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AP – A Catalyst for P2P Transformation
Agenda
State of Accounts Payable
Paradigm shift in the AP Role
Administrator
Collaborator
Strategic business unit
The new world of P2P
Straight Through Processing
Rip off the Scanning Band-Aid
Mobile
Supplier Relationship Management
Working Capital Management
Top Priorities for AP
Need to improve days payables outstanding (DPO)
Need to improve visibility into invoice/payment data
Need to reduce invoice/payment related errors
Need to improve collaboration (internal & external)
Need to improve processing efficiency
Need to migrate off paper-based processes
13%
17%
19%
24%
44%
52%
©Ardent Partners - 2013
Operational Capabilities with AP
Standardized AP processes
Working capital optimization
policies
Measurement of key AP metrics
Linkage across P2P process
79%
48%42%
32%
17%28%
36%43%
Currently Exists Plan to Implement
©Ardent Partners - 2013
Why P2P is Key…
Analyze Spend
Source
Contract
ProcureReceive
Invoice Processing
Payment
Support the business by: Managing enterprise spend Ensuring the right goods and services
are purchased at the right price Identifying (and managing) the
highest-value suppliers Manage transactions and compliance
Also focused on: Supply Risk Savings Optimize working capital Supplier Relationships
P2P
Top 10 Benefits of a Holistic P2P Process
Better identification of sourcing
opportunities
Improved contract compliance and a
reduction in maverick spend
More spend under management
Greater automation, visibility and control
across AP
Reduction of exceptions / errors
and improvement in processing efficiency
& cycle time
On-time payments suppliers (or early).
The ability to track supplier performance
The ability to measure and improve
departmental performance and customer service
The elevation of AP from a back-office
function to a strategic component
Significant working capital and discount
savings.
Agenda
State of Accounts Payable
Paradigm shift in the AP Role
Administrator
Collaborator
Strategic business unit
The new world of P2P
Straight Through Processing
Rip off the Scanning Band-Aid
Mobile
Supplier Relationship Management
Working Capital Management
Paradigm Shift Occurring with AP
Administrative
• Manual tasks• Data Entry• Repetitive • Tactical• Inefficient• Outdated
• Efficiency/visibility• Value-add• Supporting• Knowledge sharing• Data• Automation• AP Clerks AP Analysts
CollaborativeStrategic Business
Unit• Collaborative• Intelligence / Analytics• Performance Driven• Procure-to-pay• Working Cap Optimization• Supplier Management • Treasury/Procurement Insights
Collaboration, Not a Trend
AP & Tre
asury
AP & Pro
cure
ment
AP & Li
ne of busin
ess
AP & Supplie
rs
71%59% 52% 49%
29%41% 48% 51%
Good Collaboration Poor or No Collaboration©Ardent Partners - 2012
This is what your AP operation can do…
Metrics Best-in-Class All Others
Cost to Process an Invoice $2.20 $13.10
Number of Invoices Processed per FTE per month 3,559 1,335
Percent of Invoices Processed Straight-Through 44.2% 18.4%
Percent of Suppliers that Submit Electronic Invoices 41.8% 14.5%
Average Time to Process an Invoice 3.3 Days 13.5 Days
Paid On-time Percentage 91.4% 70.8%
©Ardent Partners - 2013
Agenda
State of Accounts Payable
Paradigm shift in the AP Role
Administrator
Collaborator
Strategic business unit
The new world of P2P
Straight Through Processing
Rip off the Scanning Band-Aid
Mobile
Working Capital Management
Today’s world is about flexibility and extensibility
Supplier Registration
Supplier Financingwith CapitalAid
Latin America Compliancewith Invoiceware
Tradeshift’s Open Platform Approach
TRADESHIFT PLATFORMDocument Transmission, Statuses, Messages, Integration, Security, API
SupplierBuyer
Order Management
Electronic Invoicing
Business Firewall
CloudScan® (Paper)
Collaborative Workflow
Financial Solutions
Build Your Own App
Supplier Management
Ability to expand functionality as needed
Invitation to send invoices electronically
Join Tradeshift
Create invoice using Tradeshift
Web AppInvoice
transmitted electronically via TradeshiftCreate invoice
using existing accounting
tools
Email invoices
Invoices converted to
electronic format
Invoice details validated by
supplier
Paper Invoices
Invoices converted to
electronic format
Invoice details validated by AP
staff
Invoices with
exceptions are
flagged
Tradeshift CloudScan
PAPER
Electronic Supplier Enablement Benefits Everyone
# of invoices
Size of Suppliers
# Of suppliers
Large Medium Small
Scanning is a Band-Aid. Rip it Off!
Supplier Integration
Supplier Integration Supplier Integration
Supplier Validated CloudScan
Supplier Validated CloudScan
Web ApplicationPlug & Play connectors
Plug & Play connectors
Plug & Play connectors
CloudScan EnterpriseCloudScan Enterprise
CloudScan Ent.
CloudScan with AP validation
CloudScan with supplier validation
Web Application
Supplier Integration
Plug & Play connectors
Supplier Integration
Plug & Play connectors
Plug & Play connectors
Supplier Integration
100% (invoice volume)
100% (suppliers
)
CloudScan: Supplier validation of invoices
CloudScan: AP validation of invoices
All items CloudScan Escalation Code Approve Supplier Requests
Collaborative Workflow – Internal and External
Supplier Management – for AP & Procurement
Streamline supplier onboarding process as part of Tradeshift platform and workflow process
Integrate with Dun & Bradstreet, IRS and other 3rd party data sources to validate supplier authenticity
Extend your corporate brand to the supply chain process
What’s the top incentive for suppliers?
Get paid on time…or even early!
Working Capital Optimization to Better Supplier Relationships
Seamless integration to Tradeshift platform and multi-pronged onboarding makes for fast adoption of suppliers
Tradeshift mobile workflow increases captured discounts
Match suppliers to the right program: Dynamic Discounting, SCF products from Citibank and other finance options
AN IDEAL PLATFORM FOR LAUNCHING EARLY PAYMENTS
Suppliers are arm-wrestling DPOs with the
Buyers …
… And at the same time financing is a scarce
and expensive resource …
Today’s Payment Reality
Alt
ern
ati
ve f
undin
g c
ost
SC
F
# suppliers
Payablevalue
Alt
ern
ati
ve f
undin
g c
ost
Bu
yer
cen
tric
# suppliers
Payablevalue
Su
pp
lier
cen
tric
Bu
yer
Oth
er
Offering the value to your entire supply chain
Dynamic Discounting Should be Easy
$2.1M savings for every $1B spend. That’s Strategic.
Process Automation
■ Eliminate paper invoices, reduce invoice approval cycle time, and improve visibility and overall AP processes
Supplier Management
■ Shared supplier portal enabling suppliers to view and resolve invoice exceptions and reduce supplier inquiry calls
Early Payment Discounts
■ Discount program management and dynamic discounting resulting in increased discounts and >20% return on cash
Typical Business Case
Eliminate manual process of checks and invoices
Increase early payment discounts
Reduce Supplier support inquiries
Saving of $5 per invoice achieved through migration from a paper to an electronic method, and assume 90% adoption of 100,000 invoices resulting in savings of $450,000 per year.
Assume a 15% reduction in the invoice exception rate at an additional $10 per exception which results in savings of $150,000 per year.
Assume 10% discount penetration earning a 1.5% discount rate for a$1.5M benefit…growing to $3M with an automated technology platform.
$450K
$1.5M
$150K
$2.1M
Total estimated benefit
$1.5M
2X increase in early payment discounts with additional WCO services
“So impressed. Works beautifully.” “Tradeshift is awesome and free to use!”Selina Smith, Graphic designer in
Ottawa@selinalsmith
Clint Tabone, Freelancer in Malta
@clinttabone
Robb Sullivan, home theater designer in HoustonCustomers include Jennifer Lopez and Jay Z
@AVAdvice
“Tradeshift rocks!”
Thank You!