CASE STUDY: RENT-A-CENTER, INC.
OVERVIEW
Rent-A-Center, Inc. [NASDAQ: RCII] is the largest rent-to-own operator in the United States. Headquartered in Plano, Texas, Rent-A-Center operates more than 2,600 company-owned stores nationwide and in Puerto Rico. ColorTyme, its subsidiary, is a national franchisor of rent-to-own stores, which has 326 franchised rent-to-own stores, 314 of which operate under the trade name of "ColorTyme" and the remaining 12 of which operate under the "Rent-A-Center" name.
The stores generally offer high-quality, durable products such as home electronics, appliances, computers, and furniture under flexible rental purchase agreements that typically allow the customer to obtain ownership of the merchandise at the conclusion of an agreed-upon rental period. These rental purchase agreements are designed to appeal to a wide variety of customers by generally allowing them to obtain merchandise that they might otherwise be unable to obtain due to insufficient cash resources or a lack of access to credit. These agreements also cater to customers who only have a temporary need, or who simply desire to rent rather than purchase the merchandise.
Rent-A-Center operates in all 50 states and Puerto Rico. The Accounts Payable department receives about 2,300 paper invoices daily. An additional 1,700 invoices are imported electronically daily.
CHALLENGE
Rent-A-Center required a document management solution to solve a variety of business problems.
(1) They continuously have tax auditors reviewing their sales and use tax documents, as well as state tax returns. They are asked to provide invoice copies as documentation for several items on each audit. Paper invoices are kept onsite for one year, and then in offsite storage.
(2) They have a month-end P&L review where each cost center in the company reviews their expenses and questions amounts charged to their ledger that they may not recognize.
(3) They currently batch file their invoices. When a vendor issue arises where they need to review all payments made to them for any length of time (month, year, etc.), it is extremely time-consuming to look up batch numbers, pull the respective boxes (which may be onsite or offsite), and search for invoices to make the appropriate copies.
(4) Rent-A-Center did not want to increase labor in the Accounts Payable department with the addition of a document imaging solution.
SOLUTION
Document imaging and unstructured forms processing technologies were the solution. Rent-A-Center enlisted the design, development, customization and implementation services of Business Imaging Systems, Inc. (BIS). The BIS team helped Rent-A-Center implement a department-wide solution that consisted of the following products:
- One BÖWE Bell+Howell 8080D high-volume scanner with Kofax VirtualReScan
- Kofax Ascent for Payables
- EMC Documentum ApplicationXtender with BIS-Lawson Retrieval
- BIS MasterScan
The solution captures such fields as vendor name and address, invoice number, invoice date, amount due, account number, and the store number read from the store's approval stamp. The GL account code is auto-populated based on the vendor number.
BIS assisted Rent-A-Center from start to finish, and they continue to provide ongoing professional services and maintenance. Kofax Image Products, Inc. (Irvine, Calif.) was also a valuable partner throughout the project. The Kofax team provided product design and other related services, and worked closely with BIS to ensure a smooth transition.
Ultimately, the solution provided by BIS was a better solution for Rent-A-Center than what they were originally looking for. The technologies were far more advanced, accurate, and easier to implement and use than management had anticipated.
RESULTS
Rent-A-Center has received a variety of benefits since the rollout of this new technology. Two of the company's biggest benefits are labor efficiencies and significant cost savings. Invoice processing time is cut almost in half for regular invoices, and by about 75% for their "high-volume vendors." The Accounts Payable department reduced labor by one supervisor and ten staff in less than six months. And they have decreased or eliminated their office supplies used to store batch files. They had 42 filing cabinets; now they don't need any.
Additional benefits include:
(1) Rent-A-Center can now quickly and efficiently pull and copy invoice documentation for sales and use (or state/IRS) tax audits without losing processing time on current tasks or deadlines. Such documentation can be pre-mastered to portable media using MasterScan, and tax auditors may take such information with them. This has reduced staff time in retrieving invoices as well as storage costs to retrieve a box and then re-offsite it once the support has been found. Also, the number of current invoices placed on hold and not keyed for payment has reduced, because the effort required to retrieve other invoices is no longer a labor-intensive task.
(2) Easily accessing invoices through the Lawson System via the BIS-Lawson Retrieval feature, users may retrieve any documentation stored in the ApplicationXtender database. All information is at the staff's fingertips. This has reduced staff time in retrieving invoices, and has allowed other interested Lawson users at the home office to view supporting documentation for items posted in the general ledger.
(3) Having the ability to easily retrieve and print off all invoices paid for a particular vendor within a definable timeframe has reduced time involved in retrieving invoices from a variety of locations. They can now access invoices in real time.
(4) Because Rent-A-Center can automatically extract key fields from invoices, they have significantly reduced the labor required to enter the data into the ApplicationXtender and Lawson systems. Invoice data entry time has reduced by 50% to 60%. They have reduced staff by 11 employees in the Accounts Payable department, including one supervisor. Accuracy has also increased dramatically, as manual data entry has been significantly reduced, thus eliminating many keying errors.
Rent-A-Center anticipates that they will achieve ROI for this project within the first 18 months. Through reductions in headcount, labor, invoice retrieval time, etc., they began achieving a significant return on their investment from the onset of the implementation.
OTHER DEPARTMENTS
This project within the Accounts Payable department has been so successful that 15 other Rent-A-Center departments have begun using similar solutions. BIS has helped these other departments use document imaging and management technologies to streamline their current operations. In each instance, BÖWE Bell+Howell or Canon high-volume scanners have been used, along with EMC Documentum ApplicationXtender and/or Kofax Ascent Capture.
Some of these solutions include:
- Payroll: scanning and auto-indexing 13,000 timecards per week
- Purchasing: scanning product order forms and specialized reporting
- Legal: scanning case files using the Bates numbering system
- Advertising: scanning and versioning ads, and archiving critical e-mail content
- Loss Prevention/Risk Management: scanning claims forms
