Debra Johnson

Zappos Merchandising, Inc.

Accounts Payable Supervisor

AP Metrics

The power of metrics for positive change

About Zappos

Headquartered

in Downtown

Las Vegas

100% of items

inventoried. Over

9 million items in

FC’s

Zappos.com is a

service company

that happens to sell

shoes, clothing, etc.

Approximately

1,500

employees

Acquired by

Amazon in 2009

Over $1.0 Billion

revenue(2009) and

continues to grow

Made Fortune’s

100 Best Places

to work

Founded in

1999

Trade AP Landscape

Live on SAP Financials since 2007

SAP ECC 6.0

Interfaces (PIG)

Goods Receipts from Amazon Warehousing

Purchase orders from Zapporo (internally developed system)

Non-Trade AP Landscape

SAP ECC 6.0

Purchase orders from POiNT

Invoices processed through OpenText VIM (Vendor Invoice Management)

Accounts Payable Facts

Trade (Inventory related) Invoices

# Trade Invoice per year 250,000 – 300,000

% PO Based 100%

Received 90% via EDI 10% manual

Non-Trade Invoices

# Non-Trade Invoice per year 20,000 – 25,000

% PO Based 30%

Received 25% via EDI (not run thru OT)

75% via email, mail, fax

Headcount: 10 Trade AP; 3 Non-Trade AP

Centralized AP in Las Vegas, NV

Non-trade AP Business Challenges

No streamlined AP workflow

process

Challenging support

environment

Risk of late payments

Inefficient manual invoice

approval and entry process

Invoice visibility for AP

Difficult audit process

Too much paper

Trade AP Business Challenges

Reduce number of paper

checks (ACH)

Challenging support

environment

Risk of late payments

Invoice visibility for AP

Difficult audit process

Too much paper

(EDI)

Early payment process

8

Trade Metrics Total Number of Invoices

Open aging per rep per week Processed by system vs rep Over 30 days Posted by each rep per month Per week per rep Received on paper per week per rep

Number of Active vendors with product per week Statements reconciled per week Vendors using portal

Breakdown of payment types: ACH, check, etc. Aging Gross Receipts without invoices Year over year comparison Early Payment Discounts

9

Non-Trade Metrics

Total Number of Invoices Processed Non-PO PO

Number of Days to approve an invoice Days to approve a Purchase Order

Breakdown of payment types: ACH, check, etc. Percentage of invoices paid on time

10

Vendor Payments

Goal Reduce number of check payments

Metric Breakdown of Payment Types

Tools

Switch to ACH Switch to Credit Card

11

Vendor Portal SaaS

Goal Offer online self-help portal for vendors to reduce AP calls and promote early payment discounts

Metric Number invoices over 30 days Number of vendors using portal Early Payment Discounts

Tools On-line SaaS vendor portal

12

Working invoices 30 days

Goal Process all invoices over 30 days

Metric Invoice 30 days Aging # of invoices still open per rep for

the week

Tools Unpaid parked log

13

GR/IR

Goal Identify missing invoices and clear receipts that were manually paid

Metric Aging gross receipts without Invoices

Tools Aging gross receipts without Invoices

14

Statements

Goal Ensure statements are reconciled and we are taking care of our vendors

Metric

Number of statements reconciled per

week by rep

Tools

Verify all invoices Clears GR/IR Identify manual payments Clear up chargebacks reconciliation

15

Work closely with SAP team

Goal Systematic changes to improve matching and reduce AP touches

Metric

Number of invoices processed by system vs rep

Number of invoices posted by each rep for the month

Tools SAP

16

EDI

Goal Reduce number of paper invoices

Metric How many paper invoices per rep by

week/manual process

Tools EDI

17

Rep Workload

Goal Ensure any one rep is NOT overloaded

Metric How many new invoices per week by rep

Number of active vendors with product per week

Tools Reports

18

Invoice Payments

Goal Ensure invoices are being paid on time

Metric Percentage of invoice paid on time

Tools Internally built dashboard

19

Q&A

20

THE END