Transform the AP Process Now: Go Paperless and Maximize ROI with AP Automation! The Accounts Payable Channel 2100 RiverEdge Parkway, Suite 380 Atlanta, GA 30328 Contact: [email protected] 866-827-6389 770-984-1184 www.TheAPChannel.com
Mar 17, 2016
Transform the AP Process Now:
Go Paperless and Maximize ROI
with AP Automation!
The Accounts Payable Channel
2100 RiverEdge Parkway, Suite 380
Atlanta, GA 30328
Contact: [email protected]
866-827-6389
770-984-1184
www.TheAPChannel.com
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©2011 Financial Operations Networks LLC
Today’s Presenters
Judy Bicking, APMFormer Global Director, Accounts Payable European Project,
Johnson & JohnsonAP & AR Best Practice Consultant and
Owner of Island Decor & More / Ship to Shore Home Decor
Sushmitha KokaSr. Director for Product Marketing, ADP
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©2011 Financial Operations Networks LLC
What is the
Goal of AP?
• ENSURE: on-time, accurate payments
• Compliance with Internal Controls— Eliminate Losses
• Lost Invoices
• Lost Discounts
• Duplicate Payments
—Minimize waste• Handling the same invoice over and over (touch it once)
• Handling multiple copies of an invoice
• Responding to inquiries
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©2011 Financial Operations Networks LLC
What is the
Goal of AP? (Cont’d.)
• Safeguard assets/Prevent unauthorized use or
misappropriation of cash
—Fraudulent Invoices
—Ensuring contract pricing matches purchases
—Receiving invoice directly from supplier
—Appropriate approvals
—Three way match
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©2011 Financial Operations Networks LLC
Issues with Manual
Paper Process
• Lost Invoices (The largest and most perplexing problem
an AP department faces is lost invoices.)
• Difficult to audit against contract prices
• High Processing Cost
• Labor intensive closings procedures
• Process prone to many errors
• Duplicate invoices = Duplicate Payments
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©2011 Financial Operations Networks LLC
Issues with Manual
Paper Process (Cont’d.)
• Can damage:
—Companies’ credit score
—Supplier relationships
• Lost Cash Discounts
• Jeopardizes Internal Controls
• Fraudulent invoices can get through
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©2011 Financial Operations Networks LLC
Four Largest
AP Headaches
1. Receiving the original invoice
2. Finding the invoice once it is received
3. Lack of receipt for 3-way match (80% of mismatches)
4. Late Payments
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©2011 Financial Operations Networks LLC
Four Largest
AP Headaches (Cont’d.)
1. Receiving the original invoice—Largest bottleneck in the invoice process
— Invoices paid late
—Lost discounts
—Late fees
—AP’s reputation
Buyer
Requestor
Approver
AP
Supplier
P
A
S
T
D
U
E
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©2011 Financial Operations Networks LLC
Four Largest
AP Headaches (Cont’d.)
2. Finding the invoice once it is received
―I need you to fax me a copy
before I can help you‖
Here, you take it.
NO you take it….
Causes Duplicate Payments
Perception: AP is out of control…
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©2011 Financial Operations Networks LLC
Four Largest
AP Headaches (Cont’d.)
3. Lack of receipt for 3-way match
Case Study reflected:
80% of mismatches
caused by
Lack of Receipt
99.9% were
actually received
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©2011 Financial Operations Networks LLC
Four Largest
AP Headaches (Cont’d.)
4. Late Payments—Shipments on hold
• affect production, projects, research…
—Terms removed
—Companies’ Credit Score
—Late fees and penalties
— Impaired Supplier relationship
— Impaired Buyer/Requisitioner relationship
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©2011 Financial Operations Networks LLC
Poll Question
Where do you stand with regards
to automating your invoice and
payment management processes?
1.We are already highly automated.
2.We are currently deploying a solution.
3.We are considering implementing a solution.
4.We have no plans of automating in the near future.
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©2011 Financial Operations Networks LLC
Why Invest in AP?
• AP is responsible for the company’s #1 asset:— CASH
• Bring P2P under control:— Drastically improved cycle time
— Invoices paid on time
— Capture discounts
— Accurate closings and Financial Reporting
— Approvals to the appropriate person
—Mismatches resolved by appropriate person
— Documented workflow
— Implement Spend Management
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©2011 Financial Operations Networks LLC
Number One
Best Practice
• Research will reveal that e-Invoicing with workflow is
the number ONE best practice
• It eliminates:—Paper
—Entering data into the AP system
—Lost invoices
—Data entry errors
—Mismatches
—All associated costs
—AP as being the cause of all late payments
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©2011 Financial Operations Networks LLC
Benefits to e-Invoicing
with Workflow• Accurate & Timely Payments – invoice paid on time from 45% to 95%
— Cost for payments made one day early
— Earned discounts
• Reduce cost— Cost per invoice ranges from $2-$20. e-Invoicing can be as low as pennies!!!
— Soft savings = time
— Hard savings = people, equipment, material, rent, postage
— Opportunity: discount gained, improved supplier relations• AP Heads: AP is very labor intensive (salary/benefits)
• AP department – sq. ft. for staff
• AP invoice storage— Space in sq. ft.
— Number of filing cabinets
— Filing Supplies (folders, hanging folders, labels, etc)
• Copy Machines (make copies to mail – approvals/problem resolution)
• Postage (sending invoice out for approvals, discrepancy review)
• Telephone (cost per line, outbound calls, 800 numbers…)
• Fax machines and their phone lines
• Company mailroom and AP’s mailroom
• Shredding invoices >7 years (protects company information)
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©2011 Financial Operations Networks LLC
Benefits to e-Invoicing
with Workflow (Cont’d.)
• Reduce cost (Cont’d.)
— Time: Eliminates/reduces manual labor• Opening & sorting invoices (every supplier has different terms and conditions)
• Looking for the invoice by AP, Buyer, Requisitioner, Tax, GL, Proj Acct, Marketing, Lawyers…
• AP Processor keying data several times (3 – 5 copies)
• Discrepancy clerk resolving mismatches
• Check Processor (insist on EFT)
• Customer Service, buyers, requisitioners on phone resolving inquiries
• Manually routing invoices for AP, company mailroom, requestors, buyers, suppliers— Approvals
— Discrepancy resolution
• Rekeying data. Multiple invoices (3-5 copies per invoice)
• Decision making – overriding terms, ignoring problem resolution, easy vs. hard
• Filing and re-filing the invoice at every stage of the process = lost invoices
• Best Practices: header match, negative receipt tolerance…
• Walking invoice to next step— To Vendor Maintenance – update the VM record
— To buyer – discrepancy resolution
— To Tax Department – for Sales & Use Tax or VAT questions
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©2011 Financial Operations Networks LLC
Benefits to e-Invoicing
with Workflow (Cont’d.)
• Improve productivity (inv/assoc (15,000 - 180,000 yr.)
• Rapid resolution of mismatches (80% receipt; 15% price;
5% quantity)
—Workflow sends to appropriate person
—Reflects aging per queue
—Escalates issues not attended to in xx number of days
• Reduce duplicate payments (3 - 5 copies of invoice)
• Major reduction of customer and in-house payment inquiries
• Audits completed quickly & accurately: (Reduce/eliminate
fines and penalties)
—Sales & use tax audits/ W9s/1099s /1042s and IRS audits
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©2011 Financial Operations Networks LLC
Benefits to e-Invoicing
with Workflow (Cont’d.)
• Improve AP Cycle time: invoice recorded within 1 – 3 days
vs. 30 – 320 days
—Accurate monthly closings & Financial Reporting – NOT
Labor intensive !!
—Accurate budgets
—Discounts and rebates
— Improves Cash Flow DPO
—Respond to inquiries first time – invoice tracked from day
one – self service
• Cash Flow Management
—Committed spend (Pre-age trial balance)
• Eliminate process flow issues
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©2011 Financial Operations Networks LLC
Benefits to e-Invoicing
with Workflow (Cont’d.)
• Accurate invoice data = proper payments: not over or short/too early or late
• AP viewed as a Professional Business Partner— Satisfied suppliers, buyers, requestors
• Price negotiation – Spend Management: Volume to one supplier (actual vs. estimated)
• Terms – if you don’t have terms, now you can request terms
• No hidden price increases
• Shipments not put on hold
• Ensure accurate paper trail and history: will point out the ―real‖ process
flow issues
• Eliminates opportunity for fraud— Wrong approvers
— Buying from invalid suppliers
— Paying invalid suppliers
• Eliminates paper— Reduces department space (better use of real estate)
— Eliminates storage area
— Eliminates shredding process
— Eliminates misfiling of paper invoice
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©2011 Financial Operations Networks LLC
Why Should
Suppliers Use e-Invoicing?
• Improves their cash flow (DSO)
• Eliminates manual labor—Printing the invoice
—Manually mailing the invoice
—Resolving mismatches
• Eliminates cost—Paper and storage of paper
—Envelopes
—Postage
—Credit & A/R debt collection
—Selling receivables or borrowing cash
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©2011 Financial Operations Networks LLC
Reevaluate
• Segregation of Duties
• Retention Plan
• Disaster Recovery
• Go back over and make sure everything is working
as expected
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©2011 Financial Operations Networks LLC
How to Gain Results
• Keep it Vanilla—Don’t change the code!!!!
—Don’t force your current process into
the new system
—Change your process!!!
• Insist on EFT
• Eliminate receipt mismatches with new process
• Don’t try to do everything—start with e-invoicing top down
—smaller volume: use p-card or scanning
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©2011 Financial Operations Networks LLC
About ADP
• ADP is a global leader in procure-to-pay and
invoice automation
• Serves more than 585,000 clients in 31 countries around
the globe
• Over 80 percent of the FORTUNE 500® companies and
over 90 percent of the FORTUNE 100 use at least one of
ADP’s services
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©2011 Financial Operations Networks LLC
About ADP (Cont’d.)
• Only information technology company and one of a
handful of global companies with a ―AAA‖ rating from
the leading investment ratings agencies
• $1.3 Trillion in client funds moved leveraging a world
Class, secure payment environment
• Over 16,000 suppliers transacting every day and
growing exponentially
• Network processes 10 million transactions and $50 billion
spend annually
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©2011 Financial Operations Networks LLC
Optimizing your Processes
with ADP Procure-to-Pay
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©2011 Financial Operations Networks LLC
Reducing Costs
Invoice Receipt• Electronic invoicing via integration, portal, LIDO
• Scan and index for low volume suppliers
With ADP P2P• Reduce processing costs
• Accelerate processing cycles
• Eliminate supplier inquiries
Benefits
Workflow/Approvals• Automated routing and workflow for invoices
• Alerts, reminders and escalation procedures
Vendor Self-Service• Visibility to transaction status – reduced inquiries
• Collaborative dispute resolution
Supplier Network• Thousands of suppliers transacting every day
• Complete suite of supplier enablement services
Cost Reduction
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©2011 Financial Operations Networks LLC
Optimizing Working Capital
With ADP P2P:• Reduce payment costs
• Increase discount capture
• Accelerate receipt entry
Benefits
Discount Management• Alerts to prompt processing of invoices with discounts
• Dynamic discounting on a sliding scale
Working Capital Optimization
Payment Processing• Payments via check, ACH or card
• Remittance information delivery
Electronic Receipts• Ability for suppliers to upload electronic receipts
• Reconcile invoices with electronic receipts
Reporting & Analytics• Standard and ad hoc reporting capabilities
• Dashboards and aging summaries
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©2011 Financial Operations Networks LLC
Improving Control
With ADP P2P• Increase contract compliance
• Reduce invoice exceptions
• Increase control over business process
Benefits
Price Book Compliance• Upload and maintain price books
• Ensure compliance with negotiated pricing
Risk Mitigation/Increased Control
Invoice Validation• Validate invoices against pre-defined criteria
• Reduce number of errors and exceptions
Control Mechanisms• SAS 70 certification for enhanced controls
• Disaster recovery and business continuity
Workflow/Approvals• Automated routing and workflow for invoices
• Alerts, reminders and escalation procedures
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©2011 Financial Operations Networks LLC
The OpenInvoice Platform:
Complete, Scalable, Flexible
ADP® Invoice –
Enterprise
Edition
SingleIntegratedSolution
Scale Up or DownMix & Match
ADP® Invoice –
Professional
Edition
Line Item eInvoicing
eReceipts & Real Time Spend
Purchase Order Integration
2, 3 and 4-way Matching
Spend Categorization /Analysis
Dynamic Discounting
Electronic Line Items
Scanned Image eInvoicing
ERP Integration
Approval Workflow
Account Coding
Dispute Resolution
Supplier Self Registration
Vendor Self Service
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©2011 Financial Operations Networks LLC
Questions
If you have further questions,
please e-mail them to
Thank You!
The Accounts Payable Channel
2100 RiverEdge Parkway, Suite 380
Atlanta, GA 30328
Contact: [email protected]
866-827-6389
770-984-1184
www.TheAPChannel.com
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