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Studies show that top performing companies are using “touchless” (or straight-through) processing to process invoices in 1-3 days, compared to more than 15 days for the average company. This enables them to maximize discount capture and “best pricing” through spend analysis and contract management. Every invoice that is processed in a touchless manner saves a tremendous amount of time, resources and money. Many top performing companies have implemented touchless processing and they continue to reap the benefits and improve year after year. This 45-minute session with industry expert David Hay will discuss: -How touchless processing can be achieved -Process change and automation -Collaborating with procurement to achieve touchless transactions -Usage of cloud and mobile technologies
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Perfect Your
Touchless
InvoicingHi, thank you for joining us! We will begin shortly. In the meantime, please
keep in mind:
• We want this to be an interactive webinar, enter your questions in the
Q&A box
• Slides and recording will be sent out afterwards
Perfect Your
Touchless
InvoicingHi, thank you for joining us! We will begin shortly. In the meantime, please
keep in mind:
• We want this to be an interactive webinar, enter your questions in the
Q&A box
• Slides and recording will be sent out afterwards
Introductions
David Hay
Senior Process Consultant
Member Advisory Board at The Financial Operations
Network
Vishal Patel
Senior Marketing Manager
Tradeshift
Agenda
• Market Research
• Process Change
• The Role of Automation
• About Tradeshift
• Business Case Calculator
• Q&A
8 Top Issues for CFOs in 2014
1. Avoid choking off revenue growth
2. Become a transformation agent.
• Consolidate middle management. “Shared Service Centers”
3. Keep up with increasingly complex compliance requirements.
• SOX, OFAC, FACTA, Affordable Care Act
4. Plan for better business-performance analytics.
5. Invest in the digital revolution
• A key source of competitive advantage “the cloud, mobile”
6. Make sure that managing innovation is a priority
7. Address mounting pressure on financial capabilities
8. Remember: You’re in the driver’s seat
CFO MAG. 12/13
Top Priorities for Finance Executives
Improve Visibility into cash flow/cash
management78%
Lower Invoicing-processing costs 44%
Develop effective measures to
gain visibility into performance35%
Lower costs associated with
payments / settlement35%
Aberdeen Group 2014
#1 Challenge facing AP and Procurement
Managing paper documents
Most Commonly Used Invoice Delivery Methods
Paper = Challenges
• Unable to reconcile in a timely manner
• Unable to handle exceptions in a timely manner
• Data entry errors
• Inability to capture discounts
• Inability to meet supplier requests to shorten payment times
• Difficulty finding or managing paper.
Initial Steps To Consider
Consolidate AP into a central location / shared service center
• ALL Invoices sent directly to AP
Look at the whole process from PO delivery to Payment and RA
delivery
• Suppliers who are asked to use e-invoicing expect
e-purchase orders.
Process Change
Improving Process By Reducing Errors
ID the Source
Poor processes - Invoices sent to buyers not AP
AP and Sourcing not collaborating
• No PO’s or PO changes not communicated to AP
• Lack of support for AP’s effort.
Master File not maintained
• 3 to 7% of vendors change their names or merge within a year
• Over half of vendors or one time vendors have no activity in a year.
• No standards in place for entering information
• Multiple entries for the same company
11
Look for Ways to Improve
1. Processes to be automated
2. Steps to be eliminated
3. Steps to be changed
4. Focus staff on value added processes
5. Visibility across P2P
1. Process to be Automated:
• RFQ and PO/PO change delivery
• Invoice receipt
• Workflow
• Payments and Remittance Advice Delivery
• Customer service
2. Steps to be Eliminated
Approvals on PO or Catalog backed Invoices that are from trusted
suppliers and or fall below a pre set value
Move to Audit rather than approval
On invoices that are subject to late payment penalties
• 18% now being charged by many vendors
On invoices that are eligible for discounts
3. Steps to be changed
Move to Negative or assumed approval
• In this case the document to be approved is sent to the approver with
the note that “The invoice will be automatically approved if no reply is
received in x days”.
Use PO’s for all transactions
• Introduce a Limited PO, this PO can be used for all transactions under a
pre set value (GE was $1500)
• Does NOT need to be mailed to vendor, only quote PO number
• Use Blanket POs
4. Focus Staff on Value Added Processes
Spend Analysis
Aberdeen Group estimates that US business leave $260 billion on the table by
not taking advantage of discounts and contract negotiation
Companies are often buying the same product from the same vendors at
different prices
Rationalize and Standardize
Contract Management & Compliance
Track and report off contract spend
Reduce maverick spend
One major manufacturer found that only 33% of his MRO purchases were on
contract. A “loss” of over $60 million.
4. Focus Staff on Value Added Processes – Cont’d
Early Payment Discount Capture
Companies with the best cycle times can target discount capture
• 2 /10 net 30 can return over 35%. Offer discounts as an alternative to
extended terms.
One major corporate estimated a $200 million addition to the bottom line from
discounts
One company offered 1.5 / 15 or 60 days
Day 0 Day 10 Day 30
Option 1: Pay $100 on Day 30
$100 minus Interest
= $99.73 @ 5%/yr Interest
20 days
$100
Day 0 Day 10
Option 2: Pay $98 on Day 10
20 days
$98
$98 + Interest
= $100
Day 30
Early Payment Discount Capture - Lucrative Returns
$2 Interest over 20 days implies
Interest Rate of 37% per year!!!
Example: Typical 2/10 Net 30 on $100 Invoice
5. Improve Visibility Across P2P
Automation allows for the data to be visible
from the moment of entry.
• Accruals can be accurately made
• Invoices can be tracked by AP, purchasing and Vendors from entry
through to payment
Finance can accurately forecast cash requirements
Better Customer service
Management can track progress against goals
The Role of Automation
AP Automation shows the best returns
Average Cost Per Transaction Manual Automated % Savings
Purchase order $17.90 $12.32 31%
Purchase order acknowledgement $6.27 $3.31 47%
Advanced ship notice $13.75 $8.58 38%
Invoice $16.33 $5.65 65%
Remittance $18.79 $7.75 59%
Aberdeen Group
Elements of an automation system
E-PO delivery
Workflow engine
Scanner/OCR
E-invoicing
Network for document delivery and customer service
Automating the Complete Process
Percent Invoices Processed Straight Through
All Industries Percentage
Lower Quartile 0%
Median 0%
Upper Quartile 30%
Average 20%
Technology Implemented Not Implemented
Front-End Imaging 53% 47%
OCR/Data Extraction 34% 66%
Automated Workflow 58% 42%
Vendor Web Portal 31% 69%
Traditional EDI 47% 53%
Web-Based EDI 31% 69%
e-Invoicing/EIPP 34% 66%
T&E Expense Report Software 56% 44%
P-Card 59% 41%
Commercial Card 48% 52%
TAPN 2013
Implemented Automation Technologies
8 Top Issues for CFOs in 2014
Invest in the digital revolution
• A key source of competitive advantage “the cloud, mobile”
Cloud based solutions allow companies to be more flexible, scale as
business changes, allow business to adapt to change more quickly,
and meet the needs of a global workforce.
CFO and the Cloud
Cloud technology is seen as a viable and useful addition to the
technology toolkit
57% of CFOs say they would consider migrating some IT systems
to a cloud environment.
CFO Publishing 12/13
Business Drivers for Cloud Adoption
Overall Cost of IT
Infrastructure45%
Competitive Advantage 31%
Inflexibility of current
infrastructure19%
Need to support Additional
users or Services13%
Why the Cloud
Source: Aberdeen Group
Summary
P2P collaboration between Purchasing and AP is critical to
success
Move to e-documents, PO to RA
Look for ways to eliminate bottlenecks
in the receipt/approval process
Use STP to streamline the matching process
Establish metrics, monitor and continuously improve
1. Procurement advantage, through better cost analysis and
contract management
2. Cash management advantage, through better forecasting and
working capital management
3. Discount and rebate advantage, plus penalty avoidance
4. Compliance with SOX and other government regulations
5. Cost advantage
The top-performing companies
gain major benefits in 5 key ways:
Amazing things happen when businesses connect
Tradeshift brings all companies, big and small, together
to transact, connect and collaborate with each other.
Enterprises
Work more easily and productively
with their entire supply chain,
anywhere in the world.
Suppliers
Free electronic invoicing, faster
payments and predictable cash flow
is only the beginning.
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
Tradeshift’s balanced value proposition
Supplier Buyer
Communicate & collaborate
directly with your buyers.
Lower costs for your entire supply chain.Manage and track POs,
invoices, and more.
Connect via web, integration
or any accounting software.
Free. No supplier fees. Ever.
Communicate and
collaborate with suppliers.
Innovate past invoicing on
top of an open platform.
One platform for all your
business needs.
Reduce cost and friction for
your entire supply chain.
Who We Work With
SBS
Some large suppliers on the Tradeshift Network:
Business Case Calculator
Questions
Thank YouVisit tradeshift.com/resources
Slides and recording will be sent out afterwards
David W. [email protected]
Vishal [email protected]
Thank YouVisit tradeshift.com/resources
Slides and recording will be sent out afterwards
David W. [email protected]
Vishal [email protected]
