How Your Accounts Payable Strategy Can Boost ROI ADP Procure-To-Pay Jeff White - Director of Implementations Session #1050

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Melvin Wood
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2 How Your Accounts Payable Strategy Can Boost ROI ADP Procure-To-Pay Jeff White - Director of Implementations Session #1050 2

3 Manual Process : Complex, Slow and Tactical Invoice Processing Price Validation Discount Management Payment Paper Invoice received via mail, or fax Paper invoice routed manually to appropriate approver Research & resolve errors or disputes Manual price checking against negotiated contracts Manual validation of purchase order price against invoice price Manually sort and filter invoices for discount suppliers Low discount opportunity due to processing timelines Check Cut & Payment issued to supplier Print copy of check & attach to paper invoice Maintain bank information for ACH suppliers Invoice coded & approved React to supplier calls offering discounts Manual reconciliation of payments Invoice entered into ERP via manual data entry Manual audit of stale dated checks Invoice ready for payment issue Invoice payment recorded and paper invoice filed Respond to supplier inquiries 18 steps 45 days cycle 3

discount suppliers Low discount opportunity due to processing timelines Check Cut & Payment issued to supplier Print copy of check & attach to paper invoice Maintain bank information for ACH

4 Invoicing and payments The last bastions of paperintensive, high cost and slow business processes? Almost 1/2 of B2B invoices in the U.S. are already electronic 1 and growing at 13% each year 1 Over 1/2 of vendor payments are made electronically and growing at over 5% each year * 4 * Electronic Payments Study, Association of Finance Professionals, 2010 (49% of vendor payments by check)

are already electronic 1 and growing at 13% each year 1 Over 1/2 of vendor payments are made

5 In fact It can cost you 3X more and take 8X longer to process a paper-based invoice compared to an electronic invoice with workflow automation. 5 * Aberdeen Group study, 2010

6 You want to Reduce Cost Improve Visibility Reduce Vendor Calls Accelerate Processes How do you do it? 6

7 Top Technologies that Deliver ROI Electronic Invoicing Automated Workflow Discount Management Payments Processing 7

8 Electronic Invoicing 8

9 Get Rid of Paper Leverage electronic invoicing and outsourced scanning 3 Ways Suppliers ERP Web Paper Conversion Automated approval workflow einvoicing supplier network Scan and index service Payment services Buyers 9

Conversion Automated approval workflow einvoicing

10 Benefits of Electronic Invoicing 10 Source: PayStream Advisors, Inc.

11 The Numbers Prove It! Cost per Invoice Days Cycle Time per Invoice einvoicing -53% -82% Scanning & Workflow Manual Source: PayStream Advisors, Inc. 11 Source: PayStream Advisors, Inc.

12 Automated Workflow 12

13 Top AP Automation Goal - Workflow 13 Source: PayStream Advisors, Inc.

14 Only Manage Exceptions Use automated workflow and configure business rules to route documents and apply coding to invoices A configurable business rules engine Validation against negotiated pricing Rules-based coding on invoices 14

coding to invoices A configurable business rules engine

15 Best-in-Class Companies are Automated 15

16 Discount Management 16

17 Missing Early Payment Discounts is Common Companies Missing Discounts Reasons for Missed Discounts 17 *Source: PayStream Advisors, Inc.

18 Increase Capture of Discounts Compress your processing cycles with electronic invoicing and automated workflow to capture additional early payment discounts 45 days 5 days Electronic invoicing Automated workflow Prioritization of invoices Alerts and notifications Escalation of invoices Dynamic discounting 18

discounts 45 days 5 days Electronic invoicing Automated workflow

19 What is Dynamic Discounting? 19

20 Payment Processing 20

21 Checks are Going Away 21 Source: PayStream Advisors, Inc.

22 Benefits of Electronic Payments 22 Source: PayStream Advisors, Inc.

23 Keeping Track of Progress 23

24 Automated Process: Fast, Efficient and Strategic Invoice Processing Price Validation Discount Management Payment Paper Invoice received via mail, or fax Paper invoice routed manually to appropriate approver Research & resolve errors or disputes Manual price checking against negotiated contracts Manual validation of purchase order price against invoice price Manually sort and filter invoices for discount suppliers Low discount opportunity due to processing timelines Check Cut & Payment issued to supplier Print copy of check & attach to paper invoice Maintain bank information for ACH suppliers Invoice coded & approved React to supplier calls offering discounts Manual reconciliation of payments Invoice entered into ERP via manual data entry Manual audit of stale dated checks Invoice ready for payment issue Invoice payment recorded and paper invoice filed Respond to supplier inquiries 3 steps 5 days cycle 24

25 KPIs that Count 25

26 KPIs that Count Impact of Electronic Invoices on Processing Costs 26

27 Case Study 27

28 20,000 invoices per month 60 days to process Case Study Large Oil & Gas Company 3 month implementation Virtually eliminated lost invoices Vendor inquiries down 75% 60% electronic, 480 vendors 28 99% processed electronically 10 days to process

29 Client Case Study Overview Client Background Client company and its subsidiaries explore, acquire, develop, produce and market natural gas and crude oil Multi-billion dollar company, with operations in in North America and selected international locations, with field offices throughout operated areas Inundated with 10,000 20,000 invoices a month Challenges Challenges with Manual Processes Current e-invoicing provider only converted 17% of incoming invoices to electronic after more than 2 1/2 years AP department was overwhelmed with too much paper and frequently lost invoices Often paying invoices late, missing early-pay discounts, failing to reconcile overages High volume of calls from vendors inquiring into invoice status and seeking payments Solution Solution of Choice One month evaluation period demoing software with client data Three month implementation define workflow logic, develop policies & procedures and determine key integration and interfaces Worked closely with client to formulate supplier enablement strategy and change management/communication plan 29

30 Reaping the Benefits No More Paper Successful Migration from Paper to Electronic 99% of client invoices are processed within the solution 60 percent of invoices are electronically submitted by 480+ vendors 20% of suppliers, accounting for 60% of invoices volume have been on boarded Lost invoices have been eliminated; duplicates significantly reduced WOW Factor Reduced Costs & Processing Cycles Average time to process an invoice reduced from 60 days to 10 83% improvement Number of vendor calls per day reduced from 40 to 10 75% reduction Incremental discounts captured more than pay for annual license fees Lessons Lessons Learned from Automation Supplier enablement strategy is critical for automation project success Underestimated the impact and bottlenecks arriving from in-house scanning Change management is an important component of any technology implementation 30

31 Thank you 31 adp.com/einvoicing

YOU WANT TO. Copyright 2014 ADP, LLC. Proprietary and Confidential.

YOU WANT TO. Copyright 2014 ADP, LLC. Proprietary and Confidential. YOU WANT TO 2 BUT THERE ARE CHALLENGES 1 2 4 3 1 PWC s most recent Global Economic Crime Survey (2011) 2 Source: ACFE. 2012 Report to the Nations on Occupational Fraud and Abuse. 3 2013 Invoice and Workflow