Achieving Continuous ROI with AP Automation Todays Speakers Helee - - PowerPoint PPT Presentation

Achieving Continuous ROI with AP Automation

Chris Doxey

President & Owner Doxey Inc.

Helee Lev

Chief Revenue Officer Goby

Carrie Buth

Solutions Engineer Goby

Today’s Speakers

Learning Objectives

üGain insight into the components of an ROI model for AP automation üDiscuss how to get started with your AP automation journey üLearn how AP automation provides additional insights to process improvements üDetermine how to measure ongoing AP automation excellence

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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

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The Strategy of AP Automation

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• 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

Key Components of an AP Automation Initiative

Pain Point AP Automation Solution

Visibility to Invoice Status

→ Supplier Portals and e-Invoicing

Automated Invoice Approval Process

→ Automated Approval Process with Workflow

Supplier Discounts

→ e-Invoicing

Faster PO Processing

→ e-Procurement

Supplier Visibility to Invoice Status

→ Supplier Portals and e-Invoicing

Cleaner and Better Supplier Master Controls

→ Supplier Portals and Supplier Onboarding Processes

Ongoing Validation that Controls Are Working

→ AP Self-Audit Tools

Tighter P-Card Controls

→ e-Invoicing and AP Self-Audit Tools

Too Many Systems

→ e-Invoicing and AP Self-Audit Tools

Manual Processes and Spreadsheets

→ e-Invoicing, e-Procurement, and AP Self-Audit Tools

Untrustworthy Data and Not Enough Time

→ AP Self Audit Tools

Too Many AP Automation Solutions

→ Focus on the Most Significant Pain Point!

Map Your AP Pain Points

1. Supplier Portals 2. eProcurement 3. eInvoicing 4. PO to Invoice Conversion 5. Document Management, Invoice Scan and Data Capture 6. Automated Matching 7. Automated Workflow Approvals 8. ePayment 9. System Access Verification Tools

• 10. Accounts Payable Self-Audit Tools

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Improved AP Cost, Controls & Compliance Cost Controls Compliance People Process Technology

Types and Benefits of AP Automation

THE BUXE Company

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What component of your AP process would you like to automate?

a. Invoice Processing b. Invoice Approval Process c. Invoice Matching d. Payments

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Polling Question #1

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Supplier Master

• Controls and

Validation

• Compliance
• Supplier Data

Standards

• Trade Directories

Invoice Processing

• Invoice Automation
• Accuracy and

Validation

Payment

• Payment Automation
• Accuracy and

Validation

• Fraud and Risk

Mitigation

Segregation of Duties Systems Access Delegation of Authority

Critical Corporate Controls

The Foundation of the AP Process

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AP and the Procure to Pay (P2P) Process

Defining AP Automation

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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

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The Five Myths of 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.

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AP Automation = Touchless!

What is AP Automation?

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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

Ten Benefits of AP Automation

What is the biggest impact of AP automation?

a. Reduced Risk b. Early Payment Discounts c. Reduced Invoice Processing Cost d. Improved Productivity

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Polling Question #2

Getting Started

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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 Three P’s of a Successful Implementation

The Components

• f your ROI Model

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Co Cost per Invoice Savings

Cost per Manual Invoice – Cost per Automated Invoice X Number of Annual Invoices

Ea Early Payment Discount Savings gs

Total Payments per Month X 12 X 10% (The Average Early Payment Discount Offered by Suppliers)

Sh Shipping & Document Sa Savings

Annual Invoice Mailing Costs + Filing Costs + Storage Costs

FT FTE E Savings gs

Salary + Benefits + Cost of Onboarding X FTEs Reduced or Redeployed

Quantitative Impact - Where are the Savings?

Cost Components of the AP AP Department

• Salaries (AP Managers and Staff)
• Benefits
• Admin and Onboarding Costs
• Allocations

Source

• AP Cost Center Reports and Budgets

Co Cost per invoice Total Cost of the AP Department/ Total Number of Invoices Processed

Defining the Cost per Invoice

Minus Divided By

Quantitative

Invoice processing Shipping and document savings Early pay discount savings FTE savings

Investment cost

Implementation costs Cost of downtime and evaluation

Qualitative

Improved control Improved cycle times Improved productivity

Investment cost

Implementation costs Cost of downtime and evaluation

ROI Model

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%:

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.

Cost Savings - Investment Costs Investment Costs

= 40% = simple ROI

Develop Your ROI

$700,000 - $500,000 $500,000

Measuring Success with AP Metrics

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The AP/P2P Automation Scorecard

Closing Thoughts & Downloadable Tools

üYour AP Automation Checklist üYour AP Automation Roadmap üSample ROI Models üYour AP Scorecards

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Downloadable Tools

THE BUXE Company

ACQUISITION APPROVALS GL CODING API INVOICE REPOSITORY VENDOR PORTAL ANALYTICS CTX, NACHA BANK PORTAL ERP BANK DIRECT PAYMENT

The Goby Process

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Goby’s Customer Focus

Thank you!

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Thank you!

Chris Doxey, CAPP, CCSA, CICA, CPC

President and Owner Doxey Inc. chris@chrisdoxey.com

Helee Lev

Chief Revenue Officer Goby hlev@gobyinc.com

Thank You & Questions