LEVERAGING AP AUTOMATION TO CREATE A SUCCESSFUL EARLY PAY PROGRAM (THAT CAN SAVE YOUR COMPANY MILLIONS)

Transcription

1 LEVERAGING AP AUTOMATION TO CREATE A SUCCESSFUL EARLY PAY PROGRAM (THAT CAN SAVE YOUR COMPANY MILLIONS)

2 Housekeeping Details Listen-only mode teleconference Questions Question function in GoTo Meeting Conference dial in # Please use the confirmation number Trouble joining? - info.us@basware.com provided

3 Agenda Leveraging AP Automation to Create a Successful Early Pay Program - Building on AP Automation - The BIG Value in Working Capital - Early Pay Discount Programs - 5 Strategies for Success - Getting Started Basware Overview Q&A 3

4 Featured Speaker Tom Glassanos President Bavelos Group Over 10 years experience deploying Early Payment Programs (EPP) Founder, CEO of the Xign B2B settlement network Dynamic Discounting inventor Pioneered Buyer Initiated Purchase (BIP) cards with MasterCard 3 times recognized as a Supply Chain Executive Magazine Pro to Know Successful entrepreneur over $100M in venture capital and 2 IPOs

5 Bavelos Group Profile Advisory Services for Working Capital Optimization Early Pay Programs Supply Chain Financing Card Programs (BIP) Best practice consulting

6 Representative Firms Our Team Has Helped Bavelos methods for working capital have benefited over 50 global corporations and more than $1 trillion in spend. 6 Copyright 2014 Bavelos Group - All rights reserved.

7 Building on AP Automation Bavelos Proprietary & Confidential

8 Traditional View of AP Automation Value Errors Paper Efficiency Headcount Compliance Reduced costs Faster approvals Hard savings is a % of the total cost of AP 8 Copyright 2014 Bavelos Group - All rights reserved.

9 What Working Capital Can Add* AP Automation is Tip of the Iceberg Errors Paper Efficiency Headcount Compliance 20% Cost Savings Working Capital Value 80% Cash & Income * Data from over 50 major corporations; >100k vendors; >$1 trillion spend 9 Copyright 2014 Bavelos Group - All rights reserved.

10 Where the Added Value Lies Financing the supply chain to strengthen trade and save millions The Opportunity (early payment discounts) 0 Days Invoice 15 Days Approve 60 Days Due Date $9 Trillion Global Investment Opportunity* 10 *Main Street Advisors Copyright 2014 Bavelos Group - All rights reserved.

11 Why Accelerating Cash Can Make Sense today s treasury Cash Return options 8-40% 3% * 0.2% 0.3% 0.15% Money Market AA Debt 30 Days U.S. Treasury 30 Days Early Pay Discounts * Early pay discounts yield.5-3% over days risk free Compelling double-digit, RISK FREE return on cash 11 * Actual Bavelos EPD experience Copyright 2014 Bavelos Group - All rights reserved.

12 Impact on Your Automation Proposition $7,000,000 $6,000,000 $5,000,000 $4,000,000 $3,000,000 $2,000,000 Early Pay Savings AP Cost Savings $1,000,000 $0 Automation Automation & Working Capital Increases AP s value as much as 5-10 times! ($3-$5 million in savings/$1 billion in spend) 12 Copyright 2014 Bavelos Group - All rights reserved.

13 Case Examples on the Web Over $45 million/year in discount savings - Ben Shaffer: Pacific Gas & Electric AP Manager 20% of suppliers discount, half of these are at 3% - Vic Nation: Payless Shoesource 30% of suppliers discount; 50% of all invoices - Barbara Cassera: Memorial Sloan Kettering 30% of corporate suppliers are on discount terms - United Parcel Service 13 Copyright 2014 Bavelos Group - All rights reserved.

14 How to Leverage AP Automation Bavelos Proprietary & Confidential

15 Ways to Enable the Early Payment Opportunity Faster invoice approval Longer Net Terms Day 10 Day 30 Day 45 Day 60 Longer net terms more need for cash Faster approval more early payments 15 Copyright 2014 Bavelos Group - All rights reserved.

16 1. Faster Approval Core Automation Shorten the approval time with core AP automation tools Electronic invoicing Workflow approval Pre-matching (PO Flip) 16 Copyright 2014 Bavelos Group - All rights reserved.

17 2. Extend Terms Supplier Onboarding Transform terms when you onboard suppliers for electronic invoicing Leverage your on-boarding process Extend net payment terms Propose early payment terms Document it with the enrollment 2% 15 net 45 ASAP Day 10 Day 30 Day Copyright 2014 Bavelos Group - All rights reserved.

18 Terms Transformation - Speed to Benefits Kickoff Outreach Begins Initial Results >75% Results 4 weeks 4 weeks 8 weeks Typical campaigns are days in length 18 Copyright 2014 Bavelos Group - All rights reserved.

19 3. Enable More Discounts - Dynamic Discounting Use of ASAP (sliding slope) Terms How it works APR rate is fixed Discount varies Benefits Discounts on any approval up to net date Picks up large savings for earlier payment 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0% Day 10 Invoice approval time Large opportunity >2% Day 30 Day 45 Day 60 2% 10 ASAP 45 All invoices qualify for a discount 19 Copyright 2014 Bavelos Group - All rights reserved.

20 3. Enable More Discounts Dynamic Discounting Use of ad hoc early payment terms How it works Presents ad hoc early pay offers Two methods: POs or Benefits Skims incremental savings at key times Offers based on supplier end of month & quarter cash needs No pre-existing discount terms needed Pay Me Now Offer $3,200 approved to pay Pay today for 1% discount Press here to approve Enables opportunity for discounts on every invoice 20 Copyright 2014 Bavelos Group - All rights reserved.

21 4. Rebate Capture - Payment Automation Use of Buyer Initiated Payment (BIP) Cards 1 2 Buyer ERP approves payment & initiates authorization DIRECTLY to card network. Supplier sends invoice to buyer 3 Buyer bank Card network authenticates and transfers funds Buyer Initiated Payment (BIP) Works on mainstream ERP spend Suppliers pays interchange fee (equivalent to early pay discount) Bank rebates % of fee to buyer (share of the discount) Supplier bank Buyer gains 30 days of cash Rebates as much as 1% on 25% of spend 21 Copyright 2014 Bavelos Group - All rights reserved.

22 Strategies to Leverage AP Automation 1. Faster approval core AP automation 2. Extend net terms supplier on-boarding 3. Enable more discounts dynamic discounting 4. Capture rebates buyer initiated payment cards 22 Copyright 2014 Bavelos Group - All rights reserved.

23 5 Factors for Early Payment Program Success Bavelos Proprietary & Confidential

24 1. Internal Sponsorship # 1 attribute of top performers Clear, explicit goals & metrics Cross functional buy-in Procurement Treasury sponsorship brings awareness & initiative Terms & DPO Ownership?? Payables 24 Copyright 2014 Bavelos Group - All rights reserved.

25 2. Know Your Opportunity Cost Early payment discount savings Cash from DPO Extension Supplier loyalty Rule of Thumb DPO opportunity factor highlights the cost/month of delay $500,000/month per $1B of spend 25 Copyright 2014 Bavelos Group - All rights reserved.

26 3. Apply Best in Class Automation Shared portal for suppliers Electronic transmission of documents Efficient workflow enabled approvals AP automation tools can improve results 20-60% 26 Copyright 2014 Bavelos Group - All rights reserved.

27 4. Eliminate Guesswork with Analytics Benchmark, benchmark, benchmark One size ( term ) doesn t fit all Approval & pay cycles vary Country borders matter analytical targeting can improve results 30-50% 27 Copyright 2014 Bavelos Group - All rights reserved.

28 5. Leverage Experience on the Rollout Supplier outreach & enablement Micro-targeted terms policy Sourcing best practices Campaign Call Status Status as % of Total Spend COMPLETE 64% better execution can improve results 20-40% IN PROCESS 28% REMOVE FROM LIST 1% UNCALLED 1% ESCALATED 1% DECLINED 6% 28 Copyright 2014 Bavelos Group - All rights reserved.

29 5 Factors for Early Pay Program Success 1. Establish internal sponsorship 2. Know your DPO opportunity cost 3. Apply best-in-class automation 4. Eliminate guesswork with analytics 5. Leverage experience on the rollout 29 Copyright 2014 Bavelos Group - All rights reserved.

30 Best Way to Get Started Early Payment Program Workshop Size your working capital opportunity Assess your current practices Determine an optimal terms policy Identify best practice and training needs Prepare implementation steps and timeline One day workshop for AP, Treasury & Sourcing Available via Basware and the Bavelos Group 30 Copyright 2014 Bavelos Group - All rights reserved.

31 In Summary Value of AP automation extends to working capital Early pay programs bring 5-10x more in savings Awareness/sponsorship is the top factor in success Results vary % based on analytics & execution First step is an Early Pay Program Workshop Cash & savings forecast Plan of steps with timeline for results 31 Copyright 2014 Bavelos Group - All rights reserved.

32 Leveraging AP Automation to Create A Successful Early Pay Program Better Buying, Better Selling, Connected Commerce with Basware Bob Cohen Vice President Phone: robert.cohen@basware.com

33 Accounts Payable Automation Summary of Benefits: Control the Cut Costs/Improve 1. Gain Visibility Process Working Capital Transparency & Accountability Approval policies consistent and followed Process is easily auditable Actionable & Accessible Full AP process visibility Real-time view on cash flow Streamlined & Automated Improve Discount Capture and Working Capital Management Speed up invoice cycle times/ Reduce transactional Costs Compliance with SOX, IFRS, etc. Enterprise-wide spend visibility Reduce time spend on nonvalue adding tasks 33 Solution Presentation

34 Intelligent AP Automation Smart Processes Driving Maximized Efficiency & Value Cut Empowered Costs Compliance 1. Invoices are received into the system as true e-invoices PO INVOICE 4. Full Automation: Invoices are matched and sent for payment 2. Pre-processing Validation ensures good data & process MATCHING 5. Partial Automation: Invoices are sent into approval flow coded 3. Smart workflows automate the process 6. AP Clerk focuses only on exceptions - codes and sends into flow for approval Analytics provides realtime, actionable insights into process performance and cash flows

35 Basware helping Accounts Payable Organizations transform their impact on the wider business.. From Cost center Distributed operation Back office function handling disputes Post-process reporting To Profit center Centralized SSC Business partner / collaborator Beating SLA targets Business-wide real-time analytics 35 Solution Presentation

36 Your Environment: CFO Priorities & Concerns Cash flow Debt Growth Cost Supply Legal Priorities Concerns Basware: Cost of Control Research: CFO Research Services: Risk Management Imperative 2011

37 CFO Priorities & Concerns Cash flow Debt The success and failure of managing these competing factors is bound by systems and process Decrease obstacles Supply Cost Accelerate Priorities Growth Legal The degree of interdependence in the Financial Supply Chain has never been more sensitive to change

38 Increased Net margin Increased Net profit Earnings per share The Domino Effect of Automation The Automation Domino Effect Because automation enables optimization of the financial supply chain, several things occur, producing a domino effect Automation tactical strategic

39 Solution Presentation WHY BASWARE?

40 Basware in numbers Corporate performance Net sales >$150m in ,400+ employees Millions of business users in 900,000 companies in 100 countries History Founded 1985 Publicly listed 2000 Consistently Ranked #1/ #2 by analysts across P2P and e-invoicing Offices in Europe, the US, and Asia-Pacific Basware Commerce Network 1.9m suppliers listed >60m e-invoices/pos (2013 annualized) $425b total annual spend across network (2013 annualized) 160+ partners >50 e-invoice formats

41 Cross-Industry References Banking / Finance Retail Manufacturing Food / Beverage Transportation / Logistics Energy Professional Services Medical / Pharma / Biotech Public Sector Construction Services Chemicals 41 Solution Presentation

42 Our Solutions

43 Basware Commerce Network

44 Basware Mobile Anytime, anywhere access to key P2P tasks 24/7 access while on the move. Remove bottlenecks by enabling your key people with mobile access to the process Key features Mobile access for both invoices and purchase requisitions Native support for ios and Android platforms an HTML5 client for other devices Mobile approval, review, reject or forward with a comment Basic data, invoice image, coding and history available 44 Solution Presentation

45 Why Companies Choose Basware AP Automation? Basware AP Automation Control your process Know your process Improved visibility Actionable insights Efficient processes Hard savings Basware Invoice Basware Match Basware Invoice Basware Analytics Basware Match Basware Mobile Basware Commerce Network Standardized best practices SSC centralization SOX/IFRS compliance Full P2P Platform Dashboard process visibility Roles-based UI Consolidated spend data Out-of-the-box analytics Match invoices to POs Handle invoices on the go Automate recurring invoices Largest open commerce network 45 Solution Presentation

46 Benefits of Basware AP Automation felt across the organization Basware AP Automation Realize significant cost savings immediately Handle more invoices with less resources Improve auditability and reporting Provide better service to SSC customers and suppliers Reduce workloads and remove bottlenecks Make straight-through processing reality Gain spend visibility for better cash management Optimize payment strategies CFO Improve return on invested capital Reduce reliance on external finance Reduce costs, protect margin Manage cash & working capital Accurate, credible forecasting Operational excellence SSC Manager Manage segregation of duties Deliver high level of service Support standardization and rationalization of the process Process adaptability Ensure a compliant process AP Manager Full visibility to all invoices Easily audit any BU, Supplier, individual, cost centre or account Ensure invoices are paid on-time Quickly resolve supplier inquiries Collaborate actively with line managers for a faster process 56% less AP Users, 60% STP Consolidated 100% of their Invoices 130% ROI in first year 50% FTE reduction 90% STP 40% less AP Reduced invoicing costs by 75% 46

47 Solutions that strengthen your ability to improve working capital management New services for early payment, discount management and supplier financing Basware Commerce Network providing real-time B2B cooperation Leading offering for Purchase to Pay and financial management

48 Q&A Tom Glassanos President Bavelos Group Phone: (925) Bob Cohen Vice President Basware. Inc. Phone:

49 Thank you! Unlocking Value in a Connected Business World