eliminate paper - gfoaa€¦ · • over 700 firms supply goods and services to the city. handling...
TRANSCRIPT
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
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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
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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