Electronic Invoice Presentment and Payment (EIPP): Streamlining the Payment Process... Presented by: Scott Hesse August 9, 2010.

Electronic Invoice Presentment and Payment

(EIPP):Streamlining the Payment Process...

Electronic Invoice Presentment and Payment

(EIPP):Streamlining the Payment Process...

Presented by:Scott Hesse

August 9, 2010

Post Lunch wake up….Post Lunch wake up….Old McPayments had a farm.EIPP-OAnd on his farm he processed invoicesEIPP-OPaper was here and paper was there.. here a paper there a paper everywhere was

paper paper

Old McPayments had a farm.EIPP-OOn his farm he wrote many checksEIPP-OWrite them up, stuff them in. stamp them up, mail them outOld McPayments had a farm.EIPP-O

Old McPayments saw the lightEIPP-OHe knew ‘lectronics was the way to goEIPP-OE-Invoice here, Present and pay there, invoices gone, checks no more, ACH came

through the door

Old McPayments had a farm.EIPP-O

AgendaAgenda

Payments: Today Electronic Invoicing… A brief history. What is EIPP? What does EIPP offer organizations? Who needs EIPP? What is the cost of paper? How might EIPP integrate with a state’s current systems? How does EIPP work? Questions

Payments Today Payments Today

2003: U.S. Federal Reserve cuts check-processing offices in half; shrinkage continues.

2003: Check 21 Act: Stop the flow of paper checks.– Digital images of checks– Substitute checks

2004: Electronic payments outpace checks Electronic payments have doubled since 2000. Contactless technology

– Car key, camera, watch, mobile phone– Go-Tags– Digital wallets

Are cards needed?– Embossed letters no longer needed– No account number on card eventually

Goals: Speed up payments and reduce societal dependence on paper.

HistoryHistory

Electronic Invoicing began in the early 1960’s in the US.– The first iteration of EIPP came from the railroad

industry in the form of EDI. Retail leads the way. First UPC Code scanned in

Troy, OH in 1974.

First EDI standards developed in early 70’s with ANSI X12 standard being adopted in 1981

Emerging technologies… imaging, Internet, collaborative networks

What Is EIPP? What Is EIPP?

Online Bill Pay For Organizations

EIPP according to WikipediaEIPP according to Wikipedia

A collaborative web-delivered payment network Online bill pay for business transactions

Participants: Buyers (State/Agencies) Sellers (Suppliers) Third Party Stakeholders

All parties review and manage their transactions over the Internet

Program benefits equitably applied to all parties

What Does EIPP Offer?

EIPP BenefitsEIPP Benefits

Eliminate no-value touch points in the invoice receipt process

Control over same day invoice receipt and faster processing (maximize touch-less processing and routing)

Eliminate/reduce exception handling with Pre-payment Audits

Expand front-end discounts Faster payment processing best positioned for card

product payment, rebate and/or dynamic discounting Earn Procurement’s negotiated discount terms Generate incremental discount terms and rebates to

become profit center Value Add: Exception reporting for core resolution

Source: The Accounts Payable Network (TAPN), August 2010

Do you need EIPP?Do you need EIPP?

Who Needs EIPP? Who Needs EIPP?

Economic downturns/ Short-staffed/Budget shortfalls High percentage of paper (Invoices and/or Checks) Legacy Accounting/Finance systems Planned or currently implementing new ERP Multiple locations Limited or dated reporting capabilities High volume of transactions Complex Transactions: Data Capture

Line Item Detail (GL Account Number) 3-way matching (Order/Invoice/Receipt)

Fast Facts 1: The Cost of PaperFast Facts 1: The Cost of Paper

Paper is The Rule– 79% of invoices received manually– 63% of payments made manually

Significant Performance Improvement– Cost to process an invoice

– 2004: $34– 2006: $22– 2008: $14

In the past 2 years, role of A/P has become more strategic in 56% of agencies. 18 months ago, 40% of agencies believed A/P was playing a “more strategic” role.

Source: The Aberdeen Group

A/P Strategies for Success

October, 2008

Fast Facts 2: The Cost of Paper Fast Facts 2: The Cost of Paper

•Paper invoices cost 74% to 89% more to process than electronic invoices.

•Over 60% of agencies lack visibility into primary A/P spend and invoice data.

• 40% of agencies indicate they have the budget and intent to invest in A/P automation solutions in the next for 12 months.•Specifically, research by Aberdeen estimates that fully automated operations can save $10.87 per payment – approximately $1.1 million in savings for agencies processing 100,000 B2B payments per year.

Source: Aberdeen Group: The E-Payables Benchmark Report

Advancing Accounts Payable Automation, March 2007

How Does EIPP Integrate? How Does EIPP Integrate?

SupplierTrade Documents

Invoices

State/AgencyTrade Documents

Contracts, P.O.s, Receipts

A/P Data Electronically to State ERP

A/R Data to Supplier ERP

Exception Collaboration

Automated Prepayment AuditsState Business Rules

State Accounting Policy Compliance

On Demand, Networked, Internet Access Solution

Online Collaborative

Network

6- Payment with

Detailed Remittance data

7 - Analysis

EIPP Process Flow example EIPP Process Flow example

Buyer4 – Invoice

Approval

2 – Invoices

(electronic or p

aper)

3 - Audit

State or Agency

5 –Posting dataTo ERP system

Seller

1- Orders for Goods or Services

1b – Reference Doc Audits

(e.g. orders, receipts)

Shared Service or

EIPP Network

EIPP FeaturesEIPP Features

Invoice Lifecycle

Receive Receive, process & load all supplier invoices, paper or electronic

Present Present invoices electronically, including line item detail, in queryable format

Audit Identify billing errors prior to payment through automated business rules Add reference documents, such as orders or receipts, for robust line level audits

Approve Manage multiple levels of approval, as well as disputes & adjustments Enforce state/agency policies & maintain detailed audit trail

Pay Pay suppliers across currencies & payment methods via a single, electronic process

Post Automate and verify accounting code allocations before posting Load electronic payment & accounting detail into general ledger

Analyze Leverage robust data & tools for enhanced financial, process & supplier analysis

Where’s the puck???Where’s the puck???

A reporter was interviewing Wayne Gretsky and he asked: "Why are you always where the puck is?"

Wayne answered: "I'm not. I'm where the puck is going."

Electronic Invoice Presentment and Payment is where the “Payment Puck” is going!

QuestionsQuestionsElectronic Invoice Presentment and Payment (EIPP):Streamlining the Payment Process...

Electronic Invoice Presentment and Payment (EIPP):Streamlining the Payment Process...

U.S. Bank Scott Hesse, Corporate Payment Systems Public Sector

[email protected]

240-420-1992

U.S. Bank Scott Hesse, Corporate Payment Systems Public Sector

[email protected]

240-420-1992