Automate Invoicing for Ease and Accuracy

ITM’s vendors were providing invoices in multiple formats to Central Billing, often requiring manual data entry into their systems. “Our growth path towards becoming a multi-billion dollar retailer required automation,” said Harrison. “Automated invoicing would replace all manual processes so our teams could focus on other operations and we could manage increasing volumes of invoices. We needed to scale and create a foundation built for our future.”

ITM has mandated its central billed vendors to be EDI-compliant by November 2020.

“We simply can’t keep operating with manual process,” continued Harrison. “The inaccuracies and inefficiencies will hinder our growth. Now when we receive an invoice with errors, such as when the pricing and units of measure don’t align, it’s flagged in the system. This invoice is returned to the supplier to resolve. Prior to automation, we would have manually corrected the invoice. Today, just like other retailers, we simply don’t have the time and will require our vendors to step up.”

The invoicing process is fully automated and ready to scale to manage hundreds of thousands of invoices, if necessary, to support ITM.

Manage Vendors to a Higher Standard

ITM has more than 360 centrally billed vendors that invoice through the co-operative’s central billing process. They were migrated over to the new, automated process quickly after deploying NetSuite and SPS.

“Today, ITM has the systems and processes that are on par or better than our competitors,” said Harrison. “We expect our vendors to perform well and comply with our requirements. We have established business rules that will continue to evolve with our business. The team at SPS is helping us as we make changes to improve our operations.”

While switching to full-automated invoicing, ITM ran across vendors of all sizes, even some of its largest, that were delivering invoices requiring manual entry or had errors. Automated invoicing has empowered ITM to address these issues efficiently, mitigating their risk of over-payment and improving their business continuity.