Animal Supply Company modernizes invoice processing with Neudesic’s Document Intelligence Platform, powered by Microsoft analytics and AI

When Animal Supply Company (ASC) grew its wholesale pet supply distribution business to $800 million, it decided it was time to bring AI into invoice processing. The company’s legacy system was not conducive to analytics and automation, and it necessitated a transactional approach to vendor relationships. So ASC collaborated with Microsoft partner Neudesic and used its Document Intelligence Platform (DIP) solution to transform the invoice processing experience, saving money and freeing up expertise for further innovation.

Shifting from transactional to relational accounting

ASC has a national presence, with 900 employees delivering to all retail channels and more than 10,000 locations. After growing through acquisitions, the company set out to modernize a host of legacy systems so that it could ship innovative, healthful products at scale while building robust relationships with more than 150 vendors.

In ASC’s legacy invoicing process, analysts had to complete a three-way match with a mix of electronic and paper documents and digital images sent as PDF invoices. “It was very difficult to do all that in a consistent time frame,” says Jerry Walker, Chief Financial Officer and Chief Information Officer at ASC. Moreover, the laborious nature of finding a match meant that the team had to tolerate invoicing discrepancies that increased its costs. With 4,000 monthly invoices and more than $500 million in inventory purchases annually, even a small amount per order translated to a considerable sum.

Additionally, manual processes were keeping the invoice processing team in a transactional mode of operation. Team members had to communicate extensively with vendors to verify details and find a three-way match on every order. This constant back-and-forth ate away at the time needed to resolve genuinely complex issues like disputes or exceptions on invoices. It also eroded the basis of a positive relationship: the ease of doing business.

Enhancing productivity with Microsoft Azure

After assessing the options, ASC chose to adopt Neudesic’s DIP solution, which makes it simple for nontechnical users to apply AI and intelligent optical character recognition to replace the manual, time-consuming process of extracting data from business documents. Neudesic’s DIP solution runs on Microsoft Azure cloud computing and uses Azure AI.

This wasn’t the first time ASC and Neudesic had worked together. In fact, they had a six-year history of collaboration, including the development of services to monitor and connect applications to enterprise resource planning (ERP) solutions on Azure. In 2020, the two teams took the same approach to the business intelligence space. “We now have full data lake data warehouse capability on Azure,” says Walker. The focus on invoice processing is just the first part of a new modernization drive that ASC and Neudesic launched together.

The mission was clear. “The goal was to have AI read 80 percent of the invoice dollars that we process,” says Walker. ASC uses Neudesic’s DIP solution to meet this mandate by comparing invoices to ERP data and matching invoices, orders, and receipts. In turn, this frees up employee time and makes it easier to focus on higher-value tasks. “Within 12 months, we are exceeding the expected return on investment,” says Walker.

Automating incrementally with the Document Intelligence Platform

The project’s return has come in many forms. By extending AI to automate routine tasks, the development team has improved quality and systematically reduced tolerances, delivering more than $500,000 annually in cost savings as invoicing becomes more precise. The reduction of low-value work has also freed up 50 percent of ASC’s invoicing experts, allowing them to focus on working through exceptions and building stronger relationships with vendors. “The invoice processing team members are really excited about the Document Intelligence Platform solution from Neudesic. I can hear it when I talk to them,” says Walker.

As the project started, Neudesic recommended an incremental approach in which the ASC team would first automate the invoicing process for high-volume vendors with more simple billing processes and then move on to vendors with more complex documentation. With this step-by-step strategy, ASC adapted flexibly to the diversity of its suppliers.

Every vendor has its own invoicing and exceptions process, so ASC had to adjust to each unique relationship. “As team members became more experienced, they had more confidence, making it easier to implement new vendors as time went on,” says Walker. Now, ASC is close to hitting its goal of having AI read 80 percent of its invoice dollars.

Applying Azure AI across the distribution process

As ASC nears its goal with the DIP from Neudesic, it is looking to reap similar benefits at all phases of the distribution process. With a range of sensitive food products, ASC needs to ensure the quality and safety of each delivery. The company plans on using Azure AI to increase the efficiency of logistics systems by reducing cycle time and bringing fresher products to pets all over the nation. Both mechanical and software automation are on the table for the next phase of ASC’s utilization of Azure.

Reflecting on the effort, Walker says, “Now that we’ve automated invoice processing on Azure using Neudesic’s Document Intelligence Platform solution, we’re able to reduce the cycle time, improve quality, and boost throughput capability. Ultimately, it makes it easier to do business with us.” That brings ASC one step closer to being the distributor of choice for its vendor and retail partners.