Next Practices for Accounts Payable Automation - Basware
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'The Next Practices for Accounts Payable' webinar presentation summarize the next generation of AP Automation processes that you need to be aware of. In this webinar we discuss how collaborative solutions have found their way into enterprise solutions and how they are reducing invoice cycle times and supporting dispute resolution. We will also discuss the social element of an invoice. This webinar will take you from best practices to next practices and give you examples of the hard choices required in order to receive the full benefits that cutting edge automation solutions can provide. You can view the webinar recording: http://www.basware.com/knowledge-center/next-practices-for-accounts-payable-automation
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Next Practices for Accounts Payable Automation - Basware
- 1. NEXT PRACTICES FOR ACCOUNTS PAYABLE WEBINAR Rowan Lemley
- 2. AGENDA • Introduction • Classic invoice handling issues • The Impact of collaborative solutions and mobility • Best practices and next practices • Tough choices for bigger rewards • Questions
- 3. AP Process Technology Value/Benefits Where you are today Where you want to go Basics Opportunity Starting Point GOAL FOR THIS WEBINAR
- 4. History • Founded 1985 • Publicly listed 2000 • Consistently Ranked #1 or #2 by analysts across P2P and e-Invoicing • 14 offices around the world Corporate performance • Net sales >€113.7m in 2012 • 1,400+ employees • Partners in 30+ countries • >1m users in 2,000 customers, >60 countries The Open Network • 1.9m suppliers listed • 0.8m active buyers/ suppliers • >34m e-invoices/POs in 2012 • $254b total annual spend across network • 150+ partners • >50 e-invoice formats BASWARE IN NUMBERS
- 5. Question: What represents the biggest obstacle to AP Automation?
- 6. THE NIGHTMARE OF COMPLEXITY People Businesses Documents
- 8. WHAT DRIVES YOUR PROJECT? Top AP Pressures according to Aberdeen Group 57% 43% 29% 23% 15% 13% Lack invoice and AP document visibility Corporate directive to lower costs Need for better cash management Difficulty in finding/managing paper-based document archives Need to reduce risk of fraud and abuse (improve control) Inability to capitalize on early payment discounts
- 9. Efficiency & Savings COMMON ISSUES IN ACCOUNTS PAYABLE Control & Compliance Visibility & Insight
- 10. CONTROL & COMPLIANCE: CHALLENGES 9 Challenges • Approval policies inconsistent and/or not followed • No records of invoice history, no audit trail, risk of fraud • Overall process compliance with SOX, IFRS… Control & Compliance Goals
- 11. CONTROL & COMPLIANCE: GOALS 10 Challenges • Internal policy execution • Invoice history supports transparency • Avoid double payment or late paying invoices • Re-claim overpay to suppliers • Easy auditability • Satisfy SOXS, IFRS, etc Goals Control & Compliance
- 12. OPPORTUNITY  Master vendor validation  Pre-processing data validation  Invoice pre-booking  User rights determine access  Approval limits govern workflows  Auto approvals within tolerances  Additional Costs handling
- 13. VISIBILITY & INSIGHT: CHALLENGES 12 Challenges • No process visibility • No real-time view on cash flow • No consolidated view on spend data Goals Visibility & Insight
- 14. VISIBILITY & INSIGHT: GOALS 13 Challenges • Shorter cycle time • Process improvements • Faster exception handling • Better use of cash • Dynamic discounts • Consolidate spend Goals Visibility & Insight
- 15. • Early visibility to committed spend enables cost management across P2P process • Improves cash flow forecasting • Enables active working capital management OPPORTUNITY 10 days 20 days PURCHASE TO PAY CYCLE – 65 DAYS 50 days 60 days30 days PO process starts Order confirmation PO done Goods received Invoice arrived Invoice sent Time of payment PURCHASE TO PAY CYCLE 40 days
- 16. EFFICIENCY & SAVINGS: CHALLENGES 15 Challenges • High costs • Paper invoices • Untapped cash discounts • Non-value adding tasks Efficiency & Savings Goals
- 17. EFFICIENCY & SAVINGS: GOALS 16 Challenges • Higher volume of e-Invoices • Faster invoice cycle times • Discount opportunities capitalized upon • Fewer errors • Lower AP costs overall Goals Efficiency & Savings
- 18. OPPORTUNITY Invoices Arrive Payment Catalog Smart Processes 2. Match - Plans 3. Intelligent Workflow 4. Manual Processing 1. Match - Orders Supplier Portal E-invoices Scan & Capture Basware anyERP 250+ ERPs
- 19. CUSTOMER CASE: HEINEKEN 18 Basware database Invoice processing & Transfer to payment anyERP 95% faster Invoice cycle times 40% less AP staff 93%automatically matched 75%automatically matched to exception handling to exception handling 7% 25% SAP SAP SAP SAP Proost
- 20. COLLABORATIVE, SOCI AL AND MOBILE SOLUTIONS
- 21. IMPACTING THE WAY WE DO BUSINESS Examples: Native iPhone/Android App HTML Client Collaborate Auto Email alerts Value: • 24/7 access via smart phones • Reduced bottlenecks • Shorter approval cycle times • Everything is on the record Social, Mobil e, Collaborati ve Confidential20
- 22. What's New in Basware Mobile v1.2 IMPACT OF MOBILITY: EASY TO USE
- 23. What's New in Basware Mobile v1.2 IMPACT: EFFICIENCY VALUE: - Speed up invoice cycle times - Remove bottlenecks - Improve productivity
- 24. What's New in Basware Mobile v1.2 IMPACT: VISIBILTY
- 25. COLLABORATIVE 2
- 26. IMPACT: SOCIAL 1
- 27. IMPACT: IT’S ON THE RECORD
- 29. BEST/NEXT PRACTICES Examples: Electronic invoice processing Invoice Matching e-Invoices Supplier on-boarding Value: • Get off paper = control, visibility, savings • Faster invoice cycle times • Improved matching rates • Improved B2B relationships Lean AP
- 30. E-invoices INTELLIGENT PROCESS Automatically match invoice and PO, or invoice and contract payment schedule. 29 Invoice Recieval Typically AP Could be CC Owner Review invoice to check that invoice is justified and correct. Approve invoice (controlled by approval limits and rules). Transfer invoice data to the ERP or financial system for payment. Supplier Portal Scan & Capture
- 31. MATCHING INVOICES TO PURCHASE ORDERS 30 Invoice matches with approved purchase order (PO) Invoice does not match with PO (discrepancy) Personal Archive Updated Auto-coding/workflow 06/06/2013 Author
- 32. ORDERLESS OR ‘RECURRING’ INVOICE MATCHING 31 Invoices match with approved Payment Plan Invoices do not match with Plan (exceptions) Informative work flow Automation 06/06/2013 Author PLAN CREATION PLAN APPROVAL
- 33. MATCHING BENEFITS Process • Full automation (STP) • Partial automation – Auto-coding – Auto-workflow • Fewer human errors • More time for value adding tasks Control • Enforce Purchase Policy • Audit trail maintained • Line level matching • 3-way matching • Goods Receipt based matching Savings • Automate routine tasks – Invoice to PO association – Coding – Approvals – Workflow • Early payment discount opportunities
- 34. 33 Scanned invoices Share of e-Invoices Time 100 % 0 % With Supplier Activation Organic e-Invoice growth Receiver E-invoices Sender Supplier Portal Sender E-invoices Sender Scan & Capture Sender Supplier Portal Sender E-invoices 100% E-INVOICING DECLINING COSTS PER INVOICE
- 35. • Cut invoice processing time by 5-30 days • Enable discounts on 50% of invoices • Reduce spend by 1.3%-5.5% (average) • Cut collection costs by 10% • Reduce carbon footprint by 90% BENEFITS OF E-INVOICING B2B Transactions Services*Sources: 2012 Global E-Invoicing Study and the Billentis Report: e-Invoicing/e-Billing 2012 www.basware.com/knowledge-center
- 36. TOUGH CHOICES
- 37. TOUGH CHOICES Reality: Bundled Installation Questionnaire Templated delivery Value: • Full interoperability • Easy adoption of functionality • Efficient and effective configuration • Best practices built in • Rapid country roll-outs Streamlined Delivery Confidential36
- 38. PACKAGING BEST PRACTICES 27+ years experience 2000+ P2P customer engagements Best in class P2P processes Basware P2P capability Enterprise Solution INPUT OUTPUT
- 41. RAPID IMPLEMENTATION Package Template Configuration Recipient Resolvers Custom Process Configurations Line-level Matching Custom Business Rules Standard Implementation ERP Template Country Templates
- 42. List your process related issues Define your goals Ensure key people are engaged - Mobil access - Ease of Use - Make it auditable Application of Best Practices Make a smart compromise - Less cost - Faster route to value - Easier to maintain Basics Social Delivery CONCLUSION
Editor's Notes
- Set the stage with a question that hopefully resonates.
- CLICK Every business (large and small) operate in an environment that is becoming more and more complex. The shear volume of business opportunities, document formats and people involved is growing exponentially as the world becomes more and more networked. If your organization is still managing a paper-based process of invoice handling then you will also be forced to do many, many manual tasks. It doesn’t matter so much if your organization is large or small because if you are large and have thousands of suppliers then you will also have the manpower to manage them. Small organizations have fewer suppliers and less resources to manage them. CLICKThe same is true for document formats. Smaller organizations will tend to be more local and as such will encounter fewer document formats whereas a global organization will deal with a world of tax, language and format complexity. Then there are the people involved. Your people, your suppliers – everyone is working in different offices or working from home. If we just look at the process of invoice handling, you begin to understand just how big of a problem this complexity is for everyone and how much more challenging it is if we have a paper-based process. Paper creates challenges …..that need simplifying
- CLICK, CLICK, CLICK Broadly, these challenges can be grouped into these 3 areas for improvement. Globally, these are the big 3 goals which virtually all organizations of any size will consider to be their key challenge areas.
- Let’s shift the conversation from the overall process into your goals and your AP automation project. According to Aberdeen Group, companies around the world are sighting a lack of visibility, insufficient control and a need for cost cutting as the top pressures driving AP improvement projects just like Yours. In fact, these issues have barely changed in the last 10-12 years. Some options are newer – such as the opportunities available from dynamic discounting or early pay rebates but by and large, the broad needs of AP today have stayed the same since around 2001 and the wave of legislation following the Enron crash.
- Our experience has been that these are the big issues. Control & Compliance, Efficiency & Cost Savings and Visibility. Some or all of these will be the reason we are here today. But it’s not enough to simply identify the issues, let’s look at their impact.
- Having adequate controls and ensuring the organization is compliant is a top priority for any finance organization. When approval policies are not enforced because there is no mechanism to enforce it, that is a major failing. When there are no easily accessible records relating to the spend in an organization, when audit trails are poorly tracked or not maintained at all coupled with lax enforcement of approval policy, there is a risk of fraud at worst or gross negligence at best – either way, it spells trouble when the need is to be compliant with legislation such as SOX, IFRS, EuroSOX, etc. and in order to be compliant you need a transparent and auditable process with demonstrable accountability to the individual.
- I probably don’t have to tell you the value of this level of control but the result with basware will be that All invoice are approved according to your internal policies (yes we can use existing approval limit matricies) Individuals see full audit trail of the invoice – right back to the PO. All relevant invoice information can be found at a glance Internal auditors or Controllers can easily audit any business unit, cost center, supplier or individual and thereby reduce risks of fraud and provide oversight and insight into actual spend process transparency and individual accountability are benefits of all Basware solutions
- Enforcing CONTROL & COMPLIANCE in Basware happens both automatically; eg. When invoices are matched automatically to POs or Contracts. And also in a supportive way such as when an AP clerk wants to send an invoice to an individual for approval and the system alerts the Clerk to the individuals insufficient approval limits.CLICK The system will validate master vendor data during invoice receival, we can return invoice to sender if certain data isn’t in place (such as PO number or product codes). CLICK The system can pre-book invoices, CLICK ensures access rights and approval limits are followed both automatically and in manual workflow selections. CLICK Approvals can be automatic within tolerances and CLICKadditional costs can be captured and booked against specific accounts and cost centers.Whether automatic or manual, the system ensures both purchase policy and invoice approval policy is followed.
- Visibility & Insight is the second main challenge facing AP organizations around the world. The inability to find and remove bottlenecks is a constant issue. Zero visibility into cashflow and/or currency exposures is more of an issue for some organizations then others. Consolidation of actual spend against multiple purchasing systems is not typically possible but not in a way that would allow you to use the data pro-actively.
- How should you expect your organization to benefit. Invoice cycle times will be faster – this opens the door for any early payment opportunities You will have opportunities to see and remove bottlenecks along the way, ensuring your process evolves over time With improved visibility, Cash Managers have the opportunity to make more efficient use of the capital on hand, possibly offering or taking early payment discounts or rebates. With Basware Invoice Automation, the invoices are all in one place, despite the fact that you might have 2 or 20 different ERPs around the world. 1 system consolidates all the actual spend and provides a single view into your global suppliers (for example).
- Typically a company has visibility into cash obligations the moment the invoice arrives – realistically, it could be days after the invoice arrives before you know anything about it. With Basware, e-invoices arrive directly into the system and invoices from our Scan and Capture service have a 24 hour turn around before they are in the Basware system.With Basware, visibility extends beyond the invoice however, all the way back to the initial requisitioning or contract creation process. Because all PO data is brought into the Basware database, AP, Treasury, Cash Managers, etc can view forward obligates and take action.
- Efficiency & Savings is always a goal. The high cost of the process in part due to invoices being handled as paper. This in turn ensures cycle times are long and cash discounts are untapped, late payment fees may even be incurred. Too much time is spent on non-value adding task – both in AP and the rest of the organization.
- The benefits of course are many. e-Invoicing providing:Faster invoice cycle timesIncreased automation ratesBetter line-to-line matching opportunitiesCash discounts and avoidance of late payment fees due to faster invoice cycle times add to bottom-line savingsCash rebates due to faster payments can deliver top-line growthAutomatic matching of invoices to orders and contracts ensuresZero human errors‘Orderless’ invoices are automatically processedPosting is accurate according to the PO or contractLower invoice processing related costs overallAP Clerks and Users have more time to spend on value adding tasks
- Matching against e-invoices, Heineken acheives 93% - at line levelAgainst paper invoices (scanned) – 75% Straight-through-processing.95% faster invoice cycle times with 40% less AP staff – all this while connecting to 4 different SAP instances and an in-house built financial system.
- Social, Mobile and Collaborative are 3 driving forces for today’s enterprise solutions and are core to the Alusta offering.Examples such as the native iphone and android apps and the HTML Client for other smart phones provides 24/7 access and works to reduce the opportunities for bottlenecks.Email notifications and new collaboration functionality reduces invoice cycle times and ensures the dialogue is on the record.
- Let’s talk a bit about collaboration. Collaboration around an invoice is essentially business as usual isn’t it? That’s pretty much what happens each time we have an issue with an invoice – we call someone up, ask around and work to resolve the issue. *CLICK*Now, Users (both personal and professional) can initiate a conversation on the topic of the invoice.*CLICK*
- Virtually everyone these days is used to some form of social media – chatting, instant messenger, skype, etc. Collaborate works on the same principle. You have an issue so you start a conversation – you can speak to one person or engage a group of people. *CLICK*
- The best part is that because the conversation is ‘document centric’ the entire conversation is appended to the invoice history – which means it’s on the record.In the past, you would have discussed the invoice via email, or the phone or even via internal memo – Also, users would have rejected or forwarded invoices they were unsure of – now, the issues can be more easily and more quickly clarified – leading to fewer workflow steps, less wasted effort and faster invoice cycle times.
- LEAN: basically, make sure there are no non-value adding tasks in the processA paper-based process is not an intelligent one – it’s too open to error and there is no inherent control or visibilityMatch invoices where possible to POs or Invoice Plans because you can.Shift to e-Invoices because of the cost and efficiency gainsProactively on-board your suppliers – it pays to have closer relationships
- The first shift from paper to an electronic process is the change to an intelligent process. Invoices arrive as paper or e-Invoices and are pushed through the Basware system, first to AP who typically codes the invoice, then to a Reviewer or first approver, possibly the Requisitioner, who checks the invoice’s validity and finally to the second approver who is likely the cost center owner. Following the final approval, the invoice can be transferred to the ERP for payment.CLICK With matching, the electronic workflow becomes an automated process. CLICK Invoices do arrive, the system associates it with an order or contract, copies coding and PO history to the invoice, compares values and if the values are within tolerances, the invoice is made available to be paid. When the invoice doesn’t match, coding and history is still copied over and the system automatically routes the invoice to the correct individual for manual approval.
- Matching invoices to contracts and purchase orders is a best practice. The benefits align with improvements to the process and control and provide additional savings as you would expect from additional automation.Without reading the different bullets, you will agree that by automating the process – within the tight controls made possible through comprehensive business rules – savings and efficiency gains are expected – AND DELIVERED
- CLICK Obviously the goal is to receive 100% of your invoices electronically – well, that’s great but how. With a combination of setting up your largest suppliers to send you e-invoices, connecting your smallest suppliers to the supplier portal, CLICK and pushing the rest of your paper invoices to the scan & capture service. But we can’t stop there – CLICK with supplier activation we can work (with you) to activate the bulk of your suppliers to sending e-invoices.CLICK In this way, we can increase your e-invoice volumes, reduce your paper invoices and ensure you have a declining cost per invoice – and a much smoother process.
- Benefits of sending e-invoicesGet paid fasterKeep customers happyCut admin costs by 40-60%Reduce carbon footprintBenefits of receiving e-invoicesEnable straight-through invoice processingGet rid of manual processesCut admin costs by 90%Benefit from early pay discounts
- One of the most exciting developments of the Alusta platform is centered on delivery. Not only do we want to get your our solutions faster at lower costs, we also want you to have better solutions –in fact, we want you to have the best. That is why we have bundled in all the functionality that we have come to learn supports best practices. Not just capability like e-invoice receiving, we’ve bundled the entire P2P into the same install package – which means full interoperability and easy ramp-up of functionality.We’ve also standardized the methods for configuring your solution which allows us to get your requirements into the solution faster – and in a more manageable, upgradable way.Our method of doing this is via a configuration questionnaire – this is geared towards the solution package and the result is a package specific implementation template. We also will use ERP and Country templates to speed roll-outs.*CLICK*
- So you might ask; how did we come up with the packages and are they more than just marketing – the answer is that we segmented our customer base and looked at what our largest customer groups were buying from us. From this we built up an offering that matched your requirements and in the process, made it easier for use to deliver.
- Let’s first look at the packages. For those who haven’t seen these before, I’ll give you a quick run-through. InvoiceReady supports the smaller organizations and is available only as a cloud offering. The capability is fixed and the pricing is entirely transactional. InvoiceReady is primarily designed to expand Basware’s market coverage to include the SME.InvoicePro and Invoice Automation represent the two most common Basware customer profiles but with some e-Invoicing best practices thrown into the mix. The main difference between the two is that Invoice Automation caters to those organizations who require matching capability. Not all organizations do and in many cases, InvoicePro perfectly supports the requirement for a highly configurable, robust, invoice handling solution.The main takeaway is this: These packages represent three things: 1) bundled best practices as we have come to know them from our experiences over 27 years. 2) a more pragmatic route to delivery. And 3) The bundled offerings offer the lowest total cost of ownership, just as a happy meal at McDonalds is cheaper than buying the drink, fries and burger separately.Lastly I would point out that there is still an Enterprise price list which has each module and functionality listed separately – you pay more but you get to design the solution any way you want.
- If you’ve ever bought a pair of custom made shoes – everything isn’t custom made – you chose the style, the leather and then the sole.After figuring out just which package best represents your needs, the next step is also better organized than ever before. The bulk of the configuration now gets done via a standardized questionnaire. This isn’t necessarily something you could just do on your own, we’ll do it with you but it is a great way to rapidly and consistently generate a package specific configuration file that gives you the opportunity to make plenty of choices that affect your final solution.
- So if we start with a package selection, we then use the questionnaire to provide the configuration – add in an ERP specific tempate plus a country template (which includes things like VAT rules, currency, language, invoice retention legislation, etc.) => we get the standard implementation – and we get it faster and more consistently then ever before. We also have the opportunity to add in some custom process configurations that support such items as additional workflows, line-level matching requirements and customer business rules.As you can see, the implementation and delivery process are vastly different.*CLICK*