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Electronic Invoice Presentment and Payment
(EIPP):Streamlining the Payment Process...
Electronic Invoice Presentment and Payment
(EIPP):Streamlining the Payment Process...
Presented by:Scott Hesse
August 9, 2010
Post Lunch wake up….Post Lunch wake up….Old McPayments had a farm.EIPP-OAnd on his farm he processed invoicesEIPP-OPaper was here and paper was there.. here a paper there a paper everywhere was
paper paper
Old McPayments had a farm.EIPP-OOn his farm he wrote many checksEIPP-OWrite them up, stuff them in. stamp them up, mail them outOld McPayments had a farm.EIPP-O
Old McPayments saw the lightEIPP-OHe knew ‘lectronics was the way to goEIPP-OE-Invoice here, Present and pay there, invoices gone, checks no more, ACH came
through the door
Old McPayments had a farm.EIPP-O
AgendaAgenda
Payments: Today Electronic Invoicing… A brief history. What is EIPP? What does EIPP offer organizations? Who needs EIPP? What is the cost of paper? How might EIPP integrate with a state’s current systems? How does EIPP work? Questions
Payments Today Payments Today
2003: U.S. Federal Reserve cuts check-processing offices in half; shrinkage continues.
2003: Check 21 Act: Stop the flow of paper checks.– Digital images of checks– Substitute checks
2004: Electronic payments outpace checks Electronic payments have doubled since 2000. Contactless technology
– Car key, camera, watch, mobile phone– Go-Tags– Digital wallets
Are cards needed?– Embossed letters no longer needed– No account number on card eventually
Goals: Speed up payments and reduce societal dependence on paper.
HistoryHistory
Electronic Invoicing began in the early 1960’s in the US.– The first iteration of EIPP came from the railroad
industry in the form of EDI. Retail leads the way. First UPC Code scanned in
Troy, OH in 1974.
First EDI standards developed in early 70’s with ANSI X12 standard being adopted in 1981
Emerging technologies… imaging, Internet, collaborative networks
What Is EIPP? What Is EIPP?
Online Bill Pay For Organizations
EIPP according to WikipediaEIPP according to Wikipedia
A collaborative web-delivered payment network Online bill pay for business transactions
Participants: Buyers (State/Agencies) Sellers (Suppliers) Third Party Stakeholders
All parties review and manage their transactions over the Internet
Program benefits equitably applied to all parties
What Does EIPP Offer?
EIPP BenefitsEIPP Benefits
Eliminate no-value touch points in the invoice receipt process
Control over same day invoice receipt and faster processing (maximize touch-less processing and routing)
Eliminate/reduce exception handling with Pre-payment Audits
Expand front-end discounts Faster payment processing best positioned for card
product payment, rebate and/or dynamic discounting Earn Procurement’s negotiated discount terms Generate incremental discount terms and rebates to
become profit center Value Add: Exception reporting for core resolution
Source: The Accounts Payable Network (TAPN), August 2010
Do you need EIPP?Do you need EIPP?
Who Needs EIPP? Who Needs EIPP?
Economic downturns/ Short-staffed/Budget shortfalls High percentage of paper (Invoices and/or Checks) Legacy Accounting/Finance systems Planned or currently implementing new ERP Multiple locations Limited or dated reporting capabilities High volume of transactions Complex Transactions: Data Capture
Line Item Detail (GL Account Number) 3-way matching (Order/Invoice/Receipt)
Fast Facts 1: The Cost of PaperFast Facts 1: The Cost of Paper
Paper is The Rule– 79% of invoices received manually– 63% of payments made manually
Significant Performance Improvement– Cost to process an invoice
– 2004: $34– 2006: $22– 2008: $14
In the past 2 years, role of A/P has become more strategic in 56% of agencies. 18 months ago, 40% of agencies believed A/P was playing a “more strategic” role.
Source: The Aberdeen Group
A/P Strategies for Success
October, 2008
Fast Facts 2: The Cost of Paper Fast Facts 2: The Cost of Paper
•Paper invoices cost 74% to 89% more to process than electronic invoices.
•Over 60% of agencies lack visibility into primary A/P spend and invoice data.
• 40% of agencies indicate they have the budget and intent to invest in A/P automation solutions in the next for 12 months.•Specifically, research by Aberdeen estimates that fully automated operations can save $10.87 per payment – approximately $1.1 million in savings for agencies processing 100,000 B2B payments per year.
Source: Aberdeen Group: The E-Payables Benchmark Report
Advancing Accounts Payable Automation, March 2007
How Does EIPP Integrate? How Does EIPP Integrate?
SupplierTrade Documents
Invoices
State/AgencyTrade Documents
Contracts, P.O.s, Receipts
A/P Data Electronically to State ERP
A/R Data to Supplier ERP
Exception Collaboration
Automated Prepayment AuditsState Business Rules
State Accounting Policy Compliance
On Demand, Networked, Internet Access Solution
Online Collaborative
Network
6- Payment with
Detailed Remittance data
7 - Analysis
EIPP Process Flow example EIPP Process Flow example
Buyer4 – Invoice
Approval
2 – Invoices
(electronic or p
aper)
3 - Audit
State or Agency
5 –Posting dataTo ERP system
Seller
1- Orders for Goods or Services
1b – Reference Doc Audits
(e.g. orders, receipts)
Shared Service or
EIPP Network
EIPP FeaturesEIPP Features
Invoice Lifecycle
Receive Receive, process & load all supplier invoices, paper or electronic
Present Present invoices electronically, including line item detail, in queryable format
Audit Identify billing errors prior to payment through automated business rules Add reference documents, such as orders or receipts, for robust line level audits
Approve Manage multiple levels of approval, as well as disputes & adjustments Enforce state/agency policies & maintain detailed audit trail
Pay Pay suppliers across currencies & payment methods via a single, electronic process
Post Automate and verify accounting code allocations before posting Load electronic payment & accounting detail into general ledger
Analyze Leverage robust data & tools for enhanced financial, process & supplier analysis
Where’s the puck???Where’s the puck???
A reporter was interviewing Wayne Gretsky and he asked: "Why are you always where the puck is?"
Wayne answered: "I'm not. I'm where the puck is going."
Electronic Invoice Presentment and Payment is where the “Payment Puck” is going!
QuestionsQuestionsElectronic Invoice Presentment and Payment (EIPP):Streamlining the Payment Process...
Electronic Invoice Presentment and Payment (EIPP):Streamlining the Payment Process...
U.S. Bank Scott Hesse, Corporate Payment Systems Public Sector
scott.hesse@usbank.com
240-420-1992
U.S. Bank Scott Hesse, Corporate Payment Systems Public Sector
scott.hesse@usbank.com
240-420-1992