mnccc 2016- account payable trends for local government

2016: Account Payable Trends for Local Government

2

The AP trends of 2016

trend #1Cloud

momentum

trend #2Reporting

visibility

trend #4Mobile

processing

trend #5E-invoicing penetration

trend #6Outsourced payments

trend #3Centralized Invoice

Receipt

Cloud

4

of all organizations are planning to move to a cloud-based accounts

payable system in the next two years.

Cloud is growing

Source: IFO 2015

Cloud penetration is close to

100% 24%

5

Development is stable

Cus

tom

ers

You need to stay ahead of the complexity curve

Orders

Invoice complexity

SaaS

On Premises

6

Myths vs Reality

Unstable Myth Stable RealityA passing trend

Limited functionsFocused on SMBs

Low reliability IT unfriendly

Growing at 40% per yearEasily customizableScalable to any size

Fewer disruptions than in-houseReduces tactical maintenance

vs

7

Cloud simplicity

5 Quicker ramp up time

4 Lower cost per invoice

3 No software or hardware

2 Minimal IT involvement

1 Little or no capital investment

Source: IFO 2015

Visibility

9

AP departments put visibility surprisingly high in their list of priorities:

A major challenge?

Lack of visibility into invoices and payables information

45%

Difficulty handling, managing and finding invoices

42%

Costs to process invoices are too high

38%

Maximizing vendor discounts

17%

Source: IOFM 2014 Controller’s Report

10

challenge #1Key information

not captured

challenge #4Badly integrated

systems

challenge #2Poorly organized

data

Because there’s an information hole

challenge #5No access for

decision makers

challenge #3Information not timely

11

Source: Ardent Partners 2015

Identified or negotiated savings

Enterprise goals and objectives

% of spend under management

Booked savings

Enterprise spend

59%

56%

55%

50%

50%

"Strong Visibility"

The need for better visibility into spend

12

Faster turnaround

Better process transparency

Better auditing

Staff reductions

Fewer invoices "lost in the loop"

Enhanced supplier relationships

More early-payment discounts

Fewer payment errors

Fewer disputes

Ability to outsource

0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Source: AIIM

Biggest benefits from AP automation

Centralized Invoice Receipt

14

Centralized invoice receipt

Fax

e-invoices

e-mailMail

ap@co.xxxxx.mn.usCentralized Mail Box

Primary Contact

PotentialBottleneck

Benefits:

- Understand Outstanding Liabilities- Accurately Diagnosis Issues- Identify Process Weakness

Mobile

16

Deployment is becoming standard

Source: IFO 2015

of all organizations are planning to deploy mobile capture and approval of invoices in next two years.

28%

17

Introducing mobile

Align with key workplace trends

Speed uppayments

Support BYOD policies

Increaseaccuracy

E-invoicing

19

E-invoice transmission

X

20

Implement in 12 Months

16% 13%

29%

Currently Using

49%

21% 22%

Move to e-invoicing

Invoice Receipt Management Report 2015: PayStream Advisors Report

Front-End ImagingOCR/Automated Data CaptureE-Invoicing Capability/Network

21

The opportunity is hugeCurrent situation

of organizations report no more than

55%

of invoices achieving true straight-through status

5%

Desired situation

of organizations report more than

5%

of invoices achieving true straight-through status.

75%

22

Most organizations believe AP is the most manual F&A functionYet…

And organizations are ready to act

Most organizations believe AP is the F&A function best suited for automation

23

Six supplier focused strategies

Target All SuppliersAvoid focus entirely on big

suppliers. The idea they provide most invoices is losing face.

Supplier Focused SolutionGet diverse sending options

and supplier-focused features at no cost

Automate at Consistent PaceUnderstand some suppliers need to evolve to e-invoicing

over time

Invoice Receipt Method Diversity

Allow suppliers to choose different invoice methods as

on-ramp to automation.

Find B2B Network with Supplier Value

Look for self-service functions and information

transmit options.

Implement Additional Invoice ManagementReceiving e-invoices is

step one: think matching, approval, payments etc.

Invoice Receipt Management Report 2015: PayStream Advisors Report

24

Types of supplier network models

MODEL SUPPLIER RESISTENCE LEVEL

SUPPLIER % OF SPEND MODEL• Buyer pays implementation fee• Supplier pays a % of spend• Buyer pays a per invoice fee

HIGH

SUPPLIER FLAT FEE MODEL• Buyer pays implementation fee• Supplier pays flat monthly fee• Buyer pays a per invoice fee

MODERATE

SUPPLIER FREE MODEL• Buyers pays NO implementation fee• Supplier pays nothing• Buyer pays a per invoice fee

LOW

25

Paper to Electronic

50

50

100%

0%

50%

25%

75%

1 Year 2 Year

E-invoicing

Paper Conversion

10

90

30

70

E-invoicing

Paper Conversion

Payments

27

General Business Advantage

Leverage Rebates

Card = 13,000 annual payments (26%)

Payment Composition

Check

Card

ACH

CheckCard

ACH

Drive down costs

x 1.3% AP card rebates_______________________

$19.5m @ $1 ,500/payment

$253,500 Annual rebate

28

Outsourced payment processing

2016 will see:PaymentOutsourcing supplier payment will lead to:

Lower payment costs

Extra working capital finance at lower rates

Reduced risk from volatile supply chain activities

Increased access to supplier discounts

Easier administration and reporting

Extra working capital flowing through system

Tighter bonds between business partners

Summary

30

The AP trends of 2016

trend #1Cloud

momentum

trend #2Reporting

visibility

trend #4Mobile

processing

trend #5E-invoicing penetration

trend #6Outsourced payments

trend #3Centralized Invoice

Receipt

About Corcentric

Eric Kallies(856) 406-3469ekallies@corcentric.com

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