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Infographic: Financial vs. Operational Savings: True Scale in AP Improvement


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Findings from the Blue Hill Research Accounts Payable Financial vs. Operational Savings Report. Download the full report here:

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Infographic: Financial vs. Operational Savings: True Scale in AP Improvement

  1. 1. FINANCIAL OPERATIONAL SAVINGS: True Scale in AP Improvement FINANCIAL OPERATIONAL SAVINGS: True Scale in AP Improvement vs. SHARE THIS INFOGRAPHIC Translating Technology to Success Learn more at For more infomation, please click here. ABOUT US Blue Hill Research documents how technology supports business success. Our success-based methodology is based on the three pillars of success: technological, financial, and line of business. Our clients use this information to choose technologies, target high value use cases, and identify technology champions who truly make a difference for their organizations. Unless otherwise noted, the contents of this publication are copyrighted by Blue Hill Research and may not be hosted, archived, transmitted or reproduced, in any form or by any means without prior permission from Blue Hill Research. $45,825/FTE1 +1 +1 +1 +1+1 +1 +1 +1 * FTE: Full-time equivalent* Dynamic discounting savings from addressable spend 1 This figure comes from the Robert Half 2014 Salary Guide for financial positions, with a 30% upward adjustment to account for non-salary employment benefits. 0.1~0.2% rate FINANCIAL SAVINGS OPERATIONAL SAVINGS Pay approved invoices early in exchange for a discount Reduce headcount and automate processes HOW TO SAVE $1,000,000 !!! -$1M ALREADY PAID! LET’S COMPARE Offer early payments on a billion dollars in spend Reduce 20 FTEs Even with the most conservative 0.1% rate, each $50 million of addressable spend can drive the same savings as eliminating one FTE, and each $1 billion of addressable spend can save a million dollars. AFTER 12 YEARS LET’S TALK SUPPLIER PARTICIPATION 5 10 15 20 25 30 35 40 0.1 0.2 0.3 0.4 0.5 Energy Client A discount rate of 0.5% was captured with 40% of invoices offered for early payment accelerated. Packaging Client A discount rate of 0.19% was captured with 9% of invoices offered for early payment accelerated. A B Discount Rate (%) Rate of Supplier Accepting Accelerated Payments (%) Clerical FTEs 2002 2014 24 5 2002-2014 ESTIMATION CUMULATIVE LABOR SAVINGS $5,819,775 CUMULATIVE DISCOUNT SAVINGS $184,000,000 CASE STUDY SAVING TYPES Through properly educating suppliers on the benefits of the self-service and early payment portal, and ensuring all services are free, these Taulia clients have ensured that the majority of their suppliers enroll, and actively engage in the tool. Increasing the number of suppliers who accept accelerated payment helps boost overall discount capture rates. 121 2,289 Invoice /FTE /Day 1 42 Discount Savings (Million) $$ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ Let’s take a look at the improvements a large US utility achieved after implementing an electronic invoice and dynamic discounting solution. Looking at 2014 alone, the company would need to reduce their headcount by 917 FTEs in order to equal the amount of money gained through discount savings — 37 times the number of staff they started with in 2002. $( = 1 staff, = 121 invoices, =1 million ) Spoiler Alert They’ve saved over $180 million in discount capture. REPORT HIGHLIGHT RESIST THE URGE TO FOCUS ON LABOR REDUCTION FRAME DISCOUNTS IN TERMS OF INCOME For organizations looking to maximize the value of invoice processing, Blue Hill recommends that you Revenue Discount Income 95% 81% 68% 58% 94% 90% Healthcare Food & Beverage Energy Textile Manufacturing Energy Food & Beverage Portal Enrollment Rates Discount Capture Rates MOVE TO ELECTRONIC INVOICING INVOICE APPROVED APPROVED APPROVED APPROVED