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NASCMarch 21, 2007

MISSISSIPPI E-INVOICING

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NASC March 21, 2007

HOW WE GOT HERE

E–INVOICING PROJECT

BENEFITS

STATUS

LESSONS LEARNED

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HOW WE GOT HERE

Discovery of PayMode®

What is PayMode®?

Vendor E–Pay Timeline

Current Statistics

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DISCOVERY OF PAYMODE®

Gartner research referenced PayMode®

Checked out the Web demo

Answered the phone on vendor follow-up call

PayMode® is now a Bank of America Global Treasury

Services product

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NASC March 21, 2007

WHAT IS PAYMODE®? Electronic Payment and Remittance Processing

Links detailed, digital remittance information to payments

Is broadly accepted by vendors, suppliers, other payees

Works within any system’s environment and business rules

Works with any bank

Enables real-time reporting

State-of-the-art security against fraud, theft and misuse

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NASC March 21, 2007

VENDOR E–PAY TIMELINE 9/1/2002 Project Start for PayMode® Payer Invoice Management

Service 10/1/2002 Initial Vendor Implementation Was Conversion of

Existing EFT Vendors

9/22/2003 Expanded Remittance Data Provided Online to Vendors

10/16/2003 Implemented and Required for Medical/HIPAA Payments

1/1/2006 Administrative Rule Effective for Mandatory Electronic Payment Of Vendors

– New Vendors Given 60 Day Window to Enroll or Obtain Exemption

– Phased in Implementation of Existing Vendors

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STATISTICS FOR VENDOR E-PAYMENTS

February 2007 Vendor E-Payments were over 50% in both payment count and dollars.

** YTD

9.40%

20.39%

23.69%

39.51%

34.26%

44.28%

38.03%

47.16% 46.78% 47.60%

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

FY2003* FY2004 FY2005 FY2006 FY2007**

Percentage of Payments Made/Dollars Paid by FY

Count Dollars

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E–INVOICING PROJECT Engagement Background Objectives Summary of Proposed Services Requirements Definition Programming & Testing Pilot Agencies/Vendors Statewide Implementation Training

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ENGAGEMENT BACKGROUNDIn February 2004, the Mississippi Department of Finance and

Administration engaged Bank of America’s PayMode® team to

provide professional services for the analysis and documentation

of the State of Mississippi’s requirements for electronic invoice

processing. This engagement had several goals:– Determining Mississippi’s needs with respect to electronic

invoice processing – Identification of potential benefits that could be achieved

through PayMode electronic invoice processing– Documentation of Mississippi’s high level business requirements

for PayMode invoice processing

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NASC March 21, 2007

OBJECTIVES Eliminate labor intensive paper invoice handling Automate the capture of remittance data from the invoice Automate the invoice to PO matching process Route invoices to the appropriate users for approval Support vendors’ detailed remittance data needs without

requiring all the detail to be fed to Statewide Automated Accounting System (SAAS)

Reduce time spent responding to vendors’ payment inquiries

Capture and retain appropriate levels of invoice and payment data to meet ongoing research and audit requirements

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SUMMARY OF PROPOSED SERVICES Solicitation of Mississippi’s PayMode® enrolled vendors to

send electronic invoices through PayMode® for transmission to SAAS

A web-based user interface to view electronic invoices sent by vendors enrolled for the invoicing service

A web-based “manual” invoice template for vendors who may not be “electronically” enabled

Daily file transmissions to SAAS of all approved electronic invoices

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SUMMARY OF PROPOSED SERVICES(continued)

Development of invoice business rules to support Mississippi’s approval and routing process

Ability to route invoices and restrict user access by agency

Email notification to designated users of pending invoice approvals and invoices exceeding the state’s aging requirements

Daily transmission of PO file from SAAS to PayMode® for matching

Email notification to vendors of rejected/disputed invoices

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REQUIREMENTS DEFINITIONS Vendors submit electronic invoices to PayMode® SAAS supplies PayMode® with open PO data PayMode® processes electronic invoices

– Invoices are edited using established business rules, including matching them to PO data

– Invalid invoices are routed to the vendor’s users for correction and resubmission or retraction

– Valid invoices are routed to the appropriate agency users for approval or other disposition

Agency users review and approve invoices

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NASC March 21, 2007

REQUIREMENTS DEFINITIONS (continued) PayMode® sends a file of approved invoices to SAAS An electronic voucher (EV) is created for the agency The agency enters/changes and approves EVs DFA reviews and applies final approvals DFA submits payments to PayMode® for approved

EV’s PayMode® processes payments electronically, flags

invoices as paid, and provides vendors with A/R information

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PROCESS (Located in Training Document 5701)

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PROGRAMMING & TESTING 4 sessions of prototyping & review

Usability testing

Development – By PayMode® of online eInvoice system

– By MS for interface from eInvoice system to SAAS of new document type (EV) and invoice tables

Quality assurance testing by PayMode® and by MS

User acceptance testing

End to end testing

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PILOT AGENCIES/VENDORS

Pilot Implementation October 1, 2006

4 agencies selected as pilots– DFA, SPB, ITS, SDE

Vendors common to pilot agencies selected as pilot vendors

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STATEWIDE IMPLEMENTATION

December 1, 2006

Controlled vendor enrollment

Training for agency staff

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TRAINING By PayMode®:

– Pilot agencies– DFA-OFM (pre-audit control staff)– DFA trainers (Train the Trainer)– DFA administrators (security set up)– Billers

Direct Marketing contacted by mail follow-up training document WebCast

By DFA: Other agencies (still in process)

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TRAINING DOCUMENTATION

5000 SAAS

– 5100 User Workbooks

5113 –Accounts Payable Electronic Invoice (EV)

– 5700 PayMode®

5701 – PayMode® Payer Invoice Management

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NASC March 21, 2007

TRAINING DOCUMENTATION PATH

http://www.dfa.state.ms.us

DFA Offices

MMRS

MASH – Customer Support

MMRS Training Documentation (https://www.mmrs.state.ms.us/MMRS/Training_Documentation.nsf/Main?

OpenFrameset)

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BENEFITS Vendors

Agencies

DFA – Fiscal Management

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BENEFITS TO VENDORS

Saves time and money

Fits with existing systems

Payment includes all of the detailed information from an invoice

Real-time access to invoice processing status

It is easy to sign up and get started

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NASC March 21, 2007

BENEFITS TO AGENCIES Leverages the current PayMode® vendor electronic

payment solution

Eliminates labor intensive paper invoice handling

Captures electronic remittance detail from the invoice

Automates the invoice to purchase order matching process

Automatically routes invoices to the appropriate users

Support of vendors’ detailed remittance data needs without requiring all the detail to be fed to SAAS

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NASC March 21, 2007

BENEFITS TO AGENCIES (continued)

Reduction in time spent responding to vendors’ payment inquiries by increasing the number of payments correctly applied to accounts receivable

Capture and retention of appropriate levels of invoice and payment data to meet ongoing research and audit requirements

Maximization of vendor acceptance through the use of PayMode® proven, highly successful vendor adoption program

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NASC March 21, 2007

BENEFITS TO DFA NO paper Only 1 report to review each day Ability to view both Invoice (PayMode®) and

EV (SAAS) simultaneously No warrants to distribute or reissue if lost Ability to track discounts taken or missed Will allow DFA to audit transactions both

randomly and based on pre-determined matrix

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PRE - AUDIT SELECTION MATRIX

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STATUS Invoices received in PayMode® = 96 Invoices paid in PayMode® = 61

Agencies enrolled in PayMode® = 29 Agencies trained = 62

Vendors enrolled in PayMode® = 43 Vendors in process of enrolling = 10 Vendors contacted = 59 Vendors declined/did not respond = 6

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NASC March 21, 2007

AVERAGE PROCESSING TIMES TO DATE

October 1 – November 31

– Pilot period

– Receipt to payment ranged from 4 days to 28 days

– Average of 11 days (including the highs and lows)

December 1 to March 1

– Statewide implementation

– Receipt to payment ranged from 3 days to 23 days

– Average of 9 days (including highs and lows)

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NASC March 21, 2007

LESSONS LEARNED

Smaller training classes

Expand pilot processing time before

going statewide

Perform more extensive testing

[email protected]

P. O. Box 1060Jackson, MS 39215

601-359-3405

Leila Malatesta, Director

Office of Fiscal Management

P

Economy & Finance

paymode invoice processing

vendors payment inquiries

approval support vendors

electronic invoiceprocessing

payment data

appropriate levels of

approved electronic

manual invoice template