Protect your companies' brand, add strategic value to AP, and assure your senior management that your vendor information is complete, accurate and compliant. Mary Schaeffer from AP Now and Joe Flynn Founder of Lavante present how to: * Improve Vendors relationships by enabling effective communication * Define AP procedures for gathering credentials and ensuring government compliance * Conduct an unbiased in-depth statement review process' to recover credits, erroneous payments, contract compliance, and more * Leverage supplier portals to reduce costs and streamline AP processes Fine out if you are using the best practices when it comes to your Government Regulation Compliance program. Or to watch the webinar on-demand, go here: http://bit.ly/1zAPxJC.

1. CONFIDENTIAL 2015
Improve Regulatory Compliance & RiskImprove Regulatory Compliance & Risk
Management using Best PracticesManagement using Best Practices
February 26, 2015February 26, 2015
LIVE WEBINAR
Speakers:
Joe Flynn, Lavante Inc.
Mary Schaeffer, AP Now & Tomorrow

2. ReadyTalk Webinar Interface
Listen–only mode teleconference
Ask Questions
• Question function in ReadyTalk webinar at the
Left side of your console
• Submit questions privately
• We will answer them during the presentation as
well as at the end
Listen through your computer.
• There is no dial in number
2

3. Mary Schaeffer
Editorial Director & Publisher
AP Now and Tomorrow
Education Director & Editor-in-Chief
IFO
marys@ap-now.com
https://www.linkedin.com/in/accountspayable
Introductions – The Panelists
Joe Flynn
Co- Founder of Lavante, Inc
joe.flynn@lavante.com
http://www.linkedin.com/in/jflynn10

4. Agenda
• Introduction
• Strategic Objectives
- Challenges
- Solution
• Main Elements of a Supplier Management
Process
• Top 6 Best Practices
• ROI Calculator
• Q&A
4

5. Main Elements of Supplier Management
1. The Communication Gap
2. Data Collection
3. 3rd
Party Integration & Validation
4. KPIs and Reporting
Communication is the Foundation to Regulatory and Risk Reduction
5

6. Main Elements: #1 Communication Gap
• Multiple internal locations &
divisions
• Numerous departmental needs
• Many documents and data required
• Diverse supplier population
• Supplier data constantly decays
• Compliance to internal controls
requires multiple manual touches
Manual Intervention – Poor Compliance
6

7. The Vendor Master File Solution – Simplified
• Internal controls configuration
• Establish configurable workflows
• Leverage contact information
• Utilize multimode outreach
• 3rd Party integration / validation
• Cross company visibility
• Real-time reporting
• Auditable process
Automated Controls – Great Compliance
7
3rd
Party Validations

8. Main Elements: #2 Data Collection
• Multiple contacts details
• Document collection
• Regulatory details
• Diversity information
• Tax documents
• Contracts
• Other…
Deploy configurable, time based workflows
8

9. Main Elements: #3 Third Party Integration
• IRS – Tin validation
• OFAC -Terrorist watch list
• EPLS – Excluded parties list
• W8 Collection - management
• USPS address validation
• International ID collection
• Other…
Define Controls to Mitigate Risk
9

10. Main Elements: #4 Reporting and KPIs
• ROI
• Reporting
• Configurable workflow
• Configurable fields
• Communication engine
• Cross department visibility
• Other…
The benefits of the changes must outweigh the costs
10

11. Supplier Management: 6 Best Practices
11
Improve processes and controls
1. Vendor Master File cleanse process
2. Close the supplier communication gap
3. Automate compliance and validation
- IRS, OFAC / SDN, USPS, EPLS
4. Define internal risk tolerance
- TIN Verification
- W8 FATCA compliance
5. Review supplier statements for open credits
6. Deploy supplier portals

12. • Managing suppliers is a process, not a project.
• Severely limit editing access to the vendor master file.
• Role-based SoD (segregation of duties) controls can prevent fraud.
• Do not share IDs and passwords.
• Vendor change reporting by user.
• Deactivate old suppliers while maintaining old data.
Best Practice #1- Cleanse the Vendor Master File
Best Practice #1

13. Ongoing Vendor Management / VMF Cleansing
Eliminate duplicate suppliers
– Advanced duplicate supplier algorithms
– Multiple scans
Associate related suppliers
– Eliminate duplicate vendor master files created
– Identify related suppliers: parent and subsidiary
– Manage suppliers’ multiple addresses
Existing vendor file
– Request aged data, such as insurance certificates
– Portal to accept data changes
– Document management
13

14. Best Practice #2 - Close the Communication Gap
• Good information flow to suppliers, leads to good
supplier relations and an efficient AP department
• Provide information via internet for suppliers
• Make a welcome letter available spelling out terms
and where to find information
• Inform the supplier of their various contacts
Best Practice #2
Establish a repeatable process to communicate relevant information
to vendors
14

15. Best Practice #3 - Define your Internal Risk Tolerance
15
Best Practice #3
•Create companywide risk-tolerance plan with
defined controls.
•Automate supplier outreach to collect data
accurately and efficiently.
•Leverage filtering tools to determine document
and data accuracy against internal control set.
•Use auto-validation service to continually check
supplier data against TIN, OFAC, SDN, address
and other databases, providing alerts when
suppliers are non-compliant.
•Deploy dashboard to track progress on strategic
projects.

16. Understanding Your Risk Mitigation Strategy
Which validations are right for us?
•TIN collection and matching— EU VAT
•W-8 collection— FATCA compliance
•OFAC (Office of Foreign Assets and Controls)
•SDN (Specially Designated Nationals)
•SAM (System for Award Management)
•OIG — LEIE (List of Excluded Individuals and Entities)
•Regulatory compliance
•Bank routing validation
16
Organizational alignment

17. Best Practice #4 - Automate Compliance
17
• Automatically collect, store and manage all
supplier data
• Patented communication engine
automatically performs outreach to collect
supplier data accurately and efficiently
• Auto-validation service continually checks
supplier data against TIN, OFAC, SDN,
address and other databases, providing
alerts when suppliers are non-compliant
• Track progress on strategic projects
• Dashboard tracks progress on strategic
projects such as ACH, COI collection and
tracking
Best Practice #4

18. IRS TIN Matching
18

19. Foreign Account Tax Compliance Act
19

20. OFAC Screening
20

21. Best Practice #5 – Review Supplier Statements
21
• A vendor credit is money held by the
vendor which rightfully belongs to the
customer.
• Vendor credits are created for a
variety
of reasons.
• Reviewing vendor statements should
be looked at as a process not a
project.
Best Practice #5

22. What is Statement Recovery?
22
Statement Recovery: Identifies Overlooked Supplier Credits
• Duplicate payments
• Overpayments
• Returns
• Rebates
• Quantity Discounts
• Contract Discrepancies
• Overpaid Sales TAX
• Freight Overpayments

23. Implement an external Vendor Portal to reduce risk within your supply chain while
improving your internal controls.
It is better to crawl than to stand still.
• Identify your internal controls and risk tolerance profile.
• Automate the labor-intensive process of vendor communication
• Leverage the vendor communication for other important tasks:
- Vendor file cleansing
- Collecting W-9s and matching TINs
• For FACTA, collecting W-8s and determining 1042-S withholding
• Performing integrated supplier on-boarding
• Ongoing government validations for OFAC/SDN, SAM, EPLS, VAT
• More…
Empower your staff
23
Best Practice #6 – Deploy Vendor Portal
Best Practice #6

24. A Vendor Portal is an online interface that allows you to exchange
data online with your suppliers electronically.
The 3-Step Deployment
1) Establish your internal supplier communication controls and needs
• Data collection
• Document management
• Segregation of duties
2) Integrate workflow for data validation
• Internal approval workflow
• External workflow — third parties to validate data
3) Enable E-commerce
• Invoicing and discounting
Best Practice #6 – Steps to Success

25. Vendor Portal Obstacles Consistent
• Lack of money for AP projects (cited by 45.1%)
• AP is far down the overworked and understaffed IT
department’s list of things to do and departments to please
– 44.4% cited limited IT resources
• Lack of management support (cited by 34%)
– The bills are getting paid
– They have no idea what’s going on behind the curtain
• Many respondents just don’t know where to start!
25

26. 3 Major Themes
• Managing the Vendor Master File is becoming the
norm
– Manual processes and lack of automation
– “Need” not a “want”
– Government regulations increasing
• Many competing strategic objectives
– Needs as diverse as the companies themselves
– Cross-department workflows
– Each task labor-intensive
• No clear way to quantify cost/benefit of projects
– Manual processes daunting – do not want to ask for
headcount
– No clear way to value compliance
– Lack of automation tool set
26

27. Understanding Your Current Expenses and Processes
• Analyze current cost structure
by department
• Identify targeted areas for
improvement
• Establish level of investment
against level of savings:
Create ROI model
• Evaluate progress
27
Supplier Management Cost Analytics

28. Closing Thoughts
• All business should use a Vendor Portal as part of their risk mitigation and
control strategy.
• It is better to crawl toward supplier compliance than to stand still
• Supplier Management should be looked at as a controlled process not a
project.
• Vendor Portals should reduce internal labor – High ROI
• Government regulations issues are increasing
• Know your strategic objectives
28

29. Thank you / Questions
Q&A
29
Mary Schaeffer
Editorial Director & Publisher
AP Now and Tomorrow
Education Director& Editor-in-Chief
IFO
marys@ap-now.com
https://www.linkedin.com/in/accountspayable
Joe Flynn
Co- Founder of Lavante, Inc
joe.flynn@lavante.com
http://www.linkedin.com/in/jflynn10

30. About Lavante
13 years delivering supplier management
software solutions
– 125+ Fortune 1000 customers
– Patented technology and processes
– Long-term customer relationships
Lavante Connect™ Platform
– SIM: Reduces Risk & Enhances compliance
– Automation of supplier qualification and VMF cleansing
– Recovery: Identifies open credits and provides highest
recovery rate quickly
– Open platform enables 3rd
party development and
integration partners
– >2 million supplier connections in database
Speed to Value
– Ease of deployment
– Quick outreach and immediate vendor compliance
– Ease of use
30
• SaaS Enabled
• Open API
• Multi-Language
• SSAE16
• SOC2 Type2
• ERP Integration
• User Controls
• SSO Integration
• Reporting & Analytics

31. 31
About Mary Schaeffer
• Publisher and editorial director of the Accounts Payable Now
& Tomorrow monthly newsletter
• Editor-in-Chief; Education Director IFO
• Publisher of weekly e-zine, e-AP News
• Nationally recognized accounts payable expert and consultant
• Creator of Institute of Financial Operations Accounts Payable
Innovation Certificate program
• Creator of numerous NASBA CPE courses for CPAs and AP
professionals
• Author more than 15 business books including the Controller
& CFO’s Guide to Accounts Payable and Fraud in Accounts
Payable: How to Prevent It
• M.B.A. Finance, NYU; B.S. Math, York College (CUNY)
• She can be reached at marys@ap-now.com