AP Automation Best Practices and Trends Oracle E-Business Suite

Transcription

1 AP Automation Best Practices and Trends Oracle E-Business Suite October 17, 2012

2 Agenda The challenges of efficiently processing invoices Technology Evolution Invoice Capture ERP Integration Oracle EBS Bridging the Gap 11i to R12 Performance Benchmarking Kevin Ryan Oracle AP Automation Solutions Readsoft North America

3 Top pain points for AP processes Source: PayStream Advisors Financial Automation Survey

4 What are the Business Issues we see? Accounts Payable Management Repetitive manual data entry Line item matching Low quality of data caused by human error Cost control / high A/P operational costs Inefficient invoice storage and retrieval Invoices get lost, fraudulent invoices, duplicates Penalty for late payments Poor supplier service levels Challenges with financial reporting Cash management Corporate compliance / Sarbanes-Oxley

5 A Day in the Life of an AP Department ReadSoft solutions handle 87% of these tasks 9% 7% 6% Data entry 32% Exception handling 12% Supplier inquiries 13% Source: ReadSoft Customer Survey 21% Maintenance of supplier data Payment management Other Employee payments

6 AP Technology Evolution Source: PayStream Advisors 2010

7 Industry Research about AP Automation AP processes can be drastically improved with automation Especially in the areas of invoice receipt, matching and approval workflow Even small and mid-sized businesses are adopting Drives best-in-class AP performance 92% lower invoice processing costs 81% faster invoice processing cycle time Source: The Aberdeen Group: Imaging and Workflow April 2011.

8 Four Key Benefits of AP Automation I. Efficiency Shorter processing and payment cycle times Shorter response times; productivity is improved by reducing time wasted in low-value activities Streamlining of major AP sub-processes Invoice receipt Approval and inquiry Validation and reconciliation Settlements II. Visibility Into the entire flow of AP processes Into liabilities and operation expenses Into billing discrepancies and overpayments, unclaimed negotiated discounts, contracted payment terms, early payment discounts, and late penalty fees

9 Four Key Benefits of AP Automation III. Cash Flow Management Opportunity to negotiate better terms with partners Lower transaction costs Discount Capture Performance Area Invoice processing costs Processing cycle time Late payments Staff time responding to inquiries Best-in-Class Advantage 91% lower 46% shorter 12% fewer 30% less IV. Control Simplified management of invoices and workflow & elimination of manual, paper-based processing Improved forecasting & management of near-term cash management requirements Decreased financial risk Better coordination and information flow among key stakeholders such as AP, procurement, finance, treasury and suppliers Source: The Hackett Group: Automating the AP Process June 2010

10 Capture Methods Scanning Options Local Remote Disconnected WAN Delivery E-Invoice XML EDI Supplier Workbench E-Form Entry PO Flip ERS

11 OCR Paper and Image Extraction Advanced vs. Template Based Memorization Line item detail extraction

12 Accounts Payable Mailroom Suppliers AUTOMATED INVOICE HANDLING WITH OPTIMIZED PROCESSING Suppliers send invoices via mail, , fax, XML Invoices are interpreted by DOCUMENTS, verified by a user if required, and transferred to PROCESSIT Mailroom scans paper invoices OCR-data is sent to ReadSoft DOCUMENTS Standard invoice validations applied Automatic Match? Yes - Full match! No Account Coding Approval Process according to ERP hierarchy Invoices are ready for payment

13 Integration Conventional Integration Challenges Batch Based Integration or Custom Code Not real time Hourly or Daily updates Automated matching very complex Separate Products Independent data management, storage and archival Lots of Professional Services OCR Workflow Vendor PO Data Vendor PO Data Receiver Invoice Post Status ERP

14 Integration Real-Time Persistent Benefits Persistent Single Point Real-Time Connection Designed for EBS Fixed Cost Services ERP Upgrade Assurance Integrated Source Data Approval levels, groups and assignments Tolerance COA Distribution Sets/ Aliases Supplier Management Matching Payment Data Receivers OCR WOKFLOW ERP

15 MANAGEMENT and REPORTING Predefined reports for Production, AP and CFO reports Audit History and Compliance Discount Management Dynamic Discounting Key Performance Indicators Cashflow Management

16 There is a lot you can do Manual keying: Eliminate Verification and validation: Reduce costs dramatically Registration and allocation: Reduce costs Personal copies: Eliminate Archiving : Reduce costs dramatically Late payment penalties : Eliminate Write-offs : Reduce Early pay discounts: Get them

17 Invoice Automation it s a good thing Aberdeen Group The use of electronic integration, messaging, reconciliation and reporting solutions in accounts payable reduced transaction cost between 63% and 67%. Most companies have moved to a shared services model to improve policy and process compliance. Yet, only 3% of accounts payable processes reported having a high-level of automation. 79% of AP managers see "automation" as the key enabler to future success. The invoice reconciliation and payment solution framework addresses invoice receipt, approvals, reconciliation and payment considerations for solution selection. (From the Electronic Invoicing Solution Selection Report)

18 Better control and security Fast and simple electronic distribution Full control of your document flow Electronic account coding and payment authorization Easily accessible information High security SOX compliance support 40-60% cost savings

19 ReadSoft PROCESSIT Architecture High level workflow description AUTOMATING ACCOUNTS PAYABLE

20 Upgrading to EBS R12.1 Many organizations took a wait and see approach to R12 Need to consider customizations in R11.x EBS R12 is the bridge to Fusion Applications AP Automation can Bridge the GAP from 11i to R12 Understand the transition process If you are considering or in process of R12.1 upgrade, be sure any vendor applications are validated through Oracle.

21 ReadSoft AP automation solution - Validation by Oracle Thoroughly tested and approved Operates in your familiar Oracle environment Security and Support is guaranteed by Oracle Supports Oracle version upgrades

22 Oracle integration Business Needs Oracle Integration ReadSoft Solution Oracle validation for PO, supplier, site, duplicate invoice, contact person etc. Use of E-Business Suite components such as legal entity, GL code combinations, users, employees, responsibilities, hierarchies, AP/PO options, Oracle standard workflow engine, profile options etc. More accurate information, using existing Oracle set-up: Automatically assigns organization code Automatically assigns supplier/site Prevents duplicate invoices Checks for valid PO Uses existing COA, code combination, Hierarchies etc. Uses Oracle standard workflow engine Uses standard Oracle validation rules & hold codes

23 Single source vendor Business Needs ReadSoft Solution One Stop Shop The OCR to Oracle solution for automated AP processing on the market developed and supported by the solution provider We can provide customers with support for all areas of the solution no grey areas Because document recognition and Oracle workflow components are from the same company: You only need to call ReadSoft Same solution across the world, software, implementation & support Upgrades guaranteed to work No risk with multiple vendors Product roadmap known

24 Low risk Business Needs ReadSoft Solution Proven Solution Industry leaders in AP Invoice automation More installations than any other solution provider Low risk for our customers: Market leader Experts in OCR Experts in AP Experts in Oracle

25 Invoice Automation in practice: Graco Graco, Inc. World leader in fluid handling systems and components Pain Points: Too much time wasted keying invoices Too many lost discounts Couldn t locate invoices Low visibility Invoice Automation Results: Initial goals set for two years were met within the first six months Staff cut in half within the first four months Average invoice processing time dropped from 24 days to 9 70% of invoices are not touched by staff

26 What you can learn from Graco s experience AP process automation can pay big benefits with Thoughtful preparation Identifying needs and goals Assigning & empowering staff resources Consider implementation phases & schedules Be prepared to adapt and adjust, but Always keep the scope of each phase as a touchpoint 27

27 Additional Customer Successes Vodafone Processed 50% more invoices in 2 nd month after implementing ReadSoft Kellogg s 50% of PO-based invoices go from Scan to Post untouched Green Mountain Power Enabled to take early payment discounts, greatly reduced vendor calls, and majority of top vendors are now enabled to send PDFs instead of paper Alcan Significant reduction in manual processing, data entry, filing and retrieval; majority of PO-based invoices automated Sheridan 3-month installation, including testing and go-live; able to negotiate significant discounts; able to process more invoices with fewer people; able to report in real-time on vendor spend

28 When Considering AP Automation Know the difference between it can and it does Questions and dialogue with potential vendors Was it designed to work in your environment? Know yourself Are you hands-on ready or do you expect turn key? How involved in detail planning & process implementation can you/do you want to be? Start with an assessment Don t underestimate the culture fit Know where you are today and where you want to go 29

29 Benchmark Your Performance The Hackett Group has developed a tool with ReadSoft to help you benchmark your AP process performance Comparison to world class organizations, peer groups and median performance A ReadSoft consultant will walk you through the assessment tool and provide an actionable report 92.0% 90.0% 88.0% 86.0% 84.0% 82.0% Percentage of payments made within terms World-Class Median Classification Overall Peer Median Sm Consolid Median Lg Consolid Median Sm Diverse Median Lg Diverse Median Customer input Accounts Payable - Invoices per FTE 25,000 World-Class Median 20,000 Overall Peer Median 15,000 Sm Consolid Median 10,000 Lg Consolid Median 5,000 Sm Diverse Median - Lg Diverse Median Classification Customer input

30 THANK YOU