e-Invoicing - Going to the Next Level


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Presentation by Taulia Chief Product Officer at the Institute of Financial Operations Canadian Symposium

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  • Key Insights • eInvoice adoption showed modest growth• Demand for control and visibility appears to continue to be the main driver for adoption Electronic Invoice Adoption Shows Mild Growth In each of the survey areas that relate to the adoption of eInvoicing, the results showed a 1 percent increase over last year. (See Figure 3). Participants that donot use an eInvoicing solution and have no plans to implement one decreased from 32 percent to 29 percent. In addition, a moderate 29 percent of survey respondents reported they are currently utilizing or deploying an eInvoicing solution within the next six months, and 42 percent are currently evaluating the usage of a solution. The Evolving Benefits of Electronic Invoicing The number of respondents indicating that “improved visibility of transactions was the key benefit of electronic invoicing,” dropped from 47 percent to 38 percent.(See Figure 4). Several other benefit areas also decreased, including “fewer lost invoices,” decreased 12 percent, “reduction in exceptions” decreased 15 percent and “improved vendor relations” decreased 3 percent, when compared to last year. Notable increases in realized benefits included a reduction in Full Time Equivalent (FTE) costs (up 6 percent,) increased on-time payments (up 7 percent) and quicker approval times (up 4 percent.)
  • Paper Continues To Dominate The methods for receiving or sending invoices are still heavily dominated by paper, despite the inherent challenges that a paper-based process creates. Not onlydoes paper increase the need for manual processing, but it is also the enemy of productivity. With many organizations implementing “green” initiatives, the factthat paper accounts for 64 percent, down from 68 percent in 2010, of all methodsof invoice exchange is a strong indicator that organizations are entrenched in their current workflow process and may be unable or unwilling to rely on electronic means.
  • Key Insights Perception that current processes work is the key barrier to the adoption of eInvoicingA continued reliance of paper creates a substantial barrier Senior leadership is critical for an organization’s advancement in eInvoicingsolutions The three main barriers to eInvoicing, as indicated by the survey are: (1) the current processes work, (2) a lack of budget, and (3) a lack of confidence in the return on investment. (See Figure 5). While a lack of executive sponsorship was listed as a barrier in only 6 percent of responding organizations, compared to 21 percent in last year’s report, PayStream Advisors believes that executive sponsorship is critical for an organization to take the first steps towards investigating an eInvoicing solution and to removing any internal adoption barriers. Only 6 percent of survey respondents indicated that the “lack of understanding of current available solutions” was a barrier to the adoption of eInvoicing, down from 12 percent in 2011. This proves that solution providers are being effective in increasing awareness and educating their customer base and prospects on the many benefits of eInvoicing. Respondents indicating a “lack of budget” as a barrier dropped from 27 percent to 18 percent this year, which suggests that companies are beginning to recognize the cost-reducing benefits of a streamlined and automated invoice process.
  • Scope limited to invoices submitted through network
  • Growing 28.6% annually:http://www.eurofactor.com/cms/Factoring_Market_2010.htmlExceeds $2.3 trillion: http://www.spendmatters.com/index.cfm/2012/5/29/Taulia-Putting-Discounting-First-to-Slip-Under-the-eInvoicing-and-SCF-Radar-Part-415% APR: http://money.msn.com/saving-money-tips/post.aspx?post=94045349-1c9c-4e6d-8f93-9a14827cb775
  • e-Invoicing - Going to the Next Level

    1. 1. e-InvoicingGoing to the Next LevelMarkus AmentChief Product Officer@maex242@taulia
    2. 2. Agenda• e-Invoicing - What Works and What Doesn’t• Supplier Value Propositions• Dynamic Discounting & Turning Issue Into Opportunities• Real World Success Stories• Questions
    3. 3. A simple chain The ultimate goal: Get rid of paper, manual keying, exceptions and calls How to get there: Receive e-invoices in a virtually perfect quality How to achieve it: Supplier adoption What drives adoption: Value for supplier
    4. 4. What is E-Invoicing? Completely Sending and Eliminating Paper Receiving Invoices Electronically E-Invoicing Data Stays Data: No Data Entry or Correction What e-Invoicing is Not: o Scanned/imaged paper invoices o OCR’ed paper invoices o Emailed PDFs
    5. 5. Adoption of E-Invoicing in the Last Year 42% 29% 21% 8% In Use Deploying Evaluating Not Planned Source: PayStream Advisors, 2012
    6. 6. Paper Remains Dominant 64%Methods Used to Trade B2B Invoices 13% 14% 9% Fax Email E-Invoicing Paper Source: PayStream Advisors, 2012
    7. 7. The e-Invoicing Challenge:Replacing PaperCustomers: o ERP Input formats are proprietary o Cost and complexity of working with hundreds of suppliersSuppliers: o Cost and complexity of customizing for clients o Billing systems output invoices in proprietary formats
    8. 8. E-Invoicing Adoption Barriers Current processes work 23% Lack of budget 18% We do not think there will be an 16% ROI Lack of resources to manage 7% automation Lack of understanding of current 6% available solutions No executive sponsorship 6% Source: PayStream Advisors, 2012
    9. 9. Supplier Value Propositions 1. Complete Solution Offering 2. Covers all Transaction Types 3. Interoperability 4. Transparent Vendor Portal 5. No Supplier Fees 6. Financial Value
    10. 10. Supplier Value Proposition 1:Complete Solution Offering Current New o Focus on e-invoicing o e-invoicing, incl. flipping a PO – Connectivity often one-way o Invoice status street: “Incoming” only o Remittance/payment details – No additional data on the o PO updates, confirmation & history portal or network o Address changes, bank changes o Online Dispute resolution o Online W9/1099 o ….
    11. 11. Supplier Value Proposition 2:Covers All Transaction Types Current: New: Scope limited to invoices Comprehensive visibility for submitted through network all invoices Network Network or or PAPER Platform Platform EDI • Status? • Status! • PO? • PO! • Payment Details? ER • Payment Details! S • History! ERP ERP
    12. 12. Supplier Value Proposition 3:Interoperability Current: Supplier accesses each New: One access point platform used by its customers Network Network or or Network API Platform Network Platform or or Platform Platform
    13. 13. Supplier Value Proposition 4:Transparent Vendor Portal• Instant visibility into invoice status• Payment certainty and details• Easier and faster access to cash• Online collaboration with your customers means no more calls into AP
    14. 14. Supplier Value Proposition 5:No Fees• Simply put – suppliers will not use a platform that charges a fee• More and more providers offer electronic invoicing free of charge to suppliers
    15. 15. Supplier Value Proposition 6:Financial Value Top Two Supplier Pain Points 1. When will you pay me? 2. Can you pay me earlier?
    16. 16. Supplier Value Proposition 6: Easier Cash for your suppliers• Factoring market is growing 28.6% annually and exceeds $2.3 trillion• Credit Card: 15% industry average APR• Banks are reluctant to lend to SMBs, and often for steep rates• Small business loans are effective for large capital expenditures but are generally not appropriate for day to day operational expenses
    17. 17. Greater Supplier Value =Greater Supplier Adoption 4. 3. Transparent Interoperability Vendor Portal 2. Covers all 5. Transaction No Supplier Fees Types 1. Complete Supplier 6. Solution Adoption Financial Value Offering
    18. 18. There Remains Another Problem…Banks Benefit – Not Buyers or Suppliers LARGE BUYER SUPPLIER Invoice Approved on Day 5 Invoice-Net 60 Invoices Buyer BANKBuyer earns 0.5% Suppliers Factorsannual interest until at 20% APRdue date
    19. 19. Status Quo is Ineffective Cash as % of Assets Buyers Have Record Amounts of Cash 2002 2006 2012 6% 8% >10% 4-Week Interest Rates 2002 2006 2012 1.7% 5% 0.1% Days Until Approved Payment 2002 2006 2012 20 days 30 Days 45 Days
    20. 20. The Solution: Dynamic Discounting• What is it: expanding beyond the typical 2% net 10 discount terms to capture more discounts• The Benefit: greater returns on cash and increased supplier adoption of granting discounts
    21. 21. Dynamic Invoice Discounting Represents a Win-Win• Enables large companies (“Buyers”) to save money and improve return on cash by paying suppliers early• Enables smaller companies (“Suppliers”) to access less expensive financing alternatives by accepting time-variable “Dynamic Discounts” Imagine…paying your suppliers less and having them thank you
    22. 22. Turning Issue to Opportunity Suppliers are willing to offer attractive discounts for early payment - Integrity and Reliability ensured Terms (days): PaymentInvoice Approval Opportunity 120 Anheuser-Busch (due date) 60 Hertz 56 Industry Average 0 15 60 days 45 Apple
    23. 23. Will Buyers Generate Acceptable ROI? $31.4m “This Solution has saved us moreDynamic Discounting Solution Deployed ➘ money quicker than anticipated” $10m - Ben Shaffer, PG&E $5.8m $3.9m Economics for PG&E: Break-even: 6 weeks after go-live ROI: >2000% in first 12 months
    24. 24. Will Suppliers Actually Enroll? 110% Results: • Go-live 3.5 months after contract 88% signature: • 45% of previous networked suppliers 66% converted within 1 week • 99% converted within 5 weeks 44% • Now enrolling non-previous networked suppliers: 30% of invited enrolled within 1 ½ 22% weeks • $5M in discounts/Billion in spend 0% • 7 Employees in AP department Go-Live Week 1 Week 3 Week 5 Week 7 Taulia Previous solution
    25. 25. Is the Process Timely?“Since go-live 3 months ago we’ve saved $140K – that’s more than$500K in annual savings – and that’s just the tip of the iceberg. Weexpect to achieve annual savings of $1.5 – 2 million. For a programwith minimal up-front investment that’s given us a very rapid returnon our investment.”And furthermore, “we’ve been surprised how enthusiastic oursuppliers have been.” - Robert Locke, Director of Strategic Sourcing and Supplier Diversity
    26. 26. Our Vision of Tomorrow for Youas a Buyer Free E- invoicing and Free for your Suppliers and free for you Visibility Portal Increased profits From Dynamic Discounting Start electronic Onboarding Guarantee immediately Great supplier Much better Supplier Value relationships at no cost = win-win
    27. 27. Questions?Markus AmentChief Product Officer@maex242@Taulia