Why a Critical Look at AP Processes Makes AP and Dynamics ERP Technology Work Aligning Processes with Technology Enables Efficiency and Empowers Decision Making GPUG Premiere Sponsor Booth #313
Ever since America’s first business opened its doors hundreds of years ago, accounting has had a major influence in successfully moving businesses forward. In fact, accounting’s role in efficiently obtaining and paying for what’s needed to run the business, and ensuring prompt and accurate receipt of goods and services in return, is the foundation of modern commerce. Known as procure‐to‐pay (P2P) in the accounts payable (AP) realm, this cyclical process seems very simple. Add to the mix the speed and globalization of commerce today – marked by thousands of transactions among a myriad of suppliers in multiple countries and industries – and a seemingly simplistic P2P process can quickly become very complex. More and more organizations are turning to paperless AP document management and workflow technology to manage their increasingly diverse and scattered P2P processes. As a provider of AP document management and workflow technology for more than 30 years, Metafile Information Systems understands technology’s pervasive impact in driving productivity, efficiency and cost savings through automation. We also understand that technology only works as well as it does when applied to an efficient P2P process. Unfortunately, too many organizations are unknowingly choosing flash over substance, and are implementing AP document management and workflow technology before aligning their AP processes to best support it. When AP technology is applied to an efficient P2P process, organizations in all industries are best able to drive real efficiency. Additionally, when AP technology is fully integrated with enterprise resource planning (ERP) solutions such as Microsoft’s Dynamics suite, accounting is in the best position to use the efficiency and visibility AP technology cultivates to empower the C‐suite to make sound, informed decisions. The accounting function also is best positioned to elevate itself from cost center to revenue driver by enabling leadership to drive measurable return on the organization’s ERP investment. What follows is a comprehensive look at opportunities to empower and elevate accounting departments in all industries from task completer to strategic and trusted advisor for the C‐suite, including: • Determining and evaluating the real impact of paper and process challenges; • Enabling intelligent automation in accounting to drive real efficiency; • Research regarding the extent to which accounting professionals are using AP document management technology and prioritizing AP/ERP technology integration; and • Methods for evaluating AP technology vendors’ experience in enabling intelligent automation through AP/ERP technology integration. The Paper and Process Challenge No matter what industries they serve, all accounting departments are challenged to manage their P2P processes effectively. Those challenges include: • Efficiency – An efficient P2P process means timely purchase orders, invoice approvals and payments, and satisfied stakeholders. • Cost savings – Savings opportunities, such as early‐payment discounts and avoidance of late‐payment fees, are benefits of an efficient P2P process. • Transparency and visibility – Finance executives can gain real‐time knowledge and visibility into the “spend” side of the organization to uncover opportunities for improvement. Metafile Information Systems, Inc. 1
• Intelligent use of reliable data – Invoices and supporting documentation should be inputted, transmitted and shared within the AP department and across the enterprise so that the intelligence, accuracy and integrity of data is preserved and used to support decision making. • Talent management – The accounting department’s best employees should be matched with the right responsibilities. Compounding these challenges is the paper problem. Quite simply, information stored on massive quantities of paper can’t be shared, understood or acted upon efficiently, and it is this reality that stifles a would‐be efficient P2P process. Not knowing where invoices and purchase orders are located, when they are due, and how much they are worth perpetuates accounting as a “black hole” of inefficiency. Getting back on track means understanding the role accounting best practices can play in ensuring core challenges are addressed – even in advance of document management and workflow technology. It also means demanding more from your data, promoting efficiency and accuracy with trusted data centers – made possible by ERP solutions that are integrated with AP technology – that can be accessed used with confidence by the right people at the right time to extract the right results. Evaluating the Impact of Paper and Process on P2P Determining if the accounting department is emphasizing efficiency, cost savings, and transparency, promoting effective talent management and driving real business value requires a critical look at the organization’s contributors to an efficient P2P process. They include: • Invoice processing time – Take the accounting department’s processing pulse by tracking the progression of a single invoice as it winds its way through the department. How are invoices received and processed – in paper‐based or electronic format? How long does the process take? At what points does the process encounter bottlenecks? How might the accuracy and integrity of data be impacted or otherwise affected along the way? • Invoice processing priority – Find out if the organization misses early‐payment incentives – or, worse, gets saddled with late‐payment fees. Is there a discernible priority when it comes to processing invoices, or is it simply the luck of the draw? • Invoice processing costs – Beyond potential overtime for accounting staff, determine how much the organization spends on postage, courier services and related elements to process an invoice. • Vendor involvement – Compare the number of calls placed to and from suppliers and customers to the number of transactions actually processed. Multiple calls per invoice mean barriers to efficiency. • Vendor efficiency – How efficiently are vendors generating invoices, fulfilling orders and ensuring timely shipments? Repeated breakdowns in the process present roadblocks to efficiency – especially when they increase costs. Enabling Intelligent Process Automation in Accounting Migrating from a paper‐based process to a computerized one is only part of the accounting solution. True automation results when accounting systems deliver built‐in intelligence across the customer and supplier landscape so that, after the very first time information is entered at any point, the data will never have to be rekeyed. Instead, it will appear automatically as work and data flow. When new information is needed, it will simply be added to the process. 2 Metafile Information Systems, Inc.
CASE STUDY SIDEBAR: CENTRAL MAINTENANCE AND WELDING About Central Maintenance and Welding • Central Maintenance and Welding, Inc. (CMW) was founded in 1966 and is headquartered in Lithia, Fla. • CMW’s 375 employees provide customized welding, construction, fabrication and maintenance services in the plants and facilities of chemical, mining, power generation and other companies in Florida and internationally. Situation • CMW’s P2P process is largely rooted in materials used and time spent in conjunction with customers’ projects. • Once materials are purchased, the resulting invoices and supporting documentation are provided to the customer. A CMW invoice is also provided that includes billing for employees’ time on the project. • The CMW invoice is designed to bring together all vendor invoices – from time sheets, to equipment logs, to stock transfers and more – to facilitate prompt payment. • CMW’s AP and accounts receivable (AR) departments were entirely paper‐based, operating without standardized procedures. Piles of paper‐based vendor and customer invoices, purchase orders, time sheets, and supporting documentation prevented CMW from providing and receiving accurate payments from suppliers and customers for services rendered. Results • Seamless integration with the Microsoft Dynamics GP solution. Metafile facilitated data sharing, indexing and search between its MetaViewer AP and AR document management solution and CMW’s Microsoft Dynamics system. • Standardization of AP and AR processes. Metafile experts and the company’s MetaViewer solution successfully transitioned CMW’s AP and AR functions from 100 percent paper‐based to 100 percent paperless, laying the foundation for immediate and measurable return on investment. • Empowering future decision making. As CMW continues to expand and grow, the MetaViewer solution will offer the organization’s leaders a living, active repository of information they can use to promote confidence in future financial decision making. Invoice capture, document management and workflow automation technology is available to help organizations introduce visibility into accounting processes and identify and resolve paper‐ and process‐based breakdowns. By tracking the flow of an invoice within, outside and among P2P stakeholders, accounting leaders can identify and correct process breakdowns. They can also take steps to ensure the right talent is positioned in the right accounting roles to ensure efficiency. Technology also can help organizations easily identify the number and prioritization of invoices awaiting action. These and other elements create the level of process visibility that accounting department leaders and C‐level executives need to empower their own decision‐making. Prioritizing integration with the organization’s ERP Metafile Information Systems, Inc. 3
solution will enable the a accounting fun nction to help u upper managem ment extract mmaximum return from the organizatioon’s ERP investtment. For examp ple, technologyy can help organizations accoomplish data sh haring, indexing and searchinng between theeir document management solutions and their respectiv ve ERP systems s. Indexed data a and supporting documents can then be shared, so that ssearches in thee ERP system wwill retrieve invoices stored in n the documen nt management That means usesolution. T ers key in information only onnce, whether u using the document managem ment solution or ERP. Userss also can accomplish two‐ an nd three‐way innvoice matchin ng and retrieve e supporting in nformation acrross disparate ssources with ju ust a few mous se clicks. Intelligent AP/ERP technology automat tion is happeni ing now – and it is a distinct a area of opport tunity for accou unting leaders in numerous induustries nationw wide. The Cross‐Industry Oppo ortunity for Int telligent AP/ER RP Technology y Automation How does your organizatio currently mana your AP proc on age cess? Resp ponse Resp ponse Answer Op ptions Per rcent Coount Entirely pa aper-based 14.6% 35 3 Blend of pa aper-based activ and AP functi vity ionality in Micros Dynamics soft 59.2% 14 42 Entirely AP functionality in Microsoft Dynam P mics 16.7% 40 4 Paperless solution offered by an AP docum ment managemen technology pro nt ovider 6.7% 16 1 We dont 2.9% 7 MSDynamicsWorld recen ntly conducted d a survey amoong 240 Micros soft Dynamics uusers to determ mine the extennt to which resppondents in a v variety of indus stries may or mmay not be leveeraging techno ology – either A AP, ERP or both – to manage ac ccounting docuuments and wo orkflow. The suurvey found that close to 67 percent of resp pondents take between o one and five da ays to process iinvoices using a blend of pap per‐based activ vity and AP doccument manageme ent technology y. Despite the p presence and u use of technoloogy among theese respondent ts, processing invoices in a timely mann ner remains a c challenge facin ng the AP profe ession among more than 40 percent of responden nts. In additionn, while relative ely few responden nts are employing AP/ERP tec chnology integ gration in its entirety y, integration is s the priority ide entified as mos st likely to improve th he Microsoft Dynamics experience e. Integration is also identified bby nearly half ( (43.3 percent) of the sample as a priority over the next one to two years. 4 Metafile Info ormation System ms, Inc.
What does this mean to the AP profession? Quite simply, organizations looking to take their AP operations to the next level – emphasizing processing speed using quality data – can and should gain an operational edge by making AP/ERP technology integration a top priority. Ask the Right AP/ERP Technology Integration Questions Regardless of their industry, all organizations must ask three important questions to make sure their prospective AP technology partner not only understands operational ERP issues, but also knows how to fully integrate ERP capabilities with AP technology. It is this understanding that provides the organization the greatest chance to capitalize on the opportunity for AP/ERP technology integration, promoting P2P cost savings and efficiency and generating ROI for ERP investment. 1. What is the extent of the technology partner’s experience integrating AP technology with ERP solutions? How many ERP‐user organizations has your organization helped? In how many industries? What ROI range can be expected? Can your organization provide ERP‐customer references? 2. How much of your AP technology’s functionality is duplicated or otherwise available in ERP solutions? Can employees easily search for an invoice or a supporting document using any combination of information? Whether using the ERP or your solution, can those employees key information only once? 3. Can accounting leaders using your AP document management technology use the ERP to maximize their own visibility into the P2P process? Can project managers be notified as various workflow steps in the project are completed, speeding approval process and promoting speed and accuracy in P2P? Empowering the Organization with Intelligent Automation Even beyond generating efficiency, providing visibility and enabling productivity, delivering decision‐making confidence to the C‐suite is an additional yardstick by which any accounting department’s success is measured. While technology can play a vital role in promoting confident decision‐making using trusted data, AP document management technology only works best when: • It is paired with a core P2P process that is best aligned to complement the technology’s implementation; and • It is fully and strategically integrated with the organization’s ERP solution to drive intelligent automation and promote real efficiency and ROI. By putting AP processes before AP document management technology’s implementation, and by emphasizing the technology’s integration with the organization’s ERP solution, the accounting function can best leverage the efficiency and visibility AP technology creates to immeasurably elevate its role from a simple completer of tasks to a partner and trusted advisor helping the C‐suite make the best and most strategic business decisions. Metafile Information Systems, Inc. 5
Metafile Information Systems, Inc. • 2900 43rd St. NW • Rochester, Minnesota 55901Phone: 800.638.2445 • Fax: 507.286.9232 • Email: email@example.com • www.metaviewer.com