Mission Possible You Can Achieve Touchless Invoice Processing

Editor's Notes

1. Ever since the Financial Crisis, the world has become a very volatile world. Challenges that Finance departments are facing include: Unprecedented volatility in economic conditions in both financial and real markets Increased focus on risk including operational and legal risks On-going changes to regulatory requirements like the planned IFRS/US-GAAP convergence or EMIR/Dodd Frank acts Increasing globalization that requires Finance to rapidly extend their services to new geographies but also offers new opportunities to move towards global business services Continued pressure on margins that forces Finance departments to do more with less Innovative business models like the trend from product to solution businesses that pose new challenges for both accounting and performance management Companies are looking more than ever to their CFOs to guide them through these troubled waters. In this context, the role of the CFO is further evolving. While in the past there has been a long debate about how CFOs are moving up from being a steward towards becoming a strategist, the discussion has further developed in recent years.
2. Speaking Notes: A typical invoice-to-pay cycle and best-in-class invoice-to-pay cycle for the specific industry. How electronic invoice submission and intelligent error recognition solves a huge problem around the lag time between when the supplier creates an invoice and when it is actually captured in a system.  Whether it is a paper invoice sent to a plant that is then routed to AP, or even an invoice routed via EDI, if you don’t have intelligent error recognition at the time of invoice creation, you are just prolonging the cycle for which a supplier can get paid. How important an end-to-end procure-to-pay strategy is to invoice approval cycle times for AP.  When you have an “approval to pay” culture instead of an “approval to buy” culture, all of your workflow has to happen at the time of invoice.  Also, the promise land of touch-less invoices can only come with predefined line items on the purchase order AND the invoice.  This means your transactions need to be made off a catalog, item master or contract.  This means your invoices need to be created from a PO flip or by picking line items off of a contract. When you compress invoice capture and approval into less than a week of time, you are now looking at ~50 days of a payment window to optimize your working capital situation.  You want to offer supply chain financing to your high dollar suppliers (usually $500k+ per supplier), discounting to your medium dollar suppliers (usually $50k-$500k) and use cards for low $ suppliers to capture rebates. It’s critical to not forget the last step in the process…payment.  Best-in-class organizations see >90% of their payments done electronically.  And the only way to truly reduce AP costs is to reduce supplier inquiries…which only comes with rich remittance information.  Also, from a risk perspective, you don’t want to be in the business of maintaining a seller’s bank information.  So leveraging a network that partners with banks to do that is critical to achieve automation without the liability risk.