respond to intensifying financial risk
TRANSCRIPT
Respond to Intensifying Financial Risk and Achieve Tangible Net Savings:
A Holistic PeopleSoft Suppler Source to Treasury Cash Management System
Presented by Mayda Barsumyan, President of Business Escalation
Mayda Barsumyan, President
Business Escalation, Inc. is a leading Source to Cash Oracle Platinum Partner with a team of seasoned finance and management professionals offering cash management products and services. Government agencies, companies in the public and private sectors, not-for-profit groups, and Fortune companies look to Business Escalation for software centralization and treasury consultation. Business Escalation, Delivering Enhanced Profitability
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
What you’ll learn today…
• Best practices to achieve tangible net savings
• How companies in the fields of healthcare, energy, manufacturing and higher education achieved their finance department goals
• What is Supplier Source to Treasury Cash?
• Settlement automation
• Tips and tricks
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Did you know?
• Base on industry norms, less than 50 percent of IT projects finish on time and on budget.
• Queensland Department of Health payroll project ended in a debacle that cost $1.2 billion.
• In the U.S., the Expeditionary Combat Support System, an enterprise resource planning software project, was canceled after the U.S. Air Force spent $1 billion on its development.
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Why did these projects fail?
• Fuzzy goals
• Overly optimistic
• Little comprehension of project complexity
• Weak ownership
• Lack of understanding of the corporate culture
• Lack of overall understanding of integration between departments
and relational data
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Treasury Challenges
CFOs/Treasurers in public and private sector companies serve as financial risk managers. • Liquidity Risk • Credit Risk • Currency Risk • Interest Rate Risk • Operational Risk CFOs/Treasurers are increasingly assuming a more strategic role.
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
What is the value of PeopleSoft Supplier Source to Treasury Cash?
Provides tools that allow CFOs/Treasurers to make informed decisions and mitigate risk • Streamline banking • Reduce cost of bank-related fees via bank account optimization • Implement a single source to cash management system • Implement a single source banking communication channel • Exceed expectations on eliminating unproductive manual efforts • Improve cash management structure and account pooling • Increase in trade finance
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Industry Case Study
Healthcare Staff of 13 Top 20 supplier invoices: 45% Top 50 supplier invoices: 60% Non-PO invoices: 25% Invoices processed (December ‘14): 1,112,525 Measurement: cycle time
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Goals: Meet cycle time Eliminate paper Reduce non-PO invoices Predicable cash flow
Industry Case Study
Energy Staff of 9 Top 20 supplier invoices: 70-80% Number of invoicing suppliers: > 2,000 Non-PO Invoices: 25% Invoices processed (December ‘14): 554,575 Measurement: Invoices processed by FTE
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Goals: Eliminate paper Realize early payment discounts Electronic payments
Industry Case Study
Higher Education Staff of 60 (many low pay, high turnover) $300K deficit Total Invoices: 450,000 T&E: 90,000 Measurement: Timely invoice payments
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Goals: Implement eSettlement Realize early payment discounts More virtual card payment Increase operational cash
Industry Case Study
Manufacturing 180 centers ~ 180 individuals Decentralized review of invoices Invoices processed (December ‘14): 122,917 20 of 180 centers live with invoicing Measurement: Cycle time
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Goals: Streamline review process through decentralization Increase end user visibility Reduce errors and payment issues Manage operational short-term cash Predict daily operational cash needs
Sample Source to Cash system
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Deposit Check/ACH
Organization
Banking Institution
Banking Institution
Suppliers
Online Banking
Supplier Source to Treasury Cash – Best Practices
Practice smart supplier sourcing
Broaden supplier self-service
Establish a centralized VMO Best-in-class organizations implement a portfolio approach, leveraging the advantages of multiple tools: • Electronic invoicing with workflow • Purchasing card solutions • Electronic payment platforms
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Supplier Source to Treasury Cash – Best Practices
Electronic invoicing presents the best option for addressing the majority of invoice types, supplier capabilities, and best complements electronic payment approaches
Maximize relationship with financial institutions
Define AP / Procurement Role v/s Treasury
Minimize operational risk
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Settlement Automation – Industry Perspectives
Accounts Payable is a largely forgotten process at most organizations, yet represents sizable untapped opportunities
Having a settlement strategy is increasingly required to optimize and complement strategic sourcing
Reducing transactional costs alone typically justifies automation projects:
• $34 per invoice $12.50 per invoice (>60% improvement) • Labor reduction of 25-40% • Cycle time decreases of 65%
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Settlement Automation – Industry Perspectives
Other benefits include significant increases in: • Timely payment rate • Payments earning discounts • Cash flow management • Control and risk mitigation • Capture and reporting of negotiated procurement savings “Automation” is the #1 interest area for AP managers, yet fewer than 25% of organizations have any significant settlement automation in place
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Projected savings from payment solutions
At full deployment of PeopleSoft • On average savings at full deployment = $1.75 million to $2.95
million • On average additional profits of $1.46 million To consider • Maximum rebate enhancer • Dynamic discounting
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Tips & Tricks – A Holistic Approach
• Chart the treasurer’s vision and clearly define business processes to carry this vision
• Review existing configuration • Ensure that system configuration is molded to support future
business processes • Think outside of the box • Explore creative configuration techniques • Maximize the rules-based functionality to achieve the processing
you need • Understand your integration points with other modules
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Thanks for your time!
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Questions??
7733 Forsyth Boulevard, Suite 1100 Clayton, MO 63105
Locations & Contact
Contact Information Phone: (888) 594-9919 eFax: (877) 278-2530 E-mail: [email protected] Web: BusinessEscalation.com
Locations Missouri Clayton, MO (Headquarters) 7733 Forsyth Boulevard Suite 1100 Clayton, 63105
Florida 801 Brickell Center 801 Brickell Avenue, Suite 900 Miami, FL, 33131