Discovery Communications implemented a paperless accounts payable system using OpenText imaging and workflow. This improved visibility into the payment process for internal customers and accounts payable. It eliminated paper invoices as 90% now arrive electronically. The new system improved customer service and changed perceptions of accounts payable, which was previously seen as a source of bottlenecks but is now seen as a solution. It also improved month-end close by ensuring invoices are posted faster and reduced processing costs. Credit card rebates increased from $300,000 to over $1 million annually by encouraging card use, providing early payment to vendors.

1. AP Profile: Discovery Communications
Paperless Processing Improves AP Ratings
July 2013
Thanks to popular programs like
MythBusters and How It's Made,
Discovery Communications has earned
a reputation for teaching people to
understand complex processes. And
thanks to procure-to-pay automation,
Discovery's accounts payable
department has built a similar
reputation.
Prior to 2011, internal customers at
Discovery Communications had no
visibility into the AP process. Because
all invoices arrived and were routed
for approval on paper, buyers had no
way to know exactly where an invoice
was at any given time.
Today, paper has essentially vanished
from accounts payable. Ninety percent
of all invoices arrive electronically,
while the company's OpenText
imaging and workflow system tracks
each invoice as it moves electronically
through the organization. This
newfound visibility has improved AP's
customer service and, in turn, AP's
image in the company.
Accounts payable has also improved
its image by earning credit card
rebates that covers a good portion of
the the department's overhead costs.
As a result of these successes, the AP department is no longer viewed as the source of bottlenecks in
the payment process, but as the solution.
Discovery Communications: The Basics
The Discovery Channel first launched in 1985. During the next 25 years, the company grew through
a series of acquisitions (The Learning Channel, FitTV) and new network launches (Animal Planet,
Science, etc.) Discovery Communications today operates 13 separate channels, as well as a series of
Discovery Communications
AP At a Glance
Industry:
Mass Media
Revenue
$8.5 billion
Number of Employees
5,000
Organization: Centralized Shared Services – Silver Spring, MD.
Number of Employees in U.S. AP: 13
Accounts Payable Director: Tammie Norman
Scope:
All U.S. and South America payments, excluding investments
Monthly Volumes
Paper Invoices: 200
Electronic Invoices (includes PDF via email): 7,800
P-card Transactions: 26,000
T&E Reimbursements: 1,500
Monthly Disbursements
Checks: $12.6 million
ACH: $119 million
Wire: $44 million
P-card Spend: $5.6 million
Accounting & Software Systems:
SAP
OpenText
Wells Fargo T&E

2. technology-based educational resources and an educational merchandise
retail business.
Discovery Communications has two accounts payable operations: a
shared services center in Silver Spring, Md. and one in London, England.
The U.S. center processes all payments (including wire transfers) for
Discovery operations in North and South America, representing between
8,000 and 9,000 invoices per month.
More than 50 percent of the dollars paid from Silver Spring go to the
company's 50 top vendors, many of which are television production
companies. These payments routinely fall between $500,000 and $1
million, but make up a small portion of total invoice volume. Other high-
dollar vendors include computer software companies and Discovery's
credit card provider.
ACH is Discovery's preferred payment method. Fifty percent of all payments are made via ACH,
representing 68 percent of dollars spent. Meanwhile, checks make up 38 percent of payments, but
represent just 6 percent of dollars spent.
AP Director Tammie Norman manages a staff of 13 people. She reports directly to the senior vice
president of corporate financial services.
Norman has spent her career managing accounts payable and payroll operations for shared services
centers, and has overseen P2P automation system implementations at several previous employers.
"Usually when I come into a company, I change everything about how we operate," Norman jokes.
When she started working at Discovery Communications in 2010, implementing a new P2P system
was her first order of business.
The Premiere of Purchase Orders
Implementing the OpenText imaging and workflow system was as much about changing culture as it
was changing technology. Prior to the project, not only were paper invoices the common currency,
Discovery did not have a formal purchase order policy. Today, POs are required on all purchases
above $5,000. For buyers in the organization, the change took some getting used to.
"They flipped out when we said we were going to do purchase-to-pay," Norman says. "They'd say 'Oh
my, a PO! That's going to slow things down!'"
The new PO policy did bring with it more controls on the front end. All vendors must be verified
before a PO can be drawn against them, which means performing an IRS TIN match before buying
anything. The AP department also sends new vendor welcome letters to vendors before sending a
PO. The letter states:
 ACH is Discovery Communications' preferred payment method
 All invoices from the vendor must include a PO number
 The vendor should send invoices directly to AP – not the purchaser
Tammie Norman
Accounts Payable Director
Discovery Communication

3. Each department in the company has designated buyers authorized to make purchases. When
making a purchase, buyers create a purchase request in their SAP system. Based on established
allowances for what that person can buy, SAP will either approve it automatically, or route it to a
higher-level manager via the OpenText workflow system. If a buyer is only authorized to make
purchases below $10,000, he would need management approval for a $25,000 purchase. The buyer
finally emails approved POs to the vendor.
While buyers were initially afraid the PO process would take too long, those fears were unfounded.
"It can go through the whole cycle in less than an hour," Norman says. "It's not an overnight
process. We have emails and BlackBerry approval. Your manager will get an electronic notification
that says there is a PO request for X amount, he'll look at the description and click approve."
POs for Productions
While traditional purchase orders work for most goods and services, they do not work as well for
managing television production expenses. The agreements between Discovery and its production
companies establish specific milestones for each project, with Discovery making payment based on
these.
Before automation, production companies would send invoices to Discovery when they reached a
milestone. AP would then route that bill to an approver to ensure that the milestone had actually
been met. Essentially, every production invoice was a treated as a non-PO invoice.
Around the time Discovery was implementing OpenText, the company also rolled out an SAP module
called Project Systems. The module allowed Discovery to track production milestones electronically.
Once a milestone is reached, a member of the Project Systems team confirms it, which automatically
generates an approved invoice entry in the accounts payable system.
This system eliminated the need for production companies to send bills to Discovery, which means
the AP department now keys 200 to 300 fewer invoices each week. And because the invoices are
preapproved, AP no longer has to route them for approval.
"It allows for the checks and balances that are done and that should be done," Norman says. "But
we're not manually checking the delegation of authority because the approvals are all done ahead of
time. It's basically a PO system for milestone payments."
Paperless Invoices
One of the key benefits of implementing imaging and workflow is that AP no longer handles paper.
Discovery Communications receives 90 percent of all invoices via email as PDFs. The other 10
percent are sent to accounts payable's PO Box before being scanned. Paper invoices never leave AP.
"Right next to my office we have a scanning room," Norman says. "If you happen to bring up an
invoice, you put it in the slotted door, we're going to scan it, and it never leaves the room."
Convincing vendors who have typically mailed in paper invoices to start emailing them took little
effort.
"[Vendors] find that once they conform to what we are doing, it's really easy for them to get paid,"
Norman says. "And their information is tracked so much better. The visibility is there now." That
visibility means that AP can now better respond to vendor inquiries.

4. Each invoice passes through a two-person process before it is ready to pay, regardless of whether it
arrived via email or on paper. First, an indexer pulls up the image file on one of their two 30-inch
monitors and keys the information into OpenText. Entering the PO number will automatically fill in
much of the information, including the vendor name and address.
After the invoice has been indexed, it goes to a separate individual for posting. The poster reviews
the indexer's work and verifies that all the tax information on the invoice is correct. When the poster
approves the invoice, it enters the payment queue. This two-step process ensures all invoices have at
least two pairs of eyes on them before approval.
Indexers typically key between 100 and 150 invoices a day, while posters approve between 80 and
100. Discovery's workflow system gives Norman visibility into each processor's workload. At any
given time she can see how many invoices are waiting to be indexed, how many need to be posted,
and how many have been blocked as exceptions.
"We are able to notate everything that happens with a particular invoice," Norman says. "If there is a
problem, I can click on it and see why we sent it to someone and what they need to do with it. [The
process] really is a night and day comparison to what it was."
Closing the Books Better
Thanks to Discovery's paperless initiative, most invoices are posted within one business day. This
ensures invoices are ready to pay before the due date, and has also taken most of the grunt work out
of the month-end close.
Prior to the workflow system's implementation, AP staff would work until 11pm the day before close
in order to make sure all the month's invoices were posted before the cutoff date. Now that invoices
are posted within a day, the late nights have stopped.
"Now our close is a breeze," Norman says. "We cut off usually on the 22nd or 23rd of the month.
Anything that comes in up to that point we guarantee will be posted in time for the close. Although
technically, the way things go now, anything that comes in up to the day before close gets posted. It
works great."
P-Cards Yield Returns
Since 2010, Discovery has steadily grown its credit card programs. Norman established a policy of
encouraging buyers to use cards for all purchases under $5,000. The result is that the company's
annual rebate from its bank increased from $300,000 in 2010 to $800,000 in 2012. Norman expects
it to top $1 million in 2013.
In addition to the 1,500 purchasing cards out in the field, the AP department keeps a corporate card
on-hand to pay invoices. Once accounts payable establishes that a vendor accepts credit cards, then
that becomes the default payment method for the vendor.
Each week, accounts payable runs a report of all outstanding invoices that can be paid by credit card
and pays them, regardless of due date. Vendors often receive payment early this way, which
encourages participation. Meanwhile, Discovery receives 30 days of payment float and helps grow
their annual rebate, which is large enough to cover the AP department's salaries.

5. "You are talking about an overhead group that now will be almost turning a million-dollar profit,"
Norman says.
Changing Perceptions
Going paperless has improved visibility into the AP process, reduced processing costs by eliminating
paper, and even turned AP into a revenue generator. Incidentally, it has also been a successful public
relations move for the accounts payable department.
When Norman took over AP in 2010, she was warned that the department was notorious for losing
invoices. Because everything was paper at the time, she had no way to verify. There was no visibility.
Now that there is, the facts paint a different story. AP's image throughout the organization has
improved since imaging and workflow revealed that most bottlenecks exist outside the department.
"Anyone who has been in AP will tell you that buyers say 'I sent the invoice to AP and they lost it',"
Norman says. "We never lost it. Now I can tell you when you sent it, and when we sent it back to you
because you didn't do something you were supposed to do."
Proving that AP has not been the problem is only part of the solution. Norman has also improved the
AP department's image by focusing training effort on customer service. For example, each member of
the AP staff is cross-trained on other responsibilities. A person may spend one month keying
invoices, the next reviewing utility bills, and the next doing something entirely different.
When each member of the AP team can perform each job, then everything gets done regardless of
who is in the office that day. If a customer contacts AP, everyone knows how to help them find
answers. No one has a chance to pass the buck.
Norman is sure to applaud her team members when they acquire these new skills.
"I encourage the team to recognize that even what may appear to be a small accomplishment is
really a major accomplishment," Norman says, "because it allows us to work better together, get
things done, and be more efficient."