Turning Accounts Payable from a Cost Center to a Revenue Generation

Transcription

1 GAIN GLOBAL VISIBILITY OF CASH & RISK FOSTER CONNECTIVITY UNLOCK HIDDEN CASH DRIVE EFFICIENCIES & PRODUCTIVITY AVANTGARD Turning Accounts Payable from a Cost Center to a Revenue Generation Dawn Lothringer, treasury manager, Zachry Holdings, Inc. Matthew Dragiff, vp product management, payment solutions, SunGard s AvantGard

2 About Zachry Holdings, Inc. Total Revenue: $2 billion-plus Services: Engineering, construction and industrial services Markets: Power, petrochemical, refining, pulp & paper, manufacturing, nuclear, renewables Headquarters: San Antonio, Texas Payments Department: Payments environment centralized No. of Employees: Approximately 10,000 Offices: 30-plus nationwide

3 Payments Department Structure Payments environment centralized Accounting decentralized Outdated check-printing equipment Accounts payable handled manually

4 Speaker Background Dawn Lothringer, Treasury Manager, Zachry Hodings, Inc. 29 year employee of Zachry Responsible for treasury operations Active in the San Antonio Treasury Management Assoc. Matthew Dragiff VP Product Management, SunGard 29 years career in Technology, 7 with SunGard Responsible for product strategy and roadmap Active in NACHA & X12 Remittance Coalition

5 Market Backdrop: Corporates Need Help Migrating Away from Checks *Phoenix- Hecht Treasury Management Monitor 2011

6 Challenges Issues Outdated equipment Tedious manual tasks Accounting functions decentralized 2-3 employees devoted to envelope stuffing for 4 hrs/day Effects Payment delays Low productivity Payment errors Risk of fraud High costs Lack of security over processing payments

7 Initial Goals Increase efficiencies surrounding payment processing Introduce tighter security controls for fraud prevention Migrate many of the paper check-based processes to be electronic Retain ability to print paper checks in-house if needed Reduce strain on accounting staff Decrease number of manual processes

8 Catalysts That Motivated Our Treasury Department Reduce the number of checks lost in the mail causing rework Reduce our reconciliadon efforts Reduce costs Create win- win for our vendor clients Check 21 and Check truncadon (not much float advantage anymore) ACH was increasingly becoming mainstream

9 Technology Checklist: Automation to combat high number of manual processes Ability to process automated clearing house (ACH) payments Vendor hosted solution Reduce burden on internal IT Cost-effective option Eliminate need for time-consuming infrastructure changes User-friendly Secure and robust technological platform

10 Overcoming Internal Hurtles Internal legal review Management approval (Cost justification and acceptance by field job sites) IT resources Internal audit review (SAS 70)

11 Vendor Enrollment Outsourced & Ongoing LETTERS PHONE INVOICE FORM

12 Initial Results Automation Process Efficiency Improved Cash Visibility Greater Security Decreased risk of human error Increased productivity rates Lessened number of account inquiry calls related to payment errors, etc. Reduced payment processing costs Move towards electronic environment equates to better tracking of payments Greater control over when funds are dispersed Reduced risk of error-based fraud Better adherence to compliance standards, accounting and otherwise Migrated 1000 vendors to ACH!

13 Virtual Cards

14 What are Virtual Cards? AddiDonal SeQlement OpDon for Payers Single Use Card Number Specific Credit Limit and LifeDme Payment NoDficaDon Process Through ExisDng POS Terminal Simplified Tracking and ReconciliaDon of Payments AddiDonal Data Elements Ease ReconciliaDon

15 Why Move to Virtual Card More efficient Improve reconciliadon Reduce costs - migrate more to electronic Earn revenue from rebates

16 Internal Review Two divisions in Zachry working separately to move to virtual card combined project and worked together Vendor evaluation process for due diligence What is most efficient way? What would be the best rebate? How would the department be impacted? How would the company be impacted? How much would vendor setup department be impacted? Vendor Selection Final Analysis Stay with SunGard

17 Vendor Enrollment Process Outsourced & Ongoing Target Check Printing Customers Only Campaign s, Phone Calls, Letters, Messaging on Invoices New Customers Offer Virtual Card or ACH LETTERS PHONE INVOICE FORM

18 Vendor Enrollment Campaigns - Ongoing Campaign Design Vendor Segmenta-on s Repor-ng/ Analy-cs Calls LeQers Effec-ve EffecDve Vendor Campaign Management Campaign Execu-on Vendor Response Tracking

19 Track Enrollment Campaign Metrics Successful Contacts with Vendors Bad Contact InformaDon # of enrollments/ registradons # of vendors declined service Incomplete registradons (ACH only) Delivered s Bounced s # of s read by vendors # of s not read by vendors # of enrollments/ registradons Bad address Mailed leqers # of enrollments/ registradons Bad mailing address Calls s LeQers

20 Sample Card Payment Notification

21 Virtual Card Remittance Online View

22 Results Earned Revenue - Rebates Reduced Costs Increased Migra-on to Virtual Card and ACH Enroll New Clients in Virtual Card or ACH Earning on average $8k per month in rebates Within 2 months rebate already paid for yearly checking prindng costs Reduced monthly processing costs by 100% Reduced bank fee costs 31% of payments processed electronically 7% of payments are processed via virtual card 24% of payments are processed via ACH Give new clients two opdons for electronic payments instead of directly to check

23 Monthly Processing Costs / Revenue Generated Zachry Generating on Average $8k Per Month in Revenue November December January February Paid to Zachry Paid to SunGard

24 Questions Q&A