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© 2013 Ariba, Inc. All rights reserved.
Business Networks
Improve Financial Efficiency
with E-Invoicing
James Tucker, Senior Director, Network Strategy and Marketing [email protected] | @jbtucker3 | +1 650-390-1702
The strategic weapon – business network Leading the networked economy transformation
“Networked enterprises are
50% more likely to be a
market leader.”
2 © 2013 Ariba, Inc. All rights reserved.
Exceptions and inquiries
Discounts and payments
Matching and approvals
Common challenges in invoice-to-pay processing
Exceptions and inquiries
Discounts and payments
Matching and approvals
Receipt and capture
Receipt and capture
High cost of paper invoices
Lack of compliance
Too many exceptions
Lack of control
“Nearly 77% of all incoming invoices
are still paper based.”
– Aberdeen, 2012
“15% of invoices have exceptions
adding 6.6 days to the cycle.”
– TAPN, 2010
“50% of prenegotiated discounts are
never captured.”
– Aberdeen, 2012
“$9 million in contract leakage
per billion in spend on average.”
– The Hackett Group, 2012
3 © 2013 Ariba, Inc. All rights reserved.
© 2013 Ariba, Inc. All rights reserved. 4
D r . M i c h a e l H a m m e r
Receipt & Capture
© 2013 Ariba, Inc. All rights reserved. 5
67%
25%
7%
% Electronic
BIC LAG AVG
$3.34
$6.29
$16.67
Cost per Invoice
BIC LAG AVG
Invoice / FTE
BIC LAG AVG
33K
11K
7K
Discounts & Payments
Matching & Approvals
Receipt & Capture
Receipt & Capture
• Mail / e-Mail / Fax
• Data Entry / Outsourcing
• Scanning / OCR
• E-Invoice (Ariba Network for
EDI, XML, CSV, Supplier
Portal, …)
Exceptions & Inquiries
The cost of being
less than world class
is growing.
Goeff Colvin
Sr. Editor, Forbes
‘Talent is Overrated’
“
”
Exceptions & Inquiries
© 2013 Ariba, Inc. All rights reserved. 6
Discounts & Payments
Matching & Approvals
Receipt & Capture
• Exceptions caught before
posted to ERP
• PO and Non-PO (i.e. contracts)
• Supplier Portal (self serve)
• E-Invoice (EDI, XML, CSV, …)
15%
35%
50%
% AP Staff on Inquiries
BIC LAG AVG
4%
17%
30%
% Exceptions
BIC LAG AVG
Exceptions & Inquiries
Exceptions & Inquiries
Invoices
BUYERS
AP
AcctCoding
Contract Match
Price Compliance Ship to
Address
InvoiceNumber
InvoiceDate
Bill-ToAddress
VAT/GST Compliance
Qty Threshold
Unit Amt Threshold
98%+ Auto Post
SUPPLIERS
AR
Errors
Exceptions
“Smart Invoicing”
There are no exceptions
to the rule that everybody
likes to be an exception
to the rule.
Charles Osgood
“
”
Matching & Approval
© 2013 Ariba, Inc. All rights reserved. 7
Discounts & Payments
Matching & Approvals
Receipt & Capture
Matching & Approvals
Exceptions & Inquiries
0.2%
0.48%
0.94%
% Leakage
BIC LAG AVG
85%
70%
50%
1st Pass Match
BIC LAG AVG
• Invoice to PO (PO-Flip®)
• Invoice to Contract
• Invoice to Goods Received
• Routing & Approval Workflow
• Exception handling Workflow
Source: Hackett Group 2011 P2P Benchmark Report
4
10
21
Days to Approve
BIC LAG AVG
0%
20%
40%
60%
80%
100%
PO% Non-PO%
Do not look for
approval except for
the consciousness
of doing your best.
Andrew Carnegie
“
”
Discounts & Payments
© 2013 Ariba, Inc. All rights reserved. 8
Discounts & Payments
Matching & Approvals
Receipt & Capture
Discounts & Payments
Exceptions & Inquiries
1) Capture missed discounts through smart
invoicing approach
2) Rapidly enable more suppliers to increase
the amount of spend under discount
3) Introduce sliding scale discounts for savings
at any point along the invoice payment term
36%
1% 0.25%
APR on Short Term Cash
BIC LAG AVG
20%
3-5%
1%
% Suppliers with Discount Terms
BIC LAG AVG
50%
10%
% Discounts Captured
BIC LAG AVG
95%
Price is what you pay.
Value is what you get.
Warren Buffett
“ ”
Exceptions and inquiries
Discounts and payments
Matching and approvals
Solutions for common challenges in invoice to pay
Exceptions and inquiries
Discounts and payments
Matching and approvals
Receipt and capture
Receipt and capture
Capture 100% of your invoices in a
digital format from any supplier
regardless of volume, location,
or capabilities
Resolve invoice errors at point of submission with
self-serve supplier portal and over 80 network business
rules
Control payment timing and maximize
early payment discount capture
Electronic payment with detailed
remittance
Match invoices against POs,
contracts, and GRs
Workflow routing and approval
Flexible on-premise or cloud deployment
Ariba Network
PO and invoice
automation
Status and remittance
XML, EDI,
and CSV
Supplier portal
FAX
Paper
Scanning and OCR
PO matching
Contract matching
Goods receipt (GR)
matching
Workflow routing and
approval
Discount professional
Accounts payable (AP)
in SAP software
ACH and detailed
remittance
SAP General Ledger
9 © 2013 Ariba, Inc. All rights reserved.
The business case for e-invoicing It’s as easy as 1+2+3+4 = $10 million savings per $1 billion in spend
CHALLENGE SAVINGS OPPORTUNITY SUCCESS
1. Process $1 million per $1 billion in spend for average to large
Payables and Procurement organizations - Billentis
2. Discount $2 million + in discount savings for every $1 billion in
discountable spend – Aberdeen, Ariba
3. Working
capital $2.7 million in working capital impact for every $1 billion
per day of improvement of DPO, DSO, DIO
4. Compliance $4million in savings leakage for
every $1 billion in spend under contract – Hackett
4-for-1
1-for-1
2-for-1
3-for-1
Source: Billentis, The Hackett Group 2012 P2P Benchmark Report, Aberdeen, and Ariba results
Republic Service
© 2013 Ariba, Inc. All rights reserved. 10
© 2013 Ariba, Inc. All rights reserved.
Business Networks
Improve Financial Efficiency
with E-Invoicing
James Tucker, Senior Director, Network Strategy & Marketing [email protected] | @jbtucker3 | +1 650 390 1702