driving efficiency with invoice processing in complex business environments - simon collins, lexmark
TRANSCRIPT
Driving Efficiency with Invoice Processing
23rd June 2016
Simon Collins Product Marketing Director Finance Process Automation
© 2015 Lexmark International, Inc. All rights reserved. 2
Session overview
Context
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Changing finance is hard!
Large, complex global companies have many processes and systems. Consolidation is not always practical and cost-effective, and is often not a priority
So how can you achieve process excellence and deliver on wider strategic objectives through invoice automation?
Today, we will run through how companies in complex environments (often with multiple ERPs) use automation to improve their P2P processes and deliver on wider strategic objectives
Quick quiz
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How many people in the audience would say their company works in a complex business environment?
How many people in the audience would say they work for a multinational?
How many people in the audience would say they work with multiple systems and processes to get the results they require?
How many work in a multi-ERP environment (more than one brand of ERP and / or more than one instance of the same ERP) ?
?
?
?
?
Accounts Payable goals
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Faster time to entry Fewer errors No late payments
2015
Better visibility Streamline approval process
Better communication with vendors
Financial Process Automation?
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RECORD-TO-REPORT
QUOTE-TO-CASH
ERP
PROCURE-TO-PAY
Financial Process Automation – Major Processes
Sourcing
Contracting
Requisitioning / Other purchasing
Receiving
Invoicing
Payment
Pricing, Quoting & Contracting
Sales Order creation
Order fulfillment
Billing
Collection
Cash Application
Accounting Close
Journal Entries
Period Close
Reconciliation
Consolidation
Presentation
Procure-to-Pay Quote-to-Cash Record-to-Report
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The finance transformation challenge
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Complexity drives cost, not revenue
75% of global CFOs are in a transformation today
Only 25% of those succeed
What is the goal?
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Simplify
Enhance
Standardize
Lexmark and SSL survey
Explored the quality of P2P process in complex business environments
Particularly between those with multiple and those with single ERP instances
Examined how those in complex business environments used 3rd party tools to solve pains around complexity
The Data
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27%
73%
72%
Shared service organisations
Still on a journey to create shared services
Multinational organisations
86% of respondents who said they worked in complex environments were multi-national organisations in a multi-ERP environment
So while a single ERP system could help to simplify and standardize processes, many do not have that luxury and it will not always guarantee to solve all process pain
The Data
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86% Multi-ERP environment
56% couldn’t do this as had other higher priorities
Effort and cost was too high to justify
Different ERPs served different purposes and offered greater flexibility
Consolidating ERPs was too complex a project to undertake
The Data
38%
Considering consolidating ERP landscape
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Quick quiz
Which of the following pain points do you have in your organisation?
Manual entry across multiple systems
Breakdowns in workflow
Disparate processes
Poor visibility and access of documents such as invoices
None of the above
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?
Of those companies in complex environments these were the top 5 pain points
Pain points in complex environments
Access to data
Performance measurement
Disparate processes
Workflow breakdown
Manual entry
0 10 20 30 40 50 60
% respondents
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The top line shows those companies without automation and the bottom line those with automation
We can see a clear difference between the two, but it does also highlight the need to use the right types of automation tools
Pain Points – with or without automation?
Access to data
Performance measurement
Disparate processes
Workflow breakdown
Manual entry
0 10 20 30 40 50 60 70 80
% respondents
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Capturing all types of information, both structured and unstructured, is crucial for assuring full visibility. The best types of tools are those which capture all document types, including electronic and paper, so they can be translated into insightful and actionable information
The tools should be capable of working across multi-ERP and multi-system environments
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1 Achieve global visibility and insight across multiple systems
AP technology has changed dramatically in the last few years. It’s no longer just about capturing invoice information. Today, end-to-end analytics provide real-time valuable information for measuring user productivity, optimizing cash management, enhancing supplier relationships and ensuring compliance
Optimized processes mean higher throughput, reduced costs and improved performance
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2 Leverage technology for process improvement
When technology is complex or not user-friendly, user adoption will be challenged
Device-independent (multi-tenant) interfaces ensure employees will be effective and more willing to engage with the application from their computer, tablet or smartphone
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3 Ensure tools are as user-friendly as B2C technology
Financial Process Automation – Major Processes
Sourcing
Contracting
Requisitioning / Other purchasing
Receiving
Invoicing
Payment
Pricing, Quoting & Contracting
Sales Order creation
Order fulfillment
Billing
Collection
Cash Application
Accounting Close
Journal Entries
Period Close
Reconciliation
Consolidation
Presentation
Procure-to-Pay Quote-to-Cash Record-to-Report
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Need for visibility to purchasing, expense and liquidity
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Automate check and remittance processing
Integrate receivables processing with downstream systems
Reduce / eliminate manual data entry
Deliver a complete picture of purchasing and payment
Increase options for timing payment
Optimize working capital Increase visibility into financial
operations Shorten cash
conversion cycle
+-
DSODays Sales Outstanding
Cash Conversion CycleDays Cash Conversion
DOIDays of Inventory
DPODays Payables Outstanding
What sets us apart
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more invoices with fewer resources
PROCESSfor how you do business
FLEXIBLEinvestment
across the enterprise
LEVERAGEprocess owners with visibility and control
EMPOWER
What did we achieve?
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Focuses on value-add work
Better knowledge worker decisions (not keying, but analyzing)
Repurposed 3 employees—recovered $1.6M with in-house Credit Recovery team
Increases efficiency
76% automation efficiency benefit 35%-plus of invoices now received
directly via e-mail (no paper) Month-end accrual is now simple!
Enhances vendor relations
Proactively identify invalid invoices Track invoices through the entire
cycle Immediate feedback upon SAP
posting Vendors send invoices electronically,
enabling immediate review for accuracy
Speeds payment approval Avoid late payment fees Reduces emergency payment
requests for missing invoices