Reinventing AP: How employing automation leads to scalable growth

Reinventing AP:
How employing automation
leads to scalable growth
Mark Brousseau
September 9, 2020 Sponsored by:

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Moderator
Adam Larson, DES
Senior Manager of Educational
Technology Enablement
IMA

4
Featured Presenter
Mark Brousseau
President
Brousseau & Associates

5
Learning Objectives
1. Describe how AP automation empowers finance teams and
employees.
2. Recognize the benefits AP automation extends company-wide.
3. Explain how to leverage benchmarks that support your AP strategy.

Agenda
1. Shifting job functions around the globe
2. How legacy processes limit your ability to adapt and grow
3. Hallmarks of best-in-class AP performance
4. The art of leveraging analytics and industry benchmarks
5. Actionable ideas for transforming AP

Work is changing

Expand opportunity and value
Cost reduction isn’t the
endgame for process
improvement.
Work
Outcomes
FIXED
Potential Value
DYNAMIC
Redefine work and redesign
jobs to free capacity
Redefining work for new value, Deloitte Insights 2018

3%
1%
5%
33%
58%
None of us worked remotely
Most of us have returned the office
All of us have returned to the office
Most of us are working remotely
All of us are working remotely
Source: IOFM Virtual Town Hall Meeting, 6/21/20
The new way of working in AP
Institute of Finance and Management (IOFM) Virtual Town Hall Meeting
How has COVID-19 effected the way your AP team operates?
8% of AP pros
are working an
additional 2 hours
per day.
33% of AP pros
are working longer
days since the onset
of COVID-19.

5%
22%
6%
20%
25%
22%
No response
Something else
Inadequate visibility
Missed invoice due-dates
Fraud and compliance issues
A spike in supplier inquiries
Source: IOFM Virtual Town Hall Meeting, 4/27/20
New operational challenges
What is the biggest AP challenge that you currently face?
7% of AP leaders
are “overwhelmed”
by their current
processes.
19% of AP
departments are
“concerned” about
their current invoice
processes.

How AP staff spend their day
84%
16%
Institute of Finance and Management (IOFM) AP Department Benchmarks
Transaction processing
Value-added activities

The workweek is changing
Work About Work
Skilled Work
Strategy and Planning
Anatomy of Work Index, 2020 Asana and Sapio Research
More hours on the job.
Less focus on meaningful work.
60%27%
13%

7 skills of the future
Saadia Zahidi, Managing Director, Centre for the New
Economy and Society, World Economic Forum

Skills with the biggest shift in hours spent by 2030
Source: McKinsey & Company 2018
Automation will change the skills workers need
Physical & manual
• Equipment
operation
• Inspecting
& monitoring
-14%
Basic cognitive
-15%
• Data input &
processing
• Numeracy
Higher cognitive
• Creativity
• Complex
information
processing
+8%
Social & emotional
• Initiative taking
• Leadership &
management
+24%
Technological
• Advanced
IT skills
• Basic digital
skills
+55%

“…what are the mindsets, tools, and
capabilities we need in order to
embrace the value that humans can
bring to work?”
Redefining work for new value, Deloitte Insights 2018

AP’s value is increasing
The current perception of AP
The State of ePayables 2019, Ardent Partners
Exceptionally valuable
Very valuable
Somewhat valuable
Little value (back-office function)
19%
36%
24%
21%

Improved
cash flow
Your team has more to offer:
Stronger
internal and
external
relationships
AP’s value is increasing
Maximized
buying power
and cost
savings
Higher profits
and a stronger
bottom line
Strategic
insights
through spend
visibility

What’s holding AP back from adding more
value to the organization?

Poll Question 1
a) Approval times
b) Payments (late, duplicate, etc.)
c) Invoice exceptions
d) Internal and external relationships
e) Data visibility and reporting
What is the biggest pain point in your AP process today?

Poll Question 1 Results (Placeholder)

Legacy processes limit
AP’s full potential

Historically:
• Promote inefficiency
• Choke the full potential of your AP department
• Create widespread bottlenecks
Legacy processes challenges

Executives
• Reduced spending
landscape visibility
• Data analysis
difficulties
• Inaccurate liability
forecasting
Finance
• Time wasted
cleaning invoices
and chasing
approvals
• Too many invoices
to process
• Unfamiliarity with
department approval
structures
Approvers
• Unauthorized
employee
purchases
• No insight into
policy or impact
on budgets
• Overcommitment
of spend outside
of budget
Submitters
• Time-consuming
process
• Cumbersome
policies impede
adherence
• Lack of submission
visibility and status
Legacy processes impact everyone

AP’s biggest pain points
Lack of visibility into invoice and payment data
Getting the budget to invest in automation
Too much paper
Lack of respect/status within the organization
Invoice/payment approvals take too long
High percentage of exceptions
62%
51%
49%
33%
40%
24%

• Decreased productivity
• Missed payments
• Low compliance rates
• Lack of internal controls
• Incomplete spend visibility
Challenges multiply at scale
Compounding issues with long term impact
• Frustrated vendors
• Infighting and blame games
• Increased risk of fraud
• Inefficient and costly payments

Fraud is a risk to everyone
Shark Tank’s
Barbara Corcoran
Loses Almost
$400,000 in
Invoice Fraud Scam
Former Tesla Employee
Charged Over $9.3m
Embezzlement Scheme
Employee Accused
of Embezzling More
Than $300,000

The road to improvement
Implement
AP automation
Eliminate paper
and reduce
manual tasks
Produce insightful
reporting and analytics

a) Manual—we manually enter invoice and payment data into
our financial system
b) Somewhat automated
c) Fully automated
d) Not sure
How would you describe your organization’s current level
of AP automation?
Poll Question 2

The human and business
benefits of automation

Employing AP automation
See (nearly) immediate value
Performance Area Benefit
Invoice processing costs Nearly 6x lower
Single invoice processing time More than 3x faster
Invoice exceptions rate 57% lower

Comparing apples to automated apples
Best-in-class All others
Cost to process a single invoice (all-inclusive cost) $2.18 $12.60
Time to process a single invoice 2.9 days 10.8 days
Invoice exceptions rate 10.1% 23.3%
Percentage of invoices processed ‘straight-through” 65.3% 19.2%
Percentage of suppliers that submit invoices electronically 49.0% 16.0%
Percentage of invoices linked to a Purchase Order (PO) 79.2% 31.7%

Engagement is key
The State of Work, 2019 Slack
I understand what I need
to do in my role to be
successful
Being able to adapt quickly
is critical to my company’s
long-term success
At my company, we have the
tools and systems in place to
adapt quickly to industry
changes
I feel empowered to make
strategic decisions or to
pursue new business
opportunities
Aligned workers who agree
Unaligned workers who agree
90% 43% 76% 19%83% 40% 75% 22%

AP’s top priorities
Top priorities work synergistically
Improve AP reporting/data analytics 48%
Eliminate paper and reduce
manual tasks 47%
Implement AP automation 40%
Reduce processing costs
Improve connectivity/collaboration
with suppliers 27%
30%

71% of AP departments are automating
14% of AP departments
process supplier invoices
in a completely manual
environment.
59% of AP departments
missed an invoice due
date during COVID
because of operational
issues.
9%
44%
11%
27%
6%
How would you describe your current level of AP automation?
Not very automated and we have
no plans to automate
Not very automated but we plan
to automate further
Largely automated and we have
no plans to automate further
Largely automated, but we are
automating further
Fully automated with few or
no manual processes

Life before and and after automation
Before
• Tedious, manual data entry
• Tracking down invoices
• Micromanaging invoice approvals
and exceptions
• Manual policy enforcement
• Increased risk of fraud
• Managing vendor relationships and lists
• Submitting and recording payments
After
• Improving vendor relationships
• Identifying discounts and cost savings
opportunities
• Creating mutually beneficial payment
strategies
• Informing strategic growth
• Delighting employees

Poll Question 3
a) Non-existent
b) Minimal at best
c) Okay, but we have significant blind spots
d) Good—but we need to do better
e) Full visibility
How would you characterize the current level of visibility
into spending at your company?

Measure what matters

The art of leveraging benchmarks
Focus on what is important
Continually verify what matters
Compare “apples to apples”
Compare data over time
Compare data across industries
The magnitude of trends
The direction of trends
The driver of trends

Intelligent data is critical
Visibility helps turn data into insight.
Having an empowered, engaged
AP team helps, too.
Critical; we rely on data/intelligence to drive
projects, improve performance, and achieve goals
Important; we frequently utilize data/intelligence
in our programs
Not important; data/intelligence is not leveraged
by our team for major tasks
33%
55%
12%

88% of enterprises stated that visibility
into data is either critical or important
to its financial operations

Applying AP data
AP’s Top Uses of Data and Financial Intelligence
Forecasting,
budgeting, and
planning
Cash flow analysis Fraud and
compliance
management
Invoice exception
handling
Improving
collaboration
between finance
and procurement
Enhancing supplier
management
(communications,
negotiations, etc.)
64%
61% 58% 55%
48%
30%

Report your reality
Tailor your invoicing analytics to track what’s most relevant:
• Cost to process
• % processed straight-through
• Time to process
• % of captured early payment discounts
• Compliance and exception rates
• # processed
• % with PO

Poll Question 4
a) Forecasting, budgeting, and planning
b) Cash flow analysis
c) Fraud and compliance
d) Invoice exception handling
e) Enhancing internal and external relationships
How is your organization utilizing AP data?

Closing thoughts and
additional resources

• AP should evolve to become strategic, forward-thinking, analytical
• Adopt a collaborative, customer service-led mentality
• Seek out holistic AP automation solutions
• Choose powerful, scalable solutions for growth adaptability
Closing Thoughts

1. Employ automation to solve most, if not all, of the issues caused by
manual processes and legacy systems.
2. Reinvent AP to focus on adding strategic value, engaging with
more stakeholders to garner support.
3. Build an AP function that supports better business outcomes
through data-backed insights.
Start making changes today

Anatomy of Work Index by Asana:
Anatomy of Work Index
The State of Work by Slack:
The State of Work
Success With AP Invoice Automation Report by Gartner:
AP Invoice Automation Report
Redefining Work For New Value by Deloitte Insights:
Deloitte Insights
Additional Resources

51
Questions & Answers
Use the Q & A Panel to send your questions to our panelists.
Mark Brousseau
President
Adam Larson, DES
Senior Manager of Educational
Technology Enablement
IMA

52
Thank you to Our Presenter!
Mark Brousseau
President

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Reinventing AP: How employing automation leads to scalable growth

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