top 5 mistakes companies make when automating ap
DESCRIPTION
The fear of making the wrong move makes some companies hesitate implementing AP automation. If you’re debating a decision to automate, don’t miss this Webinar, Top 5 Mistakes Companies Make When Automating AP (and how to avoid them)! This session will take the guesswork out of implementing AP automation by covering the major steps needed to guarantee success at your organization.TRANSCRIPT
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Top 5 Mistakes Companies Make When Automating AP (and how to avoid them)
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Presenter
Over 20 years experience in designing and implementing Accounts Payable automation solutionsHost of an AP educational Webinar seriesFrequent speaker at various AP tradeshows including PayStream Advisors, IAPP, IFM, and TAPN
Rob DeVincentVice President, Product MarketingCorcentric
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Agenda
Why AutomateTop 5 MistakesSummaryCOR360 Product DemoQ&A
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WHY AUTOMATE AP
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Why Automate AP
Enhance visibility and controls
Increase accuracy
Reduce invoice processing costs
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92% lessBest-in-Class AP teams spendthan industry laggards to process a single invoice
Best-in-Class Laggard
20.8 Days to Process Invoices
3.8 Days to Process Invoices
Aberdeen Group
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TOP 5 MISTAKES COMPANIES MAKE WHEN AUTOMATING AP
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They fail to:Define AP Automation GoalsGain Top Down SupportNarrow Down the FocusEvaluate Solution OptionsAccurate Return on Investment (ROI)
Top 5 Mistakes Companies Make When Automating AP
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MISTAKE 1: DEFINE AP AUTOMATION GOALS
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Map your current payables processes, in and outside of AP
Does each step contribute to the bottom line?
Could touch points be removed or streamlined?
Preparing your AP Department for Automation
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MISTAKE 2:GAIN TOP-DOWN SUPPORT
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Gain Top-Down Support
Source: CFO survey
By the numbers:– 16.5% of CFO’s are unaware that there are AP
automation systems available to help manage accounts payable processes over the Cloud
– 64.1% believe it would be difficult to integrate the technology into their existing systems.
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Gain Top Down Support
Find out what your CFO or management base decisions on (ROI, the business case, compliance, etc.)Define your business case:– Clearly define and document the
problem – Be ready to show how it solves
issues and tasks that distract the AP management from more important and strategic tasks
– Show how peers are achieving success (provide benchmarks, case studies, references, articles, etc.)
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MISTAKE 3: NARROW FOCUS TO PAIN POINTS
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Accounts Payable Innovation Lifecycle
A/P Innovation Lifecycle
Paper CheckEDI
P-Cards
B2B E-Payments
E-Procurement
Electronic Invoicing
Dynamic Discounting
OCR
Front-end Imaging& Workflow
Source: PayStream Advisors
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MISTAKE 4: SOLUTION TYPES AND THEIR DIFFERENCES
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Choose an Automation Provider
Select an AP automation provider by evaluating your requirementsEvaluate SaaS vs In House Narrow to a short list of providers (don’t forget to ask for references!)
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Solution Options
In-house
• Customize your own
• Install software and maintain with internal IT
In-house
• Customize your own
• Install software and maintain with internal IT
Hosted / ASP
• 3rd party provider hosts and maintains your dedicated software
• Reduce IT maintenance
Hosted / ASP
• 3rd party provider hosts and maintains your dedicated software
• Reduce IT maintenance
Hybrid SaaS
• Delivered as a subscription service over the Internet
• Single tenant
• Packaged Solution
Hybrid SaaS
• Delivered as a subscription service over the Internet
• Single tenant
• Packaged Solution
True SaaS
• Delivered as a subscription service over the Internet
• Multi-tenant
• Configurable Solution
True SaaS
• Delivered as a subscription service over the Internet
• Multi-tenant
• Configurable Solution
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Single vs. Multi-tenant
Single Tenant(On-premise)
Multi-Tenant(SaaS)
Code Base
Code Base
Code Base
Database Database Database
Code Base
Database
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MISTAKE 5: ACCURATE RETURN ON INVESTMENT
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Gathering ROI Data
Measure your current processing costs. To measure your ROI, you will need to capture the following:
• Document all touch points in the process• Estimate the average time per step• Estimate the average cost of the time based on the labor
performing the work• Estimate fixed costs such as document storage and retrieval,
destruction, etc.
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It’s Not Just ROIIf your project promises an acceptable ROI, of course it will merit consideration
ROI alone will not net you the win
A CFO will evaluate the project based on key factors including:
• What factors do you base your return stream?
• What is the likelihood your projections are accurate?
Your CFO will want to know how your proposed solution will deliver more invoices worked per processor
“Soft costs” are a factor but will not win you the business case alone
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ROI – Before Automation
Costs $30,000 $3,000 $8,000 $10,000 $25,000 $2,700 $2,800 $7,000 $2,000 $90,500 $842,000 Total All
Other Potential Reductions (Annual Costs)Audit Recovery Fee SavingsCopy / Faxing / Paper / Toner CostsCurrent Imaging / Storage CostsEmployee Hiring & Training
Office SuppliesOvernight Shipping Costs
Telephone ExpenseTotal Additional Costs
Management/Supervisor Involvement Time in Resolving Issues
Real Estate Costs (filing space / floor occupancy)
$7.02 PER INVOICE
FTE's RoleHardware Expense
TotalCost Per Document
Supervisors1 Manager $500 $109,500 2 Supervisor $1,000 $138,000 3 $1,500 $247,500
Processors10 Processors $5,000 $420,000 2 Customer Service $1,000 $84,000 12 $6,000 $504,000 15 Total A/P $7,500 $751,500
$80,000 $28,000 $1,000 $100,000 $35,000 $2,000
Salary Benefits Software Licenses
$300,000 $105,000 $10,000 $60,000 $21,000 $2,000
$180,000 $63,000 $3,000
$540,000 $189,000 $15,000 $360,000 $126,000 $12,000
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ROI – After Automation
$4.44 PER INVOICE
Savings per Invoice: $2.58 $ Annual Savings: $309,500 % Annual Savings: 36.80%Initial Development: $20,000 AssumptionsManager Avg Salary $80,000 Supervisor Avg Salary: $50,000 Processor Avg Salary: $30,000 Benefit Rate: 35%Software Licensing: $1,000 Hardware Expense: $500 # of invoices per year: 120,000Average cost per Invoice $1.20
(Financial Systems /Microsoft, etc)(Computer / Network / Phone, etc)
FTE's Role Salary BenefitsSoftware Licenses
Hardware Expense
TotalCost Per Document
Supervisors1 Manager $80,000 $28,000 $1,000 $500 $109,500 1 Supervisor $50,000 $17,500 $1,000 $500 $69,000 2 $130,000 $45,500 $2,000 $1,000 $178,500
Processors5 Processors $150,000 $52,500 $5,000 $2,500 $210,000 0 Customer Service $ ‐ $ ‐ $ ‐ $ ‐ $ ‐
AP Workflow Automation $ ‐ $ ‐ $ ‐ $ ‐ $144,000 5 $150,000 $52,500 $5,000 $2,500 $354,000 7 Total A/P $280,000 $98,000 $7,000 $3,500 $532,500
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ROI - 5 years
Initial
Year 1 Year 2 Year 3 Year 4 Year 5 TotalZeroTouch Savings: $309,500 $309,500 $309,500 $309,500 $309,500 Initial Development: ($20,000) $0 $0 $0 $0 Net Savings: $289,500 $309,500 $309,500 $309,500 $309,500 $1,527,500
After Initial Development
Current Cost Per Invoice:Cost Per Invoice:Savings Per Invoice:$ Annual Savings:% Annual Savings:Initial Development: ($20,000)
$309,500 36.80%
$4.44 $2.58
Summary Year 1$7.02
AP Automation Solution Includes: ‐ Unlimited User Licensing‐ Complete Document Prep‐ Document Scanning‐ Document Primary Storage and Redundant Storage‐ Data Feeds from Financial Systems‐ Data Feeds to Financial Systems‐ Training and Support‐ Maintenance ‐ System Upgrades
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SUMMARY
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SummaryDefine your AP automation goals and use as your roadmap for successExecutive buy-in is critical to getting your AP project off the ground and to keep it on trackNarrow Focus to Pain Points Not every solution is created equally, be sure to understand the differences before you buyAccurate ROI to get CFO approval
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ABOUT CORCENTRIC
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PO Requisition
Electronic Invoice Network
Invoice OCR Capture & Extraction
Approval Workflow
Invoice Matching
ERP Integration
Payment & Remittance Mgmt
Cloud-based AP automation solutions
Corcentric is a leading provider of financial process automation solutions, specializing in Accounts Payable automation.
Corcentric compliments existing systems, while providing cutting-edge workflow efficiencies
Corcentric helps you transform your AP from a cost center to a strategic asset
About Corcentric
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COR360 PRODUCT DEMO
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PORequisitions
Approval Workflow
Automated Invoice
Matching
StraightThrough
Processing
Dashboard Reporting
Document Archive
Platform
Convert any invoice format into electronic data at the
Invoice Virtualization Center.
AP / ERP System
Send and receive invoices with direct integration through the Corcentric supplier network.
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HOW INVOICES ARE SENT TO CORCENTRIC
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Supplier Transformation
Suppliers
Invoice Virtualization Center
E-invoice
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Invoicing Methods
Scan/Upload
E-invoices
MailE-Mail
Web Form
Fax
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Intelligent Scanning
OCR Extract Data Validation
AP Workflow
Location Scanning
Online Indexing
Virtualization Options
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Approval-based Workflow
Approved Invoice / AP Review
Electronic Interface
ERP / AP System
First Level Approval
Higher Level Approval
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Purchase Order
Three Way Matching
No Human Intervention
Straight Through
Processing
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To see a live demo of COR360, visit corcentric.com or call 703.962.9474