HOW TO BECOME TREASURY S BEST FRIEND AND ALLY

Transcription

1 HOW TO BECOME TREASURY S BEST FRIEND AND ALLY

2 ABOUT ME Professional Summary Michael has spent the past 17 years working with organizations to enable and implement enterprise technology, AP/AR automation, and global compliancy. He has helped companies of all sizes and verticals improve their practices and achieve best in class status. Michael Jasper Head of E-Invoicing, Americas Global Center of Excellence Basware, Inc. As Head of e-invoicing, Michael is tasked with helping organizations in the America s move from paper based processes to truly electronic communication and commerce. Michael leads Basware s payment strategies practice in North America, guiding organizations to improve their working capital management and achieve hard dollar savings. Michael is also a member of Basware s Global Center of Excellence. He works with his counterparts around the world to identify new trends and risks in the global marketplace. Together this team works to ensure that Basware continues to be a leader in Global Finance, best practices, and compliancy.

3 BASWARE IS A GLOBAL LEADER IN E-INVOICING & PURCHASE-TO-PAY (P2P) Basware is the leading provider of networked purchase-to-pay solutions, spanning e-invoicing to innovative financing services in the world of commerce Founded 1985; Publicly listed 2000 (NASDAQ OMX Helsinki); Net sales of million (LTM as of Q3 2015) PURCHASE-TO-PAY Invoice automation, procurement & TEM software within organizations COMMERCE NETWORK e-invoicing solutions & operator between buyers & suppliers FINANCING SERVICES New value added innovations: Basware Pay, Basware Discount & Basware Advance large customers 1.2 million users License / SaaS Basware Commerce Network connects 1 million companies in over 100 countries Basware Commerce Network enabled Partnerships include e.g. MasterCard, Arrowgrass, ING

4 BASWARE DRIVES FINANCIAL PERFORMANCE Reduced invoicing costs by 75% Receive 97% of invoices as electronic invoices Reduce costs of processing expense claims by over 50% Reduce costs of Accounts Payable function by 60% Pay over 85% Of suppliers within 7-10 days to capture discount Process over 90% of invoices without any manual intervention

5 THE LAND OF TREASURY

6 FINDING THE COMMON GROUND Accounting Treasury Days Payable Outstanding Invoices Past Due Paid on time % Invoices / FTE % STP Cost per Invoice Compliance Audit Prep Forecasting Payables Forecasting Working Capital Forecast Error % Cash Visibility RISK Cost of Funds above benchmark Portfolio Value at Risk Funding Buffer Hedge Ratio Investment Portfolio Liquidity

7 TREASURY S BALANCING ACT Risk Value

8 MANAGING RISK Compliance Payments Risk Forecasting Operational Currency

9 COMPLIANCE

10 REGULATIONS ARE MOUNTING Operational Compliance Risk Forecasting Currency Visibility The US mandates all B2G e- invoicing by 2018 expects to improve cash flows for suppliers by streamlining govt invoice approvals The EU mandates all B2G e- invoicing by 2018 impacting 100,000 public sector entities and over 14 million companies - Expects 40 billion euro savings Latin America very advanced and focused on reducing tax evasion Asia less advanced but showing clear signs of moving towards e- invoicing with Singapore, HK, S. Korea and Taiwan most advanced Source: Billentis Report

11 MANAGING RISK - COMPLIANCE Operational Compliance Risk Forecasting Currency Visibility E V I D E N C E Post-audit view to compliance Freedom to choose e-invoicing method Business Controls/ Audit Trail, EDI, Digital Signatures as examples VARYING COMBINATION OF LEGAL, TECHNICAL AND PROCESS REQUIREMENTS North america AUSTRALIA & NEW ZEALAND EU B2B Mandatory e-invoicing Technical integration requirements Regulated sending methods and invoice formats > no room for interpretation EU B2G ASIA, RUSSIA, TURKEY Legal requirements Technical requirements Change management LATIN AMERICA C O N T R O L

12 MANAGING RISK - COMPLIANCE Operational Compliance Risk Forecasting Currency Visibility

13 MANAGING RISK - COMPLIANCE Operational Compliance Risk Forecasting Currency Visibility Fines ranging from $50,000 to $10, and imprisonment ranging from 10 to 30 years for willful violations. Civil penalties range from $250,000 to twice the amount of each underlying transaction to $1,075,000 for each violation. Since 2013, IRS has settled over $2.5B in OFAC fines and penalties $3,000 for every journal entry that doesn t correctly match XML Format Fees of 0-15% of owed VAT. 100% of any tax under-stated or over-claimed if you send a return that contains a careless or deliberate inaccuracy 400 if you submit a paper VAT Return, unless HMRC has told you you re exempt from submitting your return online

14 FORECASTING

15 VISIBILITY IS IN DEMAND Compared to two years ago, has the demand for real-time visibility into your AP financial data changed? 2% Operational Currency Compliance Forecasting Risk Visibility 18% Significantly higher 39% Slightly higher Unchanged 41% Slightly lower Source: IOFM 2015

16 VISIBILITY TOPS THE C-SUITE S AGENDA Operational Compliance Risk Forecasting Currency Visibility 68.9% 66.4% 41.2% 17.6% 17.6% Improving visibility into cash flow/cash management Lowering invoiceprocessing costs Developing effective measures to gain visibility into overall performance of F&A functions Capturing more early payment discounts Exploring outsourcing options Source: IOFM

17 GLOBAL DATA, ONE PLACE Operational Currency Compliance Forecasting Risk Visibility

18 MANAGING RISK - FORECASTING Operational Compliance Risk Forecasting Currency Visibility Automation E-Invoices E-payment Converted Validated integrated Auto-coded Auto-flowed Matched Payment Reconciliation Visibility

19 MANAGING RISK - FORECASTING Operational Compliance Risk Forecasting Currency Visibility

20 Managing Risk - Forecasting Operational Currency Compliance Forecasting Risk Visibility Insights for AP leaders Insights for financial leaders Spend/supplier insights

21 CURRENCY

22 MANAGING RISK - CURRENCY Operational Compliance Risk Forecasting Currency Visibility TREASURY CHALLENGES ACCOUNTING CAN HELP BY: Varying AML controls by country can require time to process conversions. Currency fluctuation/volatility can effect the total cost of a payable. Treasury needs to balance this with liquidity. Having single source of truth for all outstanding receivables globally. Having full visibility to all receivables from point of origination.

23 MANAGING RISK - CURRENCY Operational Compliance Risk Forecasting Currency Visibility

24 MANAGING RISK - CURRENCY Operational Compliance Risk Forecasting Currency Visibility

25 OPERATIONAL

26 AREAS OF OPERATIONAL RISK Prevent fraud Accurate Management Information Operational Risk Treasury Audit Error prevention

27 PREVENTION OF FRAUD Visibility Process Audit Invoice abnormality Invoice Amounts Vendor Onboarding Visibility. Solid Apporoval Process

28 THE TYPICAL VENDOR PROCESS (PLAN) Collect Data Req. Docs (w-9, ins, etc.) Review and Approve New Vendor On Boarded Via standard channels Invoice Received PO Matching Invoice Approval Recurring Match Plan Standard AP Automation

29 THE TYPICAL VENDOR PROCESS (REALITY) Invoice Arrives Invoice Researched Vendor Contacted Contract Researched Vendor Begins Payment Inquiry Temp Vendor Record Created Invoice Manually Entered Invoice Manually Approved Invoice Paid (Late) Vendor On Boarded

30 VENDOR MANAGEMENT IS CURRENTLY A MANUAL PROCESS

31 ACCURATE MGT INFORMATION Operational Compliance Risk Forecasting Currency Visibility Staff Productivity Concerns the C-Suite Managing debt 2.14 Ensuring effective internal controls Improving staff productivity Controlling my budget Source: IOFM

32 IDENTIFY INTERNAL RISKS

33 PAYMENTS

34 MANAGING RISK - PAYMENTS Operational Compliance Risk Forecasting Currency Payments Invoice Payment Terms (e.g. 30 Days) Approved Invoice PDF & Paper Process 1. Invoice Collection Time (Prepare, OCR & Validate) 2. Invoice Approval Time (Receipt, Match & Agree) 3. Working Capital Window (Pay & Balance Cash flow) Week 1 Week 2 Week 3 Week 4 Week 5 Best in Class e-invoicing Expanded Opportunity Invoice Date Due Date

35 MANAGING RISK - PAYMENTS Operational Compliance Risk Forecasting Currency Payments Which payment type leaves your organization the most exposed to fraud? AP card 1% Debit 1% EDI 1% Business commerce network 1% Purchasing Card, 16.5% Wire 5% ACH 2% Check from third party 14% Check from AP team 58% Source: IOFM

36 B2B CHECK USAGE REMAINS HIGH 90% 80% 81% 74% 70% 67% 60% 50% 50% 51% 40% Source: 2016 AFP Electronic Payments Survey

37 TOP BARRIERS TO B2B ELECTRONIC PAYMENTS Difficulty convincing customers to pay electronically 78% Shortage of IT resources for implementation 77% Difficulty convincing suppliers to accept electronic pyaments 76% Absence of standard formats for remittance information 71% Lack of integration between electronic payments and accounting systems 69% Source: 2016 AFP Electronic Payments Survey 37

38 WHAT IS THE B2B DIRECTORY? Information service, not a payment system Secure and trusted directory database Network of credentialed Service Providers Electronic Payment Identity (EPI) Includes private and public information The B2B Directory: Supports multiple payment types and related business information e.g., preferred payee payment and remittance format Enables payers to search to retrieve EPIs to facilitate multiple payment types Goal of B2B Directory is to enable business payers small and large to make more electronic payments to vendors and other payees and exchange related business information e.g., remittance 38

39 GO TO MARKET STRATEGY The B2B Directory: Making It Real How to Get Involved Benefits Join the Early Adopter Group Service Provider Operator Payers and Payees Join the Steering Committee Collaborate on developing the operating rules, business requirements and design Increase your percentage of electronic B2B payments through use of directory

40 FLEXIBLE PAYMENT AND FUNDING OPTIONS FOR BUYERS AND SUPPLIERS Strategic Significance Multiple solutions support financial agility: Spend Integrated virtual payments with MasterCard Discount 2 % 1 % Dynamic Discounting Supply Chain Finance Buyer can choose what to offer to suppliers d

41 GOING FORWARD

42 KEEP IN MIND Treasury Balances Risk and Value Risk comes in many forms Compliance, Forecasting, Currency, Operational, Payment Having a global view, and real time data is critical

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