Achieving Continuous ROI with AP Automation
Today’s Speakers Helee Lev Chris Doxey Carrie Buth Chief Revenue Officer President & Owner Solutions Engineer Goby Doxey Inc. Goby
Learning Objectives ü Gain insight into the components of an ROI model for AP automation ü Discuss how to get started with your AP automation journey ü Learn how AP automation provides additional insights to process improvements ü Determine how to measure ongoing AP automation excellence Hi Hint nt: This webinar nar is full of templat ates and and checklists that at support yo your au automat ation n ini nitiat atives! 3
Agenda § The strategy of AP automation § Defining AP automation § People, Process, and Technology § Getting started! § The components and calculations of your ROI model § Your AP scorecard § Q&A 4
The Strategy of AP Automation 5
Key Components of an AP Automation Initiative • The AP transformation philosophy and its application entails: • A strategic vision of future business processes • A proactive rather than reactive approach to technology adoption • A focus on People, Processes, and Technology People Process Technology
Map Your AP Pain Points Pain Point AP Automation Solution → Supplier Portals and e-Invoicing Visibility to Invoice Status → Automated Approval Process with Workflow Automated Invoice Approval Process → e-Invoicing Supplier Discounts → e-Procurement Faster PO Processing → Supplier Portals and e-Invoicing Supplier Visibility to Invoice Status → Supplier Portals and Supplier Onboarding Processes Cleaner and Better Supplier Master Controls → AP Self-Audit Tools Ongoing Validation that Controls Are Working → e-Invoicing and AP Self-Audit Tools Tighter P-Card Controls → e-Invoicing and AP Self-Audit Tools Too Many Systems → e-Invoicing, e-Procurement, and AP Self-Audit Tools Manual Processes and Spreadsheets → AP Self Audit Tools Untrustworthy Data and Not Enough Time → Focus on the Most Significant Pain Point! Too Many AP Automation Solutions
Types and Benefits of AP Automation 1. Supplier Portals 2. eProcurement 3. eInvoicing 4. PO to Invoice Conversion Improved AP 5. Document Management, Invoice Scan Cost, Controls and Data Capture & Compliance 6. Automated Matching People Process Technology 7. Automated Workflow Approvals 8. ePayment 9. System Access Verification Tools Cost Controls Compliance 10. Accounts Payable Self-Audit Tools 8
! THE BUXE Company
Polling Question #1 What component of your AP process would you like to automate? a. Invoice Processing b. Invoice Approval Process c. Invoice Matching d. Payments 10
The Foundation of the AP Process Supplier Invoice Payment Master Processing • Payment Automation • Invoice Automation • Controls and • Accuracy and Validation • Accuracy and Validation Validation • Compliance • Fraud and Risk Mitigation • Supplier Data Standards • Trade Directories Segregation of Duties Critical Corporate Systems Access Controls Delegation of Authority 11
AP and the Procure to Pay (P2P) Process 12
Defining AP Automation 13
The Five Myths of AP Automation 1. The implementation process is too lengthy and cumbersome 2. AP automation solutions are too expensive and don’t fit our business model 3. No one will use our solution 4. We’ll still need to deal with manual AP processes 5. We will still experience fraud 14
What is AP Automation? • AP automation refers to the technology that is used to streamline and automate accounts payable processes which includes removing manual tasks and providing better visibility and control over important financial data. • AP automation reduces costs with an intelligent acquisition process as every invoice is automatically captured & coded, and data is extracted from any format. X AP Automation = Touchless! 15
Ten Benefits of AP Automation 1. Payment Accuracy 2. Early Payment Discounts 3. Improved Internal Controls and the Reduced Risk of Fraud 4. Accurate Supplier Spend Data 5. A Timely and Accurate Financial Close 6. Liabilities are Accurately Stated 7. Accurate Cash Forecasting and Management 8. New Efficiencies in the AP Process Allowing More Time for Analysis 9. Improved Customer Service and Supplier Relationships 10. Improvements in Working Capital 16
Polling Question #2 What is the biggest impact of AP automation? a. Reduced Risk b. Early Payment Discounts c. Reduced Invoice Processing Cost d. Improved Productivity 17
Getting Started 18
The Three P’s of a Successful Implementation Other Insights 1. Understand your current AP process 2. Establish a baseline 3. Use consistent terminology and calculations 4. Don’t take short-cuts! 5. Measure all costs and investments 6. Communicate success and issues 7. Hold a post implementation review
The Components of your ROI Model 20
Quantitative Impact - Where are the Savings? Cost per Invoice Savings Co Ea Early Payment Discount Savings gs Cost per Manual Invoice – Total Payments per Month X 12 X 10% (The Average Cost per Automated Invoice X Number of Annual Early Payment Discount Offered by Suppliers) Invoices FT FTE E Savings gs Shipping & Document Sa Sh Savings Annual Invoice Mailing Costs + Filing Costs + Storage Salary + Benefits + Cost of Onboarding X FTEs Costs Reduced or Redeployed
Defining the Cost per Invoice Cost Components of the AP AP Department • Salaries (AP Managers and Staff) • Benefits • Admin and Onboarding Costs Co Cost per invoice • Allocations Total Cost of the AP Department/ Source Total Number of Invoices Processed • AP Cost Center Reports and Budgets
ROI Model Quantitative Investment cost Invoice processing Minus Implementation costs Shipping and document savings Cost of downtime and evaluation Early pay discount savings FTE savings Qualitative Investment cost Improved control Implementation costs Divided By Improved cycle times Cost of downtime and evaluation Improved productivity
Develop Your ROI To find simple ROI, divide the Net Cost Savings by the investment costs, then report the result as a percentage. Here, the ROI turns out to be 40%: Cost Savings - Investment Costs = simple ROI Investment Costs $700,000 - $500,000 = 40% $500,000 Key Point : The return on investment formula seems simple but its usage is not always as straightforward as it looks. This is because the challenge in finding ROI for any AP Automation initiative is knowing which costs to use in the formula.
Measuring Success with AP Metrics 25
The AP/P2P Automation Scorecard 26
Closing Thoughts & Downloadable Tools
Downloadable Tools ü Your AP Automation Checklist ü Your AP Automation Roadmap ü Sample ROI Models ü Your AP Scorecards 28
The Goby Process ERP ANALYTICS API CTX, NACHA BANK ACQUISITION GL CODING APPROVALS BANK PORTAL INVOICE REPOSITORY VENDOR PORTAL DIRECT PAYMENT THE BUXE Company
Goby’s Customer Focus 30
Thank you! Thank you! 31
Thank You & Questions Chris Doxey, CAPP, CCSA, CICA, CPC Helee Lev President and Owner Chief Revenue Officer Doxey Inc. Goby chris@chrisdoxey.com hlev@gobyinc.com
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