APP2P SPRING CONFERENCE & EXPO

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1 APP2P SPRING CONFERENCE & EXPO Accounts Payable Done Right: Supplier Engagement & Payments Optimization Ernie Humphrey, CTP CEO & COO

2 LEARNING OBJECTIVES Identify and remove inherent barriers to accounts payable success at your company. Define the benefits of improving supplier relationships and impacting productivity across the enterprise. Discover how to take control of your optimize how and when you pay suppliers. 2

3 OUR AGENDA The Evolution of Accounts Payable Why AP is Getting so Much Attention from Finance Leaders What AP Automation Done Right Looks Like Supplier Relationship Management: Challenges & Opportunities Invoice Processing: Challenges & Opportunities Taking Control of Payments: Challenges & Opportunities 10 Ways AP Automation Done Right Impacts the Bottom Line Closing Thoughts & Resources 3

4 The Evolution of Accounts Payable

5 THE EVOLUTION OF ACCOUNTS PAYABLE Source: Ardent Partners; The State of epayables2016 5

6 THE EVOLUTION OF ACCOUNTS PAYABLE Source: Ardent Partners; The State of epayables

7 THE EVOLUTION OF ACCOUNTS PAYABLE Areas Currently Managed/Supported by AP Source: Ardent Partners; The State of epayables

8 WHY ACCOUNTS PAYABLE, WHY NOW Real time data for better cash management has become one of the top priorities for CFOs. Companies are realizing the value of mitigating A/P processing costs. Companies are realizing the strategic value of improving supplier relationships. Companies are realizing the value of controlling how they pay suppliers. Payments fraud is still rampant. The right technology is affordable to any business size and cost-effective. 8

9 LIVE POLLING QUESTION Where is your company currently at in terms of the process of automating AP? A. Just starting the discovery phase B. Currently evaluating AP automation solutions C. Have our shortlist of AP automation vendors D. Implementing/have AP automation in place E. I don't know or N/A 9

10 THE ACCOUNTS PAYABLE PROCESS 10

11 AP Automation Done Right

12 WHAT AP AUTOMATION LOOKS LIKE CAPTURE: automatic invoice capture Scan invoices in bulk Convert paper invoices to searchable PDF documents Originate invoice in your accounting application or Invoice-to-Pay AP Automation Upload or documents or allow your vendors to invoice documents Automatically extract invoice header and general ledger-coded line item data with no manual invoice entry Link invoice documents with invoice data 12

13 WHAT AP AUTOMATION LOOKS LIKE APPROVE: route invoice for approval Route vendor invoices to specific approvers based on vendor name or other invoice data Customizable workflows mean you use your existing process and the workflows or make new ones Configurable require invoice approval prior to payment for all or only selected invoices Rigorous controls and tracking 13

14 WHAT AP AUTOMATION LOOKS LIKE AUTHORIZE: easy, on-the-go payment authorization: Scan System supports single and multiple payment authorizers Keep things secure with segregation of duties and payment limit alerts Two-factor payment verification provides additional level of security against unauthorized or fraudulent payments 14

15 WHAT AP AUTOMATION LOOKS LIKE PAY: send payments directly and securely Scan Advanced security through Bank Positive Pay ensures your bank automatically receives details of all checks authorized and issued Online account fraud protection Payments are sent from your own account no use of clearing or settlement accounts Payments are recorded automatically with 2-way real-time synchronization to your accounting system Remittance details transmitted automatically so vendors know when, why, and how they have been paid 15

16 LIVE POLLING QUESTION How would you characterize the overall state of your company s relationships with suppliers? A. Not good, poor communication, constant issues B. Not good but getting better C. Acceptable D. Good, we communicate and collaborate effectively E. I don't know or N/A 16

17 Supplier Relationship Management: Challenges & Opportunities

18 SUPPLIER ONBOARDING PAIN POINTS 18

19 SUPPLIER MANAGEMENT PAIN POINTS Inefficient Dispute Resolution 19

20 SUPPLIER MANAGEMENT PAIN POINTS Source: Paystream Advisors: 2017 Supplier Management Report 20

21 AP AUTOMATION: BETTER SUPPLIER RELATIONSHIPS Facilitates accurate supplier master records and all related banking information. Facilitates opportunities to capture existing discounts. Facilitates opportunities to negotiate discounts, i.e., dynamic discounting. Mitigates time spent on phone with suppliers resolving real or perceived issues. 21

22 Invoice Processing: Challenges & Opportunities

23 AP AUTOMATION: PROCESSING COST MITIGATION AP Performance: Best-in-Class vs. All Others Source: Ardent Partners; The State of epayables

24 Payments: Challenges & Opportunities

25 LIVE POLLING QUESTION How would you characterize the level of control you have regarding how you pay suppliers? A. None B. Not much C. Some, and we are working to gain more control D. Quite a bit, this is a strategic focus E. I don't know or N/A 25

26 PAYMENTS PAIN POINTS 26

27 PAYMENT TYPES Checks ACH Fedwire Commercial Card 27

28 COMERCIAL CARD PROGRAMS Purchasing Cards- Often leveraged for low-dollar purchases Corporate Cards- Business travel/t&e Fleet/Vehicle- Fuel and vehicle maintenance Ghost Cards- function like p-cards with reusable account numbers and spending limits that can be set up to refresh each month Single-Use Cards- A type of virtual card account. A supplier receives a one-time use virtual account number to affect the payment for an invoice (s). Virtual Card Program- Certain programs option allows a straight-thru payment through the card network or issuer where both parties are members of an electronic payment networks. 28

29 THE B2B PAYMENTS LANDSCAPE Source: Paystream Advisors: 2017 Electronic Payments Report 29

30 LIVE POLLING QUESTION How would you characterize the current mix of your supplier payments types: A. Majority by checks B. Majority by electronic payments (ACH, wire, card payments) C. About equal between checks and electronic payments (ACH, wire, card payments) D. I don't know. 30

31 PAYMENT COSTS BY PAYMENT TYPE Sending a paper check is 10 times more expensive than the internal or external cost of sending and receiving an ACH payment, and receiving a paper check is more than 5 times as expensive. The best estimated median cost of executing a wire payment is over $ The reported median cost range for outgoing card (Procurement, T&E and Virtual) payments is between $ $1.99. The median range of rebates rewarded on annual card spend is between basis points. 31

32 PAYMENT METHOD PORTFOLIO Your company s current portfolio of supplier payments by payment type Changes in percentages by payment types Goals relative to the mix of payment types to suppliers Changes in payments types offered Programs in place to convert suppliers to target payment types 32

33 SUPPLIER E-PAYMENTS: CONVERSION REALITY The risk of payments fraud is less with electronic payments More and more companies prefer electronic payments Technology can automate the collection and capture of remittances Technology can automate the linking of remittance and payment data SaaS-based solutions result in minimal overhead & oversight from the IT department 33

34 OVERCOMING E-PAYMENT ADOPTION OBSTACLES Effective and efficient processes in place to support desired payment types Being a good customer Communicating the benefits to suppliers Faster payment times More secure and accurate payments Working with epayables solution providers A multi-stage phase-out program Specify an electronic payment method within supplier contracts 34

35 AP AUTOMATION: TAKING CONTROL OF PAYMENT TYPES Mitigates payment fraud exposures Mitigates the cost of making payments Commercial payment types can offer rebates Improves working capital management Improves compliance and controls 35

36 ACTUAL TRENDS IN PAYMENTS FRAUD Source: 2018 AFP Payments Fraud and Control Survey 36

37 TOP BENEFITS OF E-PAYMENTS Source: Paystream Advisors: 2017 Electronic Payments Report 37

38 Closing Thoughts & Additional Resources

39 CLOSING THOUGHTS: SUPPLIER RELATIONSHIPS The Onboarding Process- make it a seamless experience. Educate Suppliers- the benefits of electronic document exchange, electronic payments, payment timing. Supplier Contracts- pay attention to terms including the payment terms (types and timing). Maintain Open Lines of Communication- minimize response times to supplier inquiries. Minimize the Asymmetry of Information Provide Pro-active and Consistent Support Visibility into Communications with Suppliers- leverage technology that offers a 360 degree view of supplier relationships. I 39

40 CLOSING THOUGHTS: PAYMENTS OPTIMIZATION I Efficient processes and technology to support desired payment types. Efficient exchange of invoices and related remittance information. An environment of proactive supplier relationship management. Understand your supplier s cost of accepting different payment types Communicate an understanding your supplier s cost of accepting payment types. Identify the conversion type that makes the most sense to a supplier- Check to ACH. Check to Commercial Card? Communicate the benefits to converting to a desired payment type. Partner with epayables solution providers 40

41 AP AUTOMATION IMPACTS THE BOTTOM LINE I 1. Mitigates invoice processing costs 2. Mitigates the payment of duplicate invoices 3. Mitigates time spent resolving supplier issues/disputes 4. Allows discount opportunities to be captured 5. Facilitates early payment program (dynamic discounting& supply chain financing) opportunities 6. Impacts the productivity of employees processing invoices 7. Mitigates payment processing costs 8. Rebates from commercial card payments 9. Improves working capital management 10. Impacts the productivity of employees approving & affecting payments 41

42 ADDITIONAL RESOURCES I Payment Automation: The Value Of Optimizing Payments Ardent Partners: The State of epayables 2017 Paystream Advisors: 2017 Electronic Payments Report The State of epayables 2017: The Convergence of Cash, Suppliers, and Intelligence The Strategic Advantages of AP Automation AP Automation ROI Calculator 42

43 Q&A

44 THANK YOU!!! Ernie Humphrey, CTP CEO & COO