@dougsleeter

The Future of Accounting

Focusing on:

Accounts Payable&

Accounts Receivable

@dougsleeter

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Doug Sleeter

800 Member Accounting Consulting GroupAuthor — Textbooks and Reference Guides Consultant to Software Developers

www.sleeter.comCPA Practice AdvisorColumnist, Top 25 Thought Leader

Accounting TodayTop 100 Most Influential People

Small Business InfluencerChampion

The Sleeter Group

@dougsleeter

Problems? What Problems?

Nothing is Broken in Corporate

AP and AR Processes Today

REALLY!?????

@dougsleeter

The Paper Check Prevails – B2B Payments

Annual Payments Study 2014 Data

Paper Checks

ACH Payments

Online Bill Payments

Online Bill Payments via Non-Bank Providers

Online Wire Payments

Wire Payments in a Branch or Telephone

0 50 100 150 200 250 300 350

Average # of Monthly Non-Payroll Payments

Middle Market $10MM- <$500MM

Small Business $100K- $10MM

Source: Barlow Research

@dougsleeter

The State of AP/AR Today

Other Departments are Getting the

Attention

Because they Generate Revenue

@dougsleeter

The State of AP Today

When AP Departments do Modernize, they focus on payments

However!

Barely half of companies plan to convert to e-payments soon

@dougsleeter

2005 2006 2007 2008 2009 2010 2011 2012 2013 201415%

20%

25%

30%

35%

40%

45%

50%

28%

32% 33%34%

39%

41%45% 45%

48% 48%

19% 21%22% 22% 23%

25%

29%28%

29%33%

37%39% 40%

36%39%

39%41% 40% 40%

44%

Online Bill Payment ACH Wire Transfer Services

% U

se a

t An

y In

stit

utio

nePayment Adoption – Small Business – Slight Increase

Source: Barlow Research - Small Business Trailing 4 Quarter Data

Q: Please indicate which of the following products and services your company currently uses.

Small Business $100K-<$10MM

@dougsleeter

2005 2006 2007 2008 2009 2010 2011 2012 2013 20140%

20%

40%

60%

80%

100%

26%28% 33%

38% 37% 37%43% 43% 43% 41%

62%71%

74% 77% 76% 76% 76% 77% 79% 79%

86% 89% 89% 91% 89% 87%90% 88%

90% 87%

Online Bill Payment ACH

% U

se a

t An

y In

stit

utio

nePayment Adoption – Middle Market – FLAT

Middle Market $10MM-<$500MM

Q: Please indicate which of the following products and services your company currently uses.

Source: Barlow Research - Small Business Trailing 4 Quarter Data

@dougsleeter

Payments – Tip of Iceberg

EPayments alone doesn’t solve for:

1. Process Automation2. Workflow and Collaboration3. Integration with Accounting4. Cash Flow Monitoring/Mgt5. Security for the whole process

@dougsleeter

“If you don’t like the answers you’re getting, change the premise of your question.”

—Tom Selleck as Jesse Stone, in Lost in Paradise

Maybe we’re asking the wrong questions?

@dougsleeter

Top 4 Goals of AP Organizations

1. Automate AP Processes2. Improve Collaboration and

Process Linkage between AP and Procurement

3. Reduce Cost of AP Processes4. Transform AP into a more strategic,

agile business function

Source: Barlow Research

@dougsleeter

SMB AP – A Manual, Messy, Expensive Process

Slow/Messy Time-Consuming/ExpensivePaper-Heavy Manual Complex

ENTER PAY RECONCILEAPPROVE

@dougsleeter

The Old World: Separate Processes – Little Integration

Vendors (A/P)

Paper Invoices

Manual Entry

Some Email, most don’t

No visibility into payment

timing

Payroll

Mostly Paper Checks

Mostly Desktop Solutions

Manual Entry

Error Prone and Costly

Customers (A/R)

Most Pay by Paper Check

Grouping Deposits

Trips to Bank

Security Risks

General Ledger

Manual Entries

Paper Based

Complex Reconciliatio

n

Accounting Software

Mostly Desktop

Manual Data Entry

Reliant on Paper

Fraud Risk

Banks

Online Banking

ACH

No Document

Attachments

Little Integration

@dougsleeter

The Old World: Paper Intensive and Manual

Vendors (A/P)

Paper Invoices

Manual Entry

Some Email, most don’t

No visibility into payment

timing

Payroll

Mostly Paper Checks

Mostly Desktop Solutions

Manual Entry

Error Prone and Costly

Customers (A/R)

Most Pay by Paper Check

Grouping Deposits

Trips to Bank

Security Risks

General Ledger

Manual Entries

Paper Based

Complex Reconciliatio

n

Accounting Software

Mostly Desktop

Manual Data Entry

Reliant on Paper

Fraud Risk

Banks

Online Banking

ACH

No Document

Attachments

Little Integration

@dougsleeter

The Five Trends

• Cloud and Mobile• “Chunkification” of Business Process• Integration of Point Solutions• Zero Data Entry• Collaborative Accounting

Driving New World Solutions

@dougsleeter

Mobile Devices are Ubiquitous

But…Today’s AR and AP

processes do not leverage mobile devices at all

This cannot last long

@dougsleeter

Chunkification of Business Processes

SOLUTIONS

DOCUMENT

BANKING &

MANAGEMENTDASHBOARD

VERTICAL

“Chunkify”and

Integrate

ECOMMERCE

PROJECT MANAGEMENT

PAYROLL

ONLINE INVOICINGAND BILL PAYMENTS

CREDIT CARD FEES

ANALYTICS

CRM

@dougsleeter

Buyer

Customer’s Cloud Solution Converts “Bill” into a Payable Transaction and starts the payment

approval process Human Review of Auto-Entered Data (Account, Dept., and Job Codes)

Human Enters Order into Online Shopping Cart, or into POS, or Phones

the Seller who Enters the Order

Customer Shopsand Places Order

Seller

Accounting Reconciles Transactions(Human Review of Auto-Entered Data)

Seller receives funds electronically in bank, and the Cloud Solution records the receipt in the accounting system

Customer Initiates Payment via Electronic Bill Payment System

Zero Entry

Seller Receives Order

Electronically

Seller’s Cloud Solution Converts Order into Invoice and Sends Electronic “Bill” to Customer. Also sends order to fulfillment

@dougsleeter

Collaborative Accounting

Anytime/Anywhere

Enhanced Security

Less Expensive

Customers

Vendors

Employees

COLLABORATION Accounting Staff

Data Always in Sync (Live)

Simplicity Reduced Client IT

Needs

@dougsleeter

Innovators2.5%

Early Adopters13.5%

Early Majority34%

Late Majority34%

Laggards16%

We’re Stuck

in The Chasm

Technology Adoption CurveCrossing the Chasm of Adoption

But Adoption Comes Slowly

Based on Geoffrey Moore – Crossing the Chasm

@dougsleeter

Only the Paranoid Survive

“Only the Paranoid Survive”

Strategic Inflection Points10x Changes

Disrupt Yourself – Lest Ye Be Disrupted21

@dougsleeter

To provide maximum value at minimum cost to the company?

To serve internal and external customers better, faster, and with less budget.

To embrace modern hardware, software, and cloud solutions.

To focus on improving efficiency by 10x.

What if you could redesign….

…your finance department?

@dougsleeter

AP: Niche Modern(Customer)

Connected via “Trust Network”

Redesigning AR and AP Processes in the New World

Better Collaboration and Visibility

of Status and History

Send notesAsk questions

eInvoice

eInvoice sent becomes eBill (no data entry for AP)

eBill

1

Code & Approve(Multiple approvers & Notifications)

2

ePayment is sent(faster payments,lower costs)

Pay eBill3

ePayment auto-applied to eInvoice(no data entry for AR)

ReceiveePayment

4

AR: Artisan Lamps(Vendor)

@dougsleeter

Sync toAccounting

Automating Back End Accounting

Sync toAccounting

Bi-directional Sync to Accounting

1. Chart of Accounts

2. Customers3. Vendors4. Sales Items5. All

Transactions

Connected via “Trust Network”

AP: Niche Modern(Customer)

AR: Artisan Lamps(Vendor)

Zero

Entry

@dougsleeter

What about the Documents? Paper?

Attach Docs to Bills

E.G. Invoices, Contracts, etc.Attach Docs to

PaymentsE.G. Check images, notifications, etc.

eInvoice eBill

Pay eBillReceiveePayment

AP: Niche Modern(Customer)

AR: Artisan LampsVendor)

Connected via “Trust Network”

Better Collaboration and Visibility

of Status and History

Send notesAsk questions

@dougsleeter

What About Security?

1. Paper = Fraud Risk2. Manual routing of paper - no

Control/Security3. Manual data entry – Errors and

Password sharing4. Online banking – Weak role-based

security5. Audits – cannot see who did

what when

1. Epayments reduce risk of fraud 2. Role-based security3. Instantly grant or deny access4. Document attachments - Instant access5. No check stock in the office6. Clear separation of duties7. Automated business rules strict

enforcement8. Bank-level security for access

Old World New World

@dougsleeter

The Complete Redesign Includes

Trusted 3rd Party “network”

that Solves for All The Pieces

Document and Transaction Management

Approval Workflow

Electronic Money Movement

Notifications

Accounting Integration

Web Access for Complete Visibility to all Parties

Security and Audit Trail

@dougsleeter

Disruption and Agility

If you Don’t Disrupt Yourself

Agility Trumps AbilitySomeone Else Will

@dougsleeter

More from Sleeter Group

www.sleeter.comAccounting Software Consultants – Join us!Blog - Sleeter Report On Accounting Tech FREECertification Programs

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Thank YouDoug Sleeter, Founder – Sleeter Group

@dougsleeterdoug@sleeter.com