business networks improve financial efficiency with e ... · •data entry / outsourcing...

© 2013 Ariba, Inc. All rights reserved.

Business Networks

Improve Financial Efficiency

with E-Invoicing

James Tucker, Senior Director, Network Strategy and Marketing [email protected] | @jbtucker3 | +1 650-390-1702

mailto:[email protected]

The strategic weapon – business network Leading the networked economy transformation

“Networked enterprises are

50% more likely to be a

market leader.”

2 © 2013 Ariba, Inc. All rights reserved.

Exceptions and inquiries

Discounts and payments

Matching and approvals

Common challenges in invoice-to-pay processing




Receipt and capture

Receipt and capture

High cost of paper invoices

Lack of compliance

Too many exceptions

Lack of control

“Nearly 77% of all incoming invoices

are still paper based.”

– Aberdeen, 2012

“15% of invoices have exceptions

adding 6.6 days to the cycle.”

– TAPN, 2010

“50% of prenegotiated discounts are

never captured.”

– Aberdeen, 2012

“$9 million in contract leakage

per billion in spend on average.”

– The Hackett Group, 2012


© 2013 Ariba, Inc. All rights reserved. 4

D r . M i c h a e l H a m m e r

Receipt & Capture


67%

25%

7%

% Electronic

BIC LAG AVG

$3.34

$6.29

$16.67

Cost per Invoice

BIC LAG AVG

Invoice / FTE

BIC LAG AVG

33K

11K

7K

Discounts & Payments

Matching & Approvals

Receipt & Capture

Receipt & Capture

• Mail / e-Mail / Fax

• Data Entry / Outsourcing

• Scanning / OCR

• E-Invoice (Ariba Network for

EDI, XML, CSV, Supplier

Portal, …)

Exceptions & Inquiries

The cost of being

less than world class

is growing.

Goeff Colvin

Sr. Editor, Forbes

‘Talent is Overrated’

“

”





Receipt & Capture

• Exceptions caught before

posted to ERP

• PO and Non-PO (i.e. contracts)

• Supplier Portal (self serve)

• E-Invoice (EDI, XML, CSV, …)

15%

35%

50%

% AP Staff on Inquiries

BIC LAG AVG

4%

17%

30%

% Exceptions

BIC LAG AVG



Invoices

BUYERS

AP

AcctCoding

Contract Match

Price Compliance Ship to

Address

InvoiceNumber

InvoiceDate

Bill-ToAddress

VAT/GST Compliance

Qty Threshold

Unit Amt Threshold

98%+ Auto Post

SUPPLIERS

AR

Errors

Exceptions

“Smart Invoicing”

There are no exceptions

to the rule that everybody

likes to be an exception

to the rule.

Charles Osgood

“

”

Matching & Approval




Receipt & Capture



0.2%

0.48%

0.94%

% Leakage

BIC LAG AVG

85%

70%

50%

1st Pass Match

BIC LAG AVG

• Invoice to PO (PO-Flip®)

• Invoice to Contract

• Invoice to Goods Received

• Routing & Approval Workflow

• Exception handling Workflow

Source: Hackett Group 2011 P2P Benchmark Report

4

10

21

Days to Approve

BIC LAG AVG

0%

20%

40%

60%

80%

100%

PO% Non-PO%

Do not look for

approval except for

the consciousness

of doing your best.

Andrew Carnegie

“

”





Receipt & Capture



1) Capture missed discounts through smart

invoicing approach

2) Rapidly enable more suppliers to increase

the amount of spend under discount

3) Introduce sliding scale discounts for savings

at any point along the invoice payment term

36%

1% 0.25%

APR on Short Term Cash

BIC LAG AVG

20%

3-5%

1%

% Suppliers with Discount Terms

BIC LAG AVG

50%

10%

% Discounts Captured

BIC LAG AVG

95%

Price is what you pay.

Value is what you get.

Warren Buffett

“ ”




Solutions for common challenges in invoice to pay




Receipt and capture

Receipt and capture

Capture 100% of your invoices in a

digital format from any supplier

regardless of volume, location,

or capabilities

Resolve invoice errors at point of submission with

self-serve supplier portal and over 80 network business

rules

Control payment timing and maximize

early payment discount capture

Electronic payment with detailed

remittance

Match invoices against POs,

contracts, and GRs

Workflow routing and approval

Flexible on-premise or cloud deployment

Ariba Network

PO and invoice

automation

Status and remittance

XML, EDI,

and CSV

Supplier portal

FAX

Paper

Scanning and OCR

PO matching

Contract matching

Goods receipt (GR)

matching

Workflow routing and

approval

Discount professional

Accounts payable (AP)

in SAP software

ACH and detailed

remittance

SAP General Ledger


The business case for e-invoicing It’s as easy as 1+2+3+4 = $10 million savings per $1 billion in spend

CHALLENGE SAVINGS OPPORTUNITY SUCCESS

1. Process $1 million per $1 billion in spend for average to large

Payables and Procurement organizations - Billentis

2. Discount $2 million + in discount savings for every $1 billion in

discountable spend – Aberdeen, Ariba

3. Working

capital $2.7 million in working capital impact for every $1 billion

per day of improvement of DPO, DSO, DIO

4. Compliance $4million in savings leakage for

every $1 billion in spend under contract – Hackett

4-for-1

1-for-1

2-for-1

3-for-1

Source: Billentis, The Hackett Group 2012 P2P Benchmark Report, Aberdeen, and Ariba results

Republic Service


© 2013 Ariba, Inc. All rights reserved.

Business Networks

Improve Financial Efficiency

with E-Invoicing

James Tucker, Senior Director, Network Strategy & Marketing [email protected] | @jbtucker3 | +1 650 390 1702

mailto:[email protected]

business networks improve financial efficiency with e ... · •data entry / outsourcing...

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