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Implementing SAP Invoice Management at Tullow OilVish Somaia – Pathway SAP Project Manager
Monday 24 November 2014
Implementing SAP Invoice Management
Vish Somaia – Pathway SAP Project Manager – Monday 24 November 2014
• Business Context
• Requisition To Pay Process
• Solution Overview
• Key Benefits
Contents
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Implementing SAP Invoice Management
Tullow has experienced exceptional growth over the past 5 years, resulting in more complex business operations
Increase in global operations: •4 new basins in 5 years •74% exploration and appraisal rate•Cost recovery exposure increasing year on year
• Increase in complexity of business operations• Continue to progress with operations in Ghana and Uganda and continued focus on growth in Africa and the Atlantic Margin
•Sales revenue has grown by 80% over the past 5 years
•Operating profit has increased by 198% over the past 5 years
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KENYA
ETHIOPIA
TANZANIA
MADAGASCAR
NAMIBIA
UGANDA
UK
NETHERLANDS
GHANA
GABON
MAURITANIA
IVORY COAST
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Global Operations across remote developing geographies, spanning 3 continents.
GUYANA
SURINAME
FRENCH GUIANA
SIERRA LEONE
LIBERIA
SENEGAL
EQ. GUINEA
CONGO
Business Regions
Europe, South America, Asia
North and West Africa
South and East Africa
London
Cape Town
Dublin Corporate Hubs
NORWAY
Reduce rework by minimising errors from infrequent Requistioners, Manage quality of requisition data input
Budget visibility in SAP
Delegation of Authority (DOA) authority applied for budget holder approvals to spend
Efficient approval process with full visibility Introduction of material & service master in requisition
Simplified low value purchasing process Introduction of p-card & blanket order buying options
Introduction of the Nominated Requisitioner Model
3 way matchIntroduction of service receipting
Increases early recognition, visibility and control of services spend
Increases early recognition, visibility & control of spend
Real time reporting of commitments compared to budgets
Greater budget holder control commitments against their budgets
Automated bank reconciliation clearing
No DoA approval required for three way matches
Automated partner billing
Commitments should only be raised against approved budgets
Invoice scanning
Reduced manual processing and
increased process time efficiency and accuracy
Automated interface to RBS, Citibank and Standard Chartered
Reduced manual processing and shift of AP from one of processor to monitoring and managing of exceptions
Reduced misstatements in Joint Venture books
reducing cost recovery exposure
warning messages
when budgets are consumed (e.g. when AFE
is 100% consumed)
JV module fully integrated with the Finance system
Ability to produce Venture specific audit support documentation
SAP Implementation
The Pathway Transformation Programme brings People, Process and Technology Change across Tullow
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Rising to the challenge – The Pathway Programme helped position us for future growth
Fit for purpose, timely and auditable end to end processes and ways of working
Accurate and timely information, allowing effective performance monitoring and decision making
Scalable Finance and Supply Chain system solutions to automate critical processes and allow value adding activities
Strong unified global team with capability to flexibly support the Business Units
For Finance & Supply Chain For our business
Applying the right level of process to drive efficiency and assurance
Providing the right information to help us manage the business and make the right decisions
One standardised and integrated system to support business growth
Clearer roles and responsibilities to empower our people and help them work more effectively
Process
Data
Systems
People7
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Requisition to Pay Process
Identification of Need
Raise Requisition
Budget Holder Approval
Purchase Order Raised by C&P
Receipt (either service or goods)
Invoice Arrives
Payment Run Review if Required
Check Against the PO Scan Invoice
If there is a mismatch thencheck with Supply Chain/Requisitioner
Finance
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Vendor Invoice Management – Benefits
Vendor Invoice Management (VIM) is a software solution used to manage invoice processing.
VIM aims to tackle inefficiencies in the business by reducing the manual keying of invoices into the Finance system and automating the process as much as possible.
VIM offers controlled and automated exceptions handling, ageing, escalation, and reporting, resulting in reduced cost of processing invoices.
Depending on classification, invoice exceptions are routed according to established business rules and policies. Workflow policies determine where invoices are routed and what approvals or next steps are required.
VIM integrates seamlessly with SAP and the majority of its functions are run through SAP itself.
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Vendor Invoice Management – Process Overview
YES
NO
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Vendor Invoice Management – Solution Overview
VIM
ICC
Archive Server
VIM – Vendor Invoice Management is where the invoice is first sent after scanning, and once validated in Invoice Capture Centre (ICC) , it comes back into VIM for further processing including exception checks and workflows.
Archive Server is the content repository where the Invoice scanned image is stored.
ICC – Invoice Capture Centre enables the use of Optical Character Recognition (OCR) technology to record details from the scanned invoice and then allows the user to validate/update these details.
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VIM Invoice Processing Flow
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VIM Invoice Scanning and Ingestion
• Received via email
• Received in the postIncoming Invoice
received
• Paper invoices received scanned and emailed to generic AP mailbox per location
Invoice scanned to Generic Accounts Payable mailbox
• Invoice received into SAP
• Automated processInvoice transferred to
SAP
• DP document created
• Invoice saved to the Archive Server
• Invoice sent to ICC for Character recognition and Validation
Invoice ingested into VIM
The first step in the VIM Invoice Processing flow is Scanning the invoice into VIM:
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VIM Invoice Processing Flow
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Invoice Recognition and Validation
Invoice Capture Centre (ICC) works in conjunction with VIM to completely automate the capture of data from paper invoices.
ICC uses optical character recognition (OCR) to extract invoice data and eliminate intervention in the invoice capture stage of AP processing.
• Extracts the essential invoice data (date, amount, PO number etc) from the scanned invoices.
• Uses a knowledge base that has been trained on samples of thousands of invoices from multiple countries around the world.
• Maps the read data – such as names, addresses, vendor numbers, purchase order numbers etc. – to SAP vendor master data and SAP purchase order data during analysis.
• ICC can be ‘trained’ to increase recognition on future invoices.
Field Recognition Logic
VendorVendor determination uses an extract of SAP vendor master data downloaded from the SAP system of the invoice receiving party.
Company Code
Company code determination uses the SAP extract of Company code names and Addresses
POnumber
PO Number is recognised only if they are in the valid range of SAP PO numbersExamples:
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VIM Invoice Processing Flow
Purchase Order Invoice Scenarios
Finance Invoices
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Invoice Processing
Invoice for Goods Purchase Order
Matched against Goods Receipt
Posted as 3 way match without any additional
approval
Invoice for Service Purchase Order – SES
relevant
Matched against Service Entry Sheet
Posted as 3 way match without any additional
approval
Invoice for Service Purchase Order – Non
SES
Sent for Verification to Requisitioner/Nominate
d Invoice verifier
Posted as 2 way match with invoice verification
Finance InvoiceSent for Approval to Budget Holder as per
DoAPosted with approval
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Invoice Reporting
VIM provides a standard suite of reports to help monitor and review invoices:
VIM Reports Description Role
VIM Analytics Report
Provides you with clear data reports on your documents with exceptions as well as the Invoice Exception workflows
AP Processor & AP Supervisor
Key Process Analytics
Reports about a variety of key figures regarding the VIM process: It shows the accumulated amounts of all documents in the DP workflow, in parked state and in posted state.
AP Supervisor
Productivity Report
Reports about the productivity of users/roles and the activities of users/roles.
AP Supervisor
Summary report
Provides a summary of all documents processed through VIM AP Processor & AP Supervisor
Aging Report Reports about the aging of documents and work items in the current system
AP Processor & AP Supervisor
Current Liability Report
This report is part of VIM Analytics, It offers you a clear data report on documents that are parked in the system
AP Processor & AP Supervisor
Exception Report
Reports all work items with exceptions, grouped by exception, company code or vendor
AP Processor & AP Supervisor
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Invoice Processing in VIM vs. SAP
The general rule is that all invoices are processed through VIM. However, exceptions exist:
The following invoices are processed through VIM:• Non-PO invoice• PO invoices• Only exceptions should be processed directly in SAP
Exceptions that need to be processed manually in SAP:• Non-PO Invoices which are loaded from
spreadsheet (Winshuttle) e.g. Employee expenses
• Emergency scenario invoices that can’t be processed through VIM (PO and non-PO)
• Down Payment Requests
VIM
Vendor invoice Management
Direct entry in SAP
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Why is Invoice Management important for Tullow?
Drive a uniform approach to invoice processing across all Tullow Oil locations.
Support an up front, “scan once” process.
Streamline invoice entry to SAP with the use of Optical Character Recognition (OCR) technology.
Deliver transparency of invoice processing through enhanced reporting and analytics.
Provide integrated SAP workflow to support Invoice Management and Resolution.
Efficient early approval process with full visibility of commitments, resulting in reduced manual processing time, increasing efficiency and accuracy.
Introduction of service receipting – Increases recognition, visibility and control of services spend.
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Questions?