ontario local chapter meeting automate invoice-to-payment cycle unlock your working capital

Ontario Local Chapter Meeting

Automate Invoice-to-Payment Cycle

Unlock Your Working Capital

2Agenda

Introduction Overview of VersaPay What Are Your Challenges? The State of A/R Today The 4 Universal P’s of A/R Automation Trends Opportunities and Approaches Carving A Path Forward

Your Speakers

Mislav Majic, Managing Director Solutions

John McLeodVice President Marketing

Source: Crone Consulting LLC – The Next Wave In Payments

VersaPay Overview

VersaPay is a financial technology company that delivers cloud-based payment solutions for businesses

Founded in 2006

Ranked #1 in Profit Top 50 in 2009

IPO on the TSXV January 2010 ; $26.M Mkt. Cap. Today

Two business units: POS Merchant Services & Solutions1. POS is a profitable mature business2. Solutions: cloud-based services to transact electronically

Strategic partnerships TD Bank Heartland Payment Systems MasterCard

5Pain Points

What Are The Pain Points You Are Experiencing? Days Sales Outstanding Too High?

Working Capital Challenges?

Volumes Customer Inquiries?

Matching payments to invoices too time intensive?

Greater Visibility Into Invoices?

PCI Compliance?

The State of A/R Today

Invoices are generated by ERP system

For large customers… Invoice data is delivered electronically via EDI

For smaller customers… Paper or PDF copies are mailed or emailed

The payment process is not visible to the supplier

Follow-up by email or phone

Payment received by check or EFT, wire and credit card

Payments are manually matched and entered into ERP

The State of A/R Today

Many manual steps

Error-prone and cumbersome

Time consuming

In other words…

"we do it the way we have always done it”

A/R Process:

Invoices are mailed, emailed, faxed or online

Follow-up by phone or email

Payments are customer generated

Check, EFT/ACH, wire and credit card

Manual reconciliation

Supplier ERP

System

Customer ERP

System


4 Universal P’s of AR Automation


Presentment

Given the interactive power of the Internet … invoice data no longer needs to be static

Added value for Customers

Builds stickier relationship


Permission

Establishing secure, authenticated access to the invoice information and payment options

Enable preferred payment instruments controlled by Supplier

Funding sources specified, verified and managed by authorized customer


Linking Presentment and Payment:

Cost savings and electronic settlement

AR automation drives value by matching customer payments to invoices

Suppliers will reduce costs of acceptance, dispute resolution, reconciliation and

fees

AR Automation has to support all payment channels


Posting:

Automated reconciliation

Minimizing manual, error prone processes

Reduce/eliminate expensive and error prone Lockbox process

Maximum cash management benefits by accelerating electronic payment acceptance

Why Now?

Trends Laying Groundwork for Change

Navigating Complexity – Finance Groups Streamlining processes will deliver exceptional value

CFO’s increasingly focused on business transformation to build value

Cloud computing can enhance finance function’s performance

Finance more involved in strategic initiatives like customer experience

Accenture Report: Accenture 2014 High Performance Finance Studyhttp://www.accenture.com/us-en/strategy/Pages/index.aspx

Why Now?

1 2012 Remittance Survey of 662 AR, treasury, AP, purchasing, procurement, and accounting professionals (n=662). 2 Suppliers’ Acceptance of Card Payments. First Annapolis Consulting. August 2013.

of business respondents have moderate to high interest in using more electronic payments.1

include card-related terms in contracts — more than 2X the number just 4 years ago.2

of businesses include card-related terms in RFQs.243%

50%

92%


Primary Cost Reduction Opportunities


Outbound and inbound processing

Outbound and inbound float

Automating customer care

Payment mix management



Outbound processing

Invoice & statement production

Sorting/preparing/mailing/postage

Omni presentment requirements

Storage and accessibility



Inbound processing

Receive & retrieve lockbox

Envelope extraction Sort by payment type

(full, multi, partial) Process Exceptions Balance Batch Post to A/R

CPU A/R Update Reporting Clearing Costs Bank Fees Processor Fees Payment Processing Other


Realize A/R Process Efficiencies

Redirect A/R staff to Higher Value Work

Accounts Receivable PerformanceDoing Ok is no longer good enough www.apqc.org

Automation supports greaterproductivity

Greatest Benefits of eInvoicing

PayStream Advisors: 2014 Invoice & Workflow Automation Report http://www.paystreamadvisors.com/


Outbound float

Mailing float and customer aging of receivable 5-40 day

Monthly batch processing for account update 1-5 days

Statement rendering & printing 1-5 days

Folding insertions, stuffing, metering, sorting 1-5 days



Inbound float

Mailing float 1-5 days

Extraction, preparation & remittance processing

float 1-3 days

Clearing float for deposited checks 1-5 days


Problems Leading to Late Payments

PayStream Advisors: 2014 Invoice & Workflow Automation Report http://www.paystreamadvisors.com/


Automating customer care

10% to 40% of business invoices disputed

Disputes slow down payments, increasing DSO

On-line disputes est. to be 50% less expensive

Collaboration ensures prompt dispute resolution/pay

Automated payment acceptance is simpler, faster


Improve Customer Interactions

Errors Corrected Faster

Accounts Receivable PerformanceDoing Ok is no longer good enough www.apqc.org

A/R Teams Redirect Efforts

Reduce DSO

Improve Working Capital


Payment management mix

Online payments versus offline Currently costs $0.75 to process each “inbound”

remittance This included processing for cheques, customer initiated

EFT/ACH, wires and credit cards Bank fees can be quite costly

Auto pay is the lowest cost of acceptance

Intelligent credit card acceptance can be second lowest form of acceptance


Value Proposition Supplier Buyer

Payment process improvement Automates payments/reduced collection efforts

Eliminates cheques/postage costs/processing errors

Cash Flow improvement Reduces DSO and improves working capital

Potentially increases DPO/Float/Control

Improved customer/supplier relationship

Buyer payment of choice/preferred supplier

Suppliers paid quicker/reduced collection costs

Reduced risks Can lower bad debt ratiosOnline reporting with full audit trail

Positive impact to balance sheet Less reliance on other credit facilities (loans, margins)

Provides additional financial flexibility

Source: Visa

Intelligent credit card acceptance


Unlocking Working Capital

Unlocking Working Capital

Reduced float time = access your capital sooner

Optimize customer care = access your capital sooner

Reduce time to resolution = access your capital sooner

Make it easy to pay = access your capital sooner

Reduced bad debt = access your capital sooner

Reduced payment processing costs = access your

capital sooner

SUPPLIERS BUYERS

Collaborative platform for B2B ecommerce

Easy integration Accelerates payments Eliminates manual effort Reduces cost

Improves Customer Experience Easy to use Eliminates paper and manual

processing Choice of secure payment options Provides complete audit trail

Versapay ARC


Demo

Let’s move A/R forward

Delivering an end-to-end STP process for A/R is more feasible today than ever before

The problem may not be pressing, but the payback is compelling

There is customer demand for it

Leverage cloud-based tools and payment provider capabilities to get results quickly

VersaPay ARC can help


Questions?

Future Session Topics?

What other AR topics are you interested in? Download this presentation at

www.versapay.com/ifo


Thank You Mislav Majic [email protected]

ontario local chapter meeting automate invoice-to-payment cycle unlock your working capital

Documents

erp slide

ar process

authorized customer

payment process

fees ar automation

customer erp system

phone payment

working capital slide