REDUCE COSTS

ELIMINATE PAPER

AUTOMATE

Accounts Payable Challenges

Accounts Payable Goals

How A/P Automation Works

Practical Applications

A/P Automation Savings

Tips in Evaluating Providers

A C C O U N T S PAYA B L E A U T O M AT I O N2

Accounts Payable ChallengesAverage Percentage of Finance Function Time Allocations

Source: APQC’s Open Standards Benchmarking Survey, December 2015

3

TransactionProcessing

Control DecisionSupport

ManagementActivities

49%

18% 17% 16%

49%

17% 20%13%

Under $1 billion in revenue $Over 1 billion in revenue

Accounts Payable

Challenges

Business rules not uniformly enforced

Processing delays lead to missed early

payment discounts

Manual approval routing

Approval delays due to

travel and vacations

Duplicate payments

Significant data entry at the line item

level

AP Staff challenged to keep up with

growth

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Accounts Payable Goals

Company’s ERP

System

Purchase Order &

Invoice Receipt

Custom

WorkflowPayment

Goal: Fully Automate Process from Invoice to Payment

Automated Workflows

Workflow engine

Customized business

logic

EmailMailFax

EDIXML

Batch

Paper Invoices

Electronic Invoices

Purchase Order Based Matching

Exception Management

Non-PO based routing approval

hierarchy

ACH

WiresSin

gle

Pay

men

t File

Automated Workflows

Workflow engine

Customized business

logic

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Paper Fax

Electronic Forms

Email

Intelligent Capture

& Indexing

MAIL ROOM SERVICES, INTELLIGENT CAPTURE BUSINESS PROCESS ENGINE WORKFLOW, ERP

& PAYMENT

RECEIVING PAYMENT SERVICESPROCESSING

Nightly Update of Files

PO Line Matching

Business Process Engine

AutomationAP Coding

Auto-Approve

NotificationsApprovalsRouting

WORKFLOWBusiness Community

How A/P Automation Works

PROCESS EXCEPTIONSAP Department

WORKFLOW EXCEPTIONSAP Department

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How A/P Automation WorksKey data elements

1. Vendor Name2. Vendor Number3. Invoice/Account Number4. Amount5. Tax6. Freight7. Gross Amount

Purchase Order Matching1. Valid PO # (Validation file)2. Line Item Detail3. Matching (Quantity, Price, Receipt)

Reference Matching1. Validate data to initiate workflow

a. Nameb. Zip Codec. Division

2. General Ledger Coding by Fielda. Companyb. Department / Cost Centerc. Accountd. Additional Information

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Business Intelligence Reporting

Standard Reports

Custom reports available

Real-time updates

On-demand reports

Exception analysis and

metrics

How A/P Automation Works

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Practical Applications

Pain Points & Goals• The inefficiencies of paper-based processing undercut the agency’s objectives through fines and

penalties owing to late (misplaced or misfiled) invoices. Manual processing also means more labor hours, longer turnaround time, more errors, higher printing costs and greater security risks. Taxpayers expect a commitment to internal financial control.

• Forecasted growth combined with increasing regulatory compliance means that the company must achieve maximum efficiency within a high growth environment while keeping the right balance between staff and technology.

Needs Met• The invoice automation solution enabled the company to maintain its cost base by using existing

staffing resources to support growth without the need to increase its overhead cost.• Real-time on-demand accrual reports provided analysis of all outstanding commitments that enabled

company to closely manage their working capital.• Control over invoice processing enabled company to move its most frequent vendor payments to

electronic payments within three months and earn rebates from payments made with corporate cards.

Sample: County Commission

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Practical Applications

Pain Points & Goals• Over 700 firms supply goods and services to the city. Handling these transactions is estimated to

cost 75% of all administrative work. Manually entering data from paper into financial systems is estimated to account for the time of 4 full time staff.

• There is little visibility into the organization’s overall exposure, poor control and slow processing. Strengthening internal control and enabling better decision making would be a fundamental project aim.

Needs Met• The integrated workflow allows checking the legal conformity of incoming invoices and ensures

compliance with the invoicing practice of invoices at the company. Whether invoices come in as paper documents or electronically, they are captured and logged against transactions in the finance systems.

• Invoice automation solution gave the company complete transparency and control of all invoices and commitment.

• Company gained a fully Sarbanes-Oxley 404 compliant Accounts Payable process.

Sample: City Government

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Practical Applications

Pain Points & Goals• Contract administration process of matching invoices to federal grants was very manual and only 1

person knew how to do it. There were many differences from the standard invoicing process because of the Uniform Grant Guidance rules on allocations and allowability.

• Purchase order approval process was manual and not integrated into invoice processing.

Needs Met• Developed 3 workflows:

• Purchase order request creation, routing and approval to interface into invoice processing

• Invoice capture and indexing, processing invoices against purchase orders, including calculations for blanket POs

• Contract management approval and workflow to handle specific rules and processing against federal grants

• Streamlined processes to allow for separation of duties, backup, resource planning and future integration of other departments / agencies

Sample: Housing Board

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A/P Automation Savings

Metrics Best in Class (20%)

All Others (47%) Notes

Cost to process a single invoice $2.87 $15.38 Fully loaded cost includes sorting the mail, routing invoices to the correct approver, researching accounts for general ledger distribution, identifying duplicate invoices, entering invoice details to ERP system and a myriad of other tasks to process invoices plus document storage.

Time to process a single invoice 3.9 days 17.1 days Measured from the time of invoice receipt to payment generated.

Invoice Exception Rate 11.2% 19.5% Even a small reduction in the invoice exception rate has a substantial impact in productivity.

Total Percentage of Invoices Processed Using Straight-through Processing (STP)

57.1% 16.1% STP refers to "touchless processing" wherein purchase order (PO) based invoices match all of the pre-configured business rules and can be processed without any human intervention and scheduled for payment.

ACCOUNTS PAYABLE (A/P) DEPARTMENT STATISTICS

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Survey Demographics: 184 Accounts Payable, Finance & Procure-to-Pay Professionals. Source: Ardent Partners, ePayables 2016: Eyes on the Prize, published May 2016

A/P Automation Savings

Invoice Automation All Others

Cost per invoice $ 2 . 8 7 $ 1 5 . 3 8

Annual Cost $ 1 8 7 , 6 9 8 $ 1 , 0 0 5 , 8 5 2

Invoice Automation Savings $ 8 1 8 , 1 5 4

Invoices per Month 5,450

Invoices per Year 65,400

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A/P Automation SavingsACCOUNTS PAYABLE (A/P) DEPARTMENT STATISTICS

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Survey Demographics: 30,000 CFO’s, controllers, AP managers and finance professionals who are decision makers with influence over how their AP department operates. Source: iPayables Inc., published July 25, 2016

Per Month Per WeekPer

Business Day

Per Hour Process Type

10,387 2,397 479 60 Electronic

3,821 882 176 22 OCR

906 209 42 5 Manual

• Who determines when and how the invoice will be paid?

C O N T R O L

• If the solution includes a team that will manually key invoices or quality check OCR scanning, where is that team located? Language and culture are larger barriers than you may expect.

L O C A T I O N O F T E A M D O I N G I N D E X I N G

• Is it all-inclusive or do you have extra fees for keystroke logging, removing staples, long term archiving, etc.?

P E R I N V O I C E F E E

• How many users and approvers per seat license?

S E A T L I C E N S E S

• Will suppliers have access to an online portal to interact with you? At what cost?

S U P P L I E R E X P E R I E N C E

• Who owns the images of the invoices and associated documents?

I M A G E O W N E R S H I P

• What is considered configuration vs customization? Fees are quite different.

C U S T O M I Z A T I O N

• What Information Technology controls are in place? How is data safeguarded?

S E C U R I T Y

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Evaluating A/P Automation ProvidersQUESTIONS TO ASK YOURSELF OR THE PROVIDER

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