Best Practices in Managing Spend

PeopleSoft Enterprise Financial Management Applications

April 5, 2006 @ 10:30 am

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Agenda

Spend Management Issues Best Practices How PeopleSoft Enterprise Delivers Q&A

Spend Management Issues

Maverick SpendMaverick Spend

Underutilized AssetsUnderutilized Assets

Excessive ComplexityExcessive Complexity

Ineffective Cost MgmtIneffective Cost Mgmt

Best Practices in Managing Spend

Visibility into transactions and proactive monitoring Monitoring and analysis based on policies

Automated processing with built-in internal controls and workflow Expense Payables

Self-Service Management and Issue Resolution Tools Employees, Suppliers

Benefits Realized with Best Practices

Enforcement of spend against policies on an ongoing basis

Less time on non-value add activities More transactions per FTE at a lower

cost Fewer errors Improved relationship with suppliers

Delivered Best Practices

Expenses Payables eSettlements

Best practice features are already available in many of the solutions

you own today.

Travel and Expense At-a-Glance

Manage Travel and ExpenseManage Travel and Expense

• Supplier Negotiations• Cost Visibility, Controls & Audit

TravelTravel CreateCreate ApproveApprove PayPayAuditAudit

Credit Card Credit Card ProvidersProviders

EmployeesEmployees

•Enforce policies, procedures

•Preferred suppliers

•Ensure compliance

•Heavy reliance on automation

•Access to timely and comprehensive travel data

•Maverick spenders

•Top Spenders

•Trend (Corporation, Industry, Sector)

•Centralize travel management and supplier negotiations

Enforcing Enforcing Compliance with Compliance with Company PolicyCompany Policy

Submitting Expenses

Manage taxable expenses

Configurable accounting by expense

Automated deductions

Preferred vendor tracking

Enterprise Expenses

Expenses Summary Approvals

Visibility into Visibility into Ongoing Ongoing ActivitiesActivities

Leverage delivered analytics to gain business insight

Visual alerts provided on summary approvals to easily identify out-of-compliance transactions

Expenses Analytics

Approvers may be configured for different levels of authorization to modify transactions by transaction type.

Travel and Expense ProcessingThe Paper Premium

$0

$5,000

$10,000

$15,000

$20,000

1 Year 2 Year 3 YearManual cost @ 48 / Expense report*

Electronic cost @ 8 / Expense report

• $1 Billion+ companies with

132,000 expense rpts / year

• Wastes $15,840 Millionover 3 years

• Electronic transactions cost 83% less

Other Benefits of Automating Travel and Expense

• Credit card Incentive strategies

• Supplier negotiation

• Audit control* Sources: Aberdeen Group, Best Practices in Category Spend Management: Travel

Enable automated integration to Projects

Enhance corporate card payment reconciliation

Rollover prior year budget allocations for travel

Pre-configured workflow for approvals & audits

Configurable Summary Approvals

Expenses 8.9 Enhancements

Benefits of Best Practices

• Use of pre-trip travel authorization

– Enforce compliance to company policy.

• Enable My Wallet expense entry

– Spend more time on strategic tasks.

• Automate Expenses policy and compliance

– Visibility into spend using analytics.

• Reduce costs through improved negotiations with travel suppliers.

Procure-to-Pay At-a-Glance

SourceSource PurchasePurchase SettleSettle

• Supplier Selections

• Negotiations

• Requisitions

• Approvals

• Orders

• Receipts

• Invoices

• Payments

Manage Suppliers & ContractsManage Suppliers & Contracts

• Supplier Performance • Expirations & Renewals

Best Practice – Streamline Payables

Prevent non-PO invoices Enable duplicate vendor setup checking Apply 2/3 way matching Eliminate paper invoice (use ERS, web-

invoicing, XML/EDI) Enable Supplier self-service Take advantage of payment discounts

Best Practice – Enable Duplicate Invoice/Vendor Checking

Invoice Controls

Vendor Controls

Matching Lines

Purchase Order Invoice Receipts

• Streamlined matching process

•Configurable Match Rules attached to

vendors

• Usage of Document Association Criteria

• Header Level Matching

• Expedite Match Exception Handling

• New Matching Workbench

• Debit Memos – Auto-Adjustment

• Supplier Metrics

• Use of Summary Invoice

Best Practice – Automate 2/3 Matching

Matching Headers

Purchase Order Invoice Receipts

Match Rule Control Attached to the Vendor

•Continue if True•Continue if False•Always Continue**NEW

•Match•Exception•Debit Memo

Payables ProcessingThe Paper Premium

Manual cost @ 8.50 / invoice

Electronic cost @ 3.44 / invoice 0

$1,000,000

$500,000

$1,500,000

$2,500,000

$2,000,000

1 Year 2 Years 3 Years

CumulativeCost Difference

Sources: Gartner Inc., Invoicing and Payments: The Payer Value Proposition and Oracle Corp.

• $2.0 Billioncompany with100,000 invoices / year

• Wastes $1.5 Millionover 3 years

• Electronic transactions cost 60% less

Best Practice – Enable Supplier Self-Service

eSettlements fully integrates with your PeopleSoft Payables :

Requires activation, not implementation Payables setup and data is automatically

pulled New roles / workflow / security are available Buyer and Supplier Self-Service facilitates

enabling of new users Web-invoicing allows your supplier to key-in

invoices effortlessly

eSettlements Business ProcesseSettlements Business Process

B2B Collaborative Framework HTML

Best Practice - Web-based Invoicing

Step 1 – Supplier logs in theSupplier Self-Service

eSettlements

Supplier

Step 2 – Supplier selects information in restricted list

of values, copy from his PO lines

(or his receipts)

Step 3 – Once the web-invoice

is completed, the suppliersubmits it to Buyer review

Step 4 – Buyer reviews the invoice and authorize to

be registered

Step 5 – The supplier can Print a copy of the invoice

For his own recordsOr request an XML file for

ERP integration

Step 6 – The invoice followsthe buyer approval process

For payment

Web-based Invoicing Benefits

Easy to use (no knowledge of EDI/XML)

Eliminate Paper Allows vendor more control over

accuracy of data Eliminates re-key entry errors Eliminates lost and slow mail No software to buy for the vendor Route the invoice to the appropriate

approver

Speed

Ease of use

Quality

No cost

• Streamlined Straight-though-Processing Summary Invoice Entry Re-designed Quick Invoice Entry Enhanced Voucher with Balancing Voucher Excel Upload

• Enhanced Controls and Compliance Flexible, Configurable Match Rules Header Level Matching and Tolerances Matching Workbench - Match Actions and Drill-

down Debit Memos –Auto-Adjustment Document Association (formerly Receipt Aware) Matching Workflow and Notifications

Payables 8.9 Enhancements

• Improved Performance and Usability Improved Payables Inquiries with Configurable

Search Initiate Real-Time Processing Across Payables Standardized Archiving Tool for Financials Compliance - JFMIP VAT Improvements

• Payables Integration Real Estate Management Financial Gateway (through Cash Management) Maintenance Management Claims Management (through Purchasing) eSettlements

Payables 8.9 Enhancements

Benefits of Best Practices

• Automate requisition/PO process

• Use automatic matching engine with business rules

– Drive down costs associated with paper processing

and manual activities.

• Enable supplier management tools- Utilize early payment discounts and improve working capital management.

• Enable supplier self-service- Improve supplier relationships and reduce supplier inquiries.

AQ&

Payables/eSettlement: amrita.mehrok@oracle.com

Travel & Expenses: diana.gray@oracle.com mark.sinn@oracle.com

Contacts