Ellen Walsh Product Report 30 October 2002 Bottomline Invoice Receipt and Management (IRM) Invoice Payment and Presentment Summary Invoice Receipt and Management (IRM) is designed to help accounts payable (AP) organizations electronically normalize the exchange of invoice data between vendors and their AP systems. Table of Contents Overview Analysis Pricing Competitors Strengths Limitations Insight List Of Tables Table 1: Features and Functions: Bottomline Invoice Receipt and Management (IRM) Gartner Entire contents 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.
Corporate Headquarters Bottomline Technologies 325 Corporate Drive Portsmouth, NH 03801, U.S.A. Tel: +1 603 436 0700; 1+ 800-472-1321 Fax: +1 603 436 0300 Internet: www.bottomline.com Overview Invoice Receipt and Management (IRM) is an enterprise software package designed to help accounts payable organizations normalize the exchange of invoice data electronically between their vendors and their Accounts Payable (AP) system. It is a browser-based platform that receives, aggregates, formats and transfers invoice files into an accounts payable system of record or an Enterprise Resource Planning (ERP) system electronically. Like Electronic Invoice Payment and Presentment, IRM is focused on creating cost savings and efficiency for large businesses; however, IRM caters to the business needs of large payers while EIPP is focused on delivering value to large billers. When fully configured, IRM can provide billers a view into the status of invoices, payments against those invoices, as well as invoices that require exception processing. IRM can also include payment capabilities such as paper check, Automated Clearing House (ACH), Financial Electronic Data Interchange (EDI), FedWire transfer and Society for Worldwide Interbank Financial Telecommunications (SWIFT) messaging. For billers unable to provide files electronically, IRM can include browser-accessed payment request screens that create electronic invoices on demand. IRM is a package for integrating, normalizing and distributing invoice and payment data within an enterprise and between trading partners. Table 1: Features and Functions: Bottomline Invoice Receipt and Management (IRM) IRM IRM enables vendors to provide files electronically in flat file, comma separated value (CSV), Advanced Function Printing (AFP) print stream, Excel, Extensible Markup Language (XML), EDI 810, or ERP American Standard Code for Information Interchange (ASCII) formats Browser-accessed payment request screens create electronic invoices on demand Transfer Files to ERP system where matching is performed Can also be configured to apply invoice validation logic prior to transferring invoices into the AP system (such as contract pricing or purchase order (PO) detail matching Matched items are queued for payment and exceptions identified If the payer uses their ERP system to perform the match, IRM receives a reply message that updates the status of invoices in IRM for vendor viewing If IRM applies the validation criteria, only invoices that meet the specified criteria would be transferred to the accounts payable (AP) system for automatic payment Information regarding payments made against matched invoices can be transferred to IRM for viewing, reporting and downloading by individual vendor 30 October 2002 2
Table 1: Features and Functions: Bottomline Invoice Receipt and Management (IRM) Exception Processing Invoice Validation Disputes Payments If the matching process takes place within the buyer s ERP system, exceptions can be managed through a browser-accessed Electronic Invoice and Presentment community experience The community experience creates a one to many online collaboration with all of their payers that are participating in the community The community experience provides full online dispute resolution with reason codes, a computer audit trail, workflow, payment initiation and reporting Exceptions can also be managed within IRM If the buyer uses his or her ERP system to perform the matching, messages are provided to the IRM module indicating invoice status Those invoices that match reflect a completed status and are sent to history Exceptions remain in IRM for browser-accessed modification or repair Built-in alerts and messaging are used to notify vendors or purchasers within the buying organization that invoices require attention Once corrective action has been taken, invoices can be electronically routed for approval and released for payment User permissions ensure that authorized personnel have visibility to date specific to that individual or group Invoice data can be validated within IRM against user defined criteria such as contract pricing or PO detail Once invoices have been uploaded from IRM, an ERP system can be used to apply any automatic matching logic against the invoice data and to queue the matched file for payment Invoice matches are transferred to the buyers AP/ERP system Exceptions remain in IRM for modification or repair. IRM can be configured to validate invoice data, based on user-defined business rules prior to ERP upload. For example, when validating invoices against contract pricing the cash invoice that is loaded would be checked against a table of line item numbers and contract prices. Invoices that have line item discrepancies would not automatically be uploaded to the payer s ERP, instead they would remain in IRM awaiting repair. The vendor reviews and corrects invalid line items and the status for the invoice changes to AP, which indicates that it is ready to upload into the AP system Post the status of an invoice that has been received, accepted and loaded into the accounts payable or ERP system Post the status that an invoice will be paid including the amount and time Interactive dispute resolution Adjustments for short shipments and line item detail EIPP integration is supported for vendors who prefer to use an EIPP community for management of disputes IRM can act as a reporting tool for payment detail, or it can be configured to complete the transaction through payment and remittance delivery This can be managed as a payment file or a pay/no pay message originating in the buyer s AP/ERP system 30 October 2002 3
Table 1: Features and Functions: Bottomline Invoice Receipt and Management (IRM) Reports Workflow Invoice Aggregation Payment can be initiated directly form the invoice-matching module within IRM. The IRM payment module provides a variety of payment instruments, including ACH, Financial EDI, Laser Check, Fed Wire Transfer and SWIFT messaging Positive Pay is available Workflow can be configured so that validated files go directly into the ERP system with payment initiation being directed from the ERP system and origination within IRM. Remittance information on payments can be e-mailed, faxed, or posted for review and downloaded in either an ASCII, XML or Portable Document Format (PDF) file format. IRM can be used in conjunction with the payment module to input payment requests and printing a paper check at a remote site after approvals have been made. An electronic payment could also be made with remittance advice delivered locally. Manual payment requests can be used as a means of creating an electronic invoice. Invoice status report shows invoice detail and status. Once invoices have uploaded, payer receives status changes. When payment is released, the remittance information is sent to IRM, so that the vendor can query the system. Information such as payment date, invoice number, description, total and line item amounts, payment type, and currency can be included. Vendors can download remittance information from the self-help portal. The last selection allows vendors to download only new remittance information. Workflow can be used to enter, modify, approve, disapprove or manually import files through IRM A single invoice can include multiple line items, with a different General Ledger (GL) code IRM can be configured to establish user-defined workflow, routing and business logic Workflow can be setup to route documents by supplier, ship-to location, general ledger code and cost center User groups or individual ID s within a user group can be assigned as recipients of documents using the established routing logic Documents flow to pre-defined individuals based on approval logic Routing can be configured to support an approval process Commerce One XML (CBXML)-based EIPP Invoice, EDI (ANSI 810), and CSV Document Image Integration for Tagged Image File TIF, Graphics Interchange Format (GIF), or PDF images Two standard manual data entry input formats: manufacturing invoices or servicing invoices Unattended file transfer Validation procedures send exceptions back to the vendor Analysis Bottomline Financial Resource Management Strategy 30 October 2002 4
IRM is one component of a broader Bottomline corporate Financial Resource Management strategy. Bottomline believes that every enterprise must manage financial resources; this encompasses invoicing and receiving payments, managing cash, and making disbursements. Bottomline s suite of Financial Resource Management offerings enables businesses and financial institutions to manage their critical financial transactions, cash decisions and trading partner financial relationships, leveraging the Web. Bottomline Applications include: Bottomline Payments and Cash Management Bottomline Electronic Invoice Presentment and Payment Bottomline Invoice Receipt Management Bottomline Electronic Banking and Information Reporting Bottomline Cash Management and Payments Bottomline s WebSeries Universal Payment Engine is a multipayment platform that enables organizations to address all payments, leveraging the Web to connect payment needs across an enterprise. Adding Balance and Transaction Reporting (BTR) provides a treasury department with a view into liabilities and assets before releasing payments. Bottomline offers a way to gather all bank account information, including account totals and detailed transaction data. Bottomline Electronic Invoice Payment and Presentment Bottomline s Electronic Invoice Presentment and Payment product is a system for business to business transactions that allows organizations to present invoicing information, provide online dispute resolution and accept payments over the Internet. The IRM product allows organizations to automate the matching of payments to open invoices in their ERP systems. Bottomline s EIPP solution, Nettransact offers the ability to print, e-mail, post-only, or post and pay invoices from a single invoice file. Bottomline Electronic Banking Bottomline s Electronic Banking solution supports a host of cash management functions, including balance and transaction reporting (prior day and current day) lockbox reporting, controlled disbursements, positive pay, check imaging, stop payments, and virtually any kind of electronic funds transfer instructions. The platform provides real-time host links for up-to-date information. Bottomline s Electronic Banking suite includes Web-accessed Trade-Finance, Securities and Custody, and foreign exchange modules with reporting capabilities. Invoice Receipt and Management Bottomline s IRM product is targeted at midsize to larger companies that engage in Web-based purchaseorder-based invoicing and payments. Bottomline also supports network-enabled collaborative applications, such as workflow and dispute management. Purchased-order based billing relates to invoices that are generated from discrete purchases and orders. IRM converts vendor invoices to an electronic data stream, aggregates the invoice details in a central location and normalizes the data to a standard that is compatible with most common ERP systems. To convert the invoices to an electronic data stream, IRM provides vendors the tools necessary to originate EDI, XML, and CSV formatted data for transfer to the IRM hub server. In addition, for those vendors who are not capable of originating electronic data, IRM includes a manual data entry facility where individual invoices can be keyed and submitted for processing by the payer. Once the input files are activated, IRM 30 October 2002 5
validates that data against payer-defined requirements and converts the data in for a standard presentation format compatible with the payer s ERP system. Bottomline s IRM product, in conjunction with other Bottomline products, allows new services such as trade finance and payment assurance to be linked to underlying transactions. Software can be installed at the enterprise level or within an application service provider (ASP) model. The base application includes a vendor self-help portal for presentation and remittance advice. Invoice aggregation, validation and normalization are also provided. Advanced applications within an enterprise include: Rules-based workflow and approval Document Management Straight through processing tools such as automatic payment, based on dollar thresholds, contract pricing validation, general ledger code assignment, two- or three-way matching, and pay-off or purchase order flips To provide straight through processing, Bottomline s IRM offering transfers invoice files to a payer s ERP system where matching is performed. IRM can also be configured to apply invoice validation logic prior to transferring invoices into the AP system (such as contract pricing or purchase order detail matching). Once invoice matching or validation has been accomplished, matched items are queued for payment according to trading terms and exceptions are identified. Exceptions can be printed or processed separately. Financial Transaction Server At the center of IRM is the Financial Transaction Server. On one side is the supplier, who authorizes invoices for the buyer and receives remittance detail and payments from the buyer. On the other side is the buyer, who generates purchase invoices, receives invoices from the supplier and authorizes payments. The Financial Transaction Server sits in the middle between buyers and suppliers and allows both of them to interactively collaborate on exceptions and also allows straight through processing for invoices with no exceptions. In addition, the Financial Transaction Server also transmits data back and forth between both supplier and buyer banks, facilitating better financial management. Invoice Validation The IRM module could also be used to provide the invoice validation criteria. In this case, invoice data would be validated within IRM against user-defined criteria, such as contract pricing or purchase order detail. The invoices that match would be transferred to the buyer s ERP system. Those invoices identified as exceptions would remain in IRM for modification or repair. This invoice data is accessible via a browser to internal personnel (such as buyer, receiving clerk or purchasing) for modification or repair. In addition, it could also be accessible to the vendor for repair or modification. Using the system s alert and e-mail messaging capability, workflow process and status notification can be provided. Validation Process IRM provides a flexible invoice validation process. Customers can select combinations of validation criteria based on the following parameters: Purchase order (PO) present, valid vendor and authorization present. The invoice will follow a different workflow path, depending on business rules chosen. For example, if there is an invalid vendor with no PO present and no buyer identification, then the buyer s sourcing unit must create a valid vendor, and the vendor must identify the buyer. In addition, the buyer 30 October 2002 6
must create a voucher and approve the invoice. Once all validation is done, or if the invoices meet the validation criteria up-front, the invoices can automatically be fed into the system. Rules-Based Workflow and Approval IRM can be configured to establish user-defined workflow, routing and business logic. Workflow can be setup to route documents by supplier, ship-to location, general ledger codes and cost centers. User groups or individual ID s within a user group can be assigned as recipients of documents using the routing logic established. Further, the routing can be configured to support an approval process using similar business logic. By activating the approval logic, documents flow to pre-defined individuals once they are approved. Rules-Based Matching and Reconciliation IRM includes a rules-based engine to perform matching of invoices and other source data. By activating matching and reconciliation logic, invoices can be automatically posted to the buyer s system of record without manual intervention. Exceptions can be identified and routed to the right person. Invoices can be matched on a number of invoice header or line item dimensions including: Purchase Order General Ledger or Cost Center Contract Pricing Product Codes Quantities Received For example, if a PO number is not valid, then the invoice should be forwarded to the correct person and marked Status incomplete. When the PO number is fixed, change the status to complete and allow the invoice to be loaded into the ERP system. Rules-based escalation based on matching criteria can also be applied, if invoices meet criteria such as older than 30 days and above a certain dollar threshold. Dispute Management Interactive dispute resolution is provided through the use of adjustment codes, comments and business rules. EIPP integration is supported for vendors who prefer to utilize an EIPP community for management of disputes. Vendor Self-Help Portal The vendor self-help portal connects buyers and sellers and posts payment and paid item status to an Internet portal. This helps to eliminate payment status phone calls to customer service. Invoice Aggregation Invoices can be aggregated in one of three standard data formats: EIPP Invoices in CBXML-based format, EDI using the ANSI 810 format, and the CSV format. Document image integration is supported using TIF, GIF or PDF images. There are two standard manual data entry formats: one for manufacturing invoices and one for servicing invoices. This allows buyers to manually input invoices for suppliers who are unable to transmit files electronically. Basic validation procedures send back exceptions to the vendor. Unattended file transfer is supported. Payments and Remittance 30 October 2002 7
Payables departments have a need to field vendor calls for invoice and payment status. One way to solve this problem is to give vendors access to remittance information, including paper check payments with date of issue. The IRM server can be expanded to accept remittance advice messages directly from the buyer s ERP payment system. The IRM server is able to process the invoice to an EIPP system, post the advice to a remittance advice portal for retrieval by vendors that do not participate in EIPP, or e-mail or FAX advice directly to the vendor. IRM can act as a reporting tool for payment detail, or it can be configured to complete the transaction through payment and remittance delivery. This can be managed as a payment file or a pay/no pay message originating in the buyers ERP system. It can also be initiated directly from the invoice-matching module within IRM. The IRM payment module provides a variety of payment instruments, including ACH, Financial EDI, Laser Check, Fed Wire Transfer and SWIFT messaging. Remittance information can be e- mailed, faxed, or posted for review and downloaded in either an ASCII, XML, or PDF format. Other messages include Positive Pay, Office of Foreign Asset Control (OFAC) and presentment of other documentation, such as truth in lending statements or 1099 forms. Pricing Pricing is dependent on the particular target market. For example, on hosted for profit sites, license, maintenance and transaction fees are charged. GSA Pricing No. Competitors Billingzone Billingzone started as a partnership between Perot Systems and PNC bank. Billingzone aggregates bills for corporate payers at a single site. As a consolidator, Billingzone tries to group as many billers and payers under one network as it can. Billingzone is an application service provider, using the Web to give partner companies access to one another s invoices using Billingzone.com. Billers and payers must go to the Billingzone site to use the services. Billingzone provides separate products for the biller (arconnect) and payer (apconnect). The apconnect product allows companies to utilize purchase order, shipping or receipt data to create payment instructions for their suppliers and post the appropriate remittance information on the Billingzone Web site for suppliers to review. ERP Packages ERP packages from Peoplesoft, Oracle, SAP and J.D. Edwards also offer some of the same functionality; however, most often they are focused on only offering the functionality to their own customers. This is slowly starting to change. ERP packages offer tight integration within their own accounting packages for functions such as reconciliation. Peoplesoft currently has the most advanced EIPP functionality out of all of the ERP vendors. Xign Xign focuses exclusively on the business-to-business (B2B) electronic invoice and payment market and is funded largely by venture capital funds. Xign s largest customers include Sprint, Bristol-Myers Squibb, T- Mobile and Charles Schwab & Company. In addition, Xign has signed a partnership agreement with MasterCard to deliver an electronic B2B (eb2b) payment and transaction settlement service. The first release of Xign s original solution, the Xign Payment Services Network, provided electronic payment 30 October 2002 8
capabilities. In April 2002, Xign expanded its offering with additional invoice-related functionality that includes three options: preferred provider organization (PPO)-populated invoice (pre-matched), e-invoice Web form entry, and e-file mapping and capture. The Xign service features a shared-supplier network where suppliers can enroll over the Web to activate an account. Once activated, that supplier can be paid by any buyer on the Xign epayables network, which offers functions such as automated invoice and payment approval, real-time invoice and payment status, payer workflow, collaborative dispute management, ERP integration, full audit and archival, and supplier activation services. FileNET Acenza Payables Acenza allows invoices submitted via paper, facsimile (FAX) or electronic format to be automatically captured, filed, and routed for processing and approval. Although, Acenza does interface with ERP systems, it does not provide the data validation function offered by Bottomline s IRM product. Strengths Focused on Payer Many of Bottomline s competitors have focused on billers and have not yet developed systems focused on payers. Bottomline is well ahead of its competitors in developing functions specific to the payer market. For example, Bottomline allows payers to define business rules for how to handle exceptions. Bottomline developed a product specifically for payers, rather than enhancing a product developed for billers to try and make it appealing to payers. Data Validation Bottomline IRM offers the option of validating data before it goes into the ERP system. Although competitors interface with ERP systems, most provide only flat file exchange and don t normalize data before it goes into the ERP system. Bottomline offers customers a choice of having the ERP system process exceptions or having IRM catch exceptions and make sure they are cleaned up before going into the ERP system. Bottom Line Payables Expertise Unlike other vendors, Bottomline has other products focused exclusively on payments. For example, IRM interfaces with the WebSeries product to allow for remote check printing and centralized management of the payments process. In addition, the IRM payment module provides a variety of payment instruments, including ACH, Financial EDI, Laser Check, Fed Wire Transfer and SWI.FT messaging. Bottomline also purchased Bankquest and has an extensive line of cash management products, giving it expertise on the corporate cash management process. This allows payment assurance to be linked to the underlying transactions. Financial Stability Bottomline has several different product lines and is not solely dependent on EIPP for revenue. Bottomline has more then 5,000 WebSeries customers. Strong Rules-Based Matching and Reconciliation Invoices can be matched on a wide variety of invoice header or line item dimensions, giving payers the ability to better match their own business processes. For specified items, rules-based escalation based on matching criteria allows for certain payments to receive higher-priority processing status. 30 October 2002 9
EIPP Interfaces Integration with Bottomline EIPP packages can be provided for vendors who prefer to uses an EIPP community for management of disputes, rather than IRM. Allows Straight-Through Processing for Reconciliation If there are no exceptions, IRM loads the data directly into the ERP system, allowing for straight-through processing with no manual intervention. IRM performs functions such as instant automatic payment based on dollar thresholds, contract pricing validation, general ledger code assignment, two-way or three-way matching, and payoffs or purchase order flips. Enables Universal Receipt of Electronic Invoices Across a Payer s Supplier Base In addition to the electronic transmission of invoices, Bottomline provides a graphical user interface into IRM, which helps billers and payers manage the normalization of invoice records into a structure that the payer s AP system can read. Bottomline also enables suppliers to create invoices online using standard templates; this is mainly useful for small enterprises lacking technical resources. Bottomline also supports the creation of an electronic invoice by flipping a purchase order issued by the buyer. Offered Both as ASP or Packaged Application Bottomline gives customers the flexibility of choosing an outsourced ASP implementation or installing IRM as an in-house application. Limitations Financial Resource Management Components Not Yet Fully Integrated Although Bottomline has an integrated Financial Resource Management Strategy, not all of the components are yet fully integrated. Need to Change Payer Business Processes Bottomline provides robust technology for payers; however, payers must be willing to change business processes to support the automated handling of invoices, rather than manual routing, which is a challenge. Limited Number of Customers IRM is a new offering and has a limited number of overall customers. Even though IRM is offered as a packaged application, still there are a limited number of customers in production. Must Adopt Other Bottomline Products for Additional Payment Options Bottomline provides support for a large variety of payment options, but they are not all provided by IRM. This means some customers must purchase additional components or interface to other Bottomline products. Insight IRM is a good option for payers looking to automate the order to cash process and who require robust exception and validation before submitting invoices to the AP system of record. In addition, current users of other Bottomline payments products will be able to take advantage of value-added payment options. 30 October 2002 10