Top 5 Mistakes Companies Make When Automating AP (and how to avoid them)

Presenter

Over 20 years experience in designing and implementing Accounts Payable automation solutionsHost of an AP educational Webinar seriesFrequent speaker at various AP tradeshows including PayStream Advisors, IAPP, IFM, and TAPN

Rob DeVincentVice President, Product MarketingCorcentric

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Agenda

Why AutomateTop 5 MistakesSummaryCOR360 Product DemoQ&A

WHY AUTOMATE AP

Why Automate AP

Enhance visibility and controls

Increase accuracy

Reduce invoice processing costs

92% lessBest-in-Class AP teams spendthan industry laggards to process a single invoice

Best-in-Class Laggard

20.8 Days to Process Invoices

3.8 Days to Process Invoices

Aberdeen Group

TOP 5 MISTAKES COMPANIES MAKE WHEN AUTOMATING AP

They fail to:Define AP Automation GoalsGain Top Down SupportNarrow Down the FocusEvaluate Solution OptionsAccurate Return on Investment (ROI)

Top 5 Mistakes Companies Make When Automating AP

MISTAKE 1: DEFINE AP AUTOMATION GOALS

Map your current payables processes, in and outside of AP

Does each step contribute to the bottom line?

Could touch points be removed or streamlined?

Preparing your AP Department for Automation

MISTAKE 2:GAIN TOP-DOWN SUPPORT

Gain Top-Down Support

Source: CFO survey

By the numbers:– 16.5% of CFO’s are unaware that there are AP

automation systems available to help manage accounts payable processes over the Cloud

– 64.1% believe it would be difficult to integrate the technology into their existing systems.

Gain Top Down Support

Find out what your CFO or management base decisions on (ROI, the business case, compliance, etc.)Define your business case:– Clearly define and document the

problem – Be ready to show how it solves

issues and tasks that distract the AP management from more important and strategic tasks

– Show how peers are achieving success (provide benchmarks, case studies, references, articles, etc.)

MISTAKE 3: NARROW FOCUS TO PAIN POINTS

Accounts Payable Innovation Lifecycle

A/P Innovation Lifecycle

Paper CheckEDI

P-Cards

B2B E-Payments

E-Procurement

Electronic Invoicing

Dynamic Discounting

OCR

Front-end Imaging& Workflow

Source: PayStream Advisors

MISTAKE 4: SOLUTION TYPES AND THEIR DIFFERENCES

Choose an Automation Provider

Select an AP automation provider by evaluating your requirementsEvaluate SaaS vs In House Narrow to a short list of providers (don’t forget to ask for references!)

Solution Options

In-house

• Customize your own

• Install software and maintain with internal IT

In-house

• Customize your own

• Install software and maintain with internal IT

Hosted / ASP

• 3rd party provider hosts and maintains your dedicated software

• Reduce IT maintenance

Hosted / ASP

• 3rd party provider hosts and maintains your dedicated software

• Reduce IT maintenance

Hybrid SaaS

• Delivered as a subscription service over the Internet

• Single tenant

• Packaged Solution

Hybrid SaaS

• Delivered as a subscription service over the Internet

• Single tenant

• Packaged Solution

True SaaS

• Delivered as a subscription service over the Internet

• Multi-tenant

• Configurable Solution

True SaaS

• Delivered as a subscription service over the Internet

• Multi-tenant

• Configurable Solution

Single vs. Multi-tenant

Single Tenant(On-premise)

Multi-Tenant(SaaS)

Code Base

Code Base

Code Base

Database Database Database

Code Base

Database

MISTAKE 5: ACCURATE RETURN ON INVESTMENT

Gathering ROI Data

Measure your current processing costs. To measure your ROI, you will need to capture the following:

• Document all touch points in the process• Estimate the average time per step• Estimate the average cost of the time based on the labor

performing the work• Estimate fixed costs such as document storage and retrieval,

destruction, etc.

It’s Not Just ROIIf your project promises an acceptable ROI, of course it will merit consideration

ROI alone will not net you the win

A CFO will evaluate the project based on key factors including:

• What factors do you base your return stream?

• What is the likelihood your projections are accurate?

Your CFO will want to know how your proposed solution will deliver more invoices worked per processor

“Soft costs” are a factor but will not win you the business case alone

ROI – Before Automation

 Costs $30,000 $3,000 $8,000 $10,000 $25,000 $2,700 $2,800 $7,000 $2,000 $90,500 $842,000 Total All

Other Potential Reductions (Annual Costs)Audit Recovery Fee SavingsCopy / Faxing  / Paper / Toner CostsCurrent Imaging / Storage CostsEmployee Hiring & Training

Office SuppliesOvernight Shipping Costs

Telephone ExpenseTotal Additional Costs

Management/Supervisor Involvement Time in Resolving Issues

Real Estate Costs (filing space / floor occupancy)

$7.02 PER INVOICE

FTE's RoleHardware Expense

TotalCost Per Document

Supervisors1 Manager $500  $109,500 2 Supervisor $1,000  $138,000 3 $1,500  $247,500 

Processors10 Processors $5,000  $420,000 2 Customer Service $1,000  $84,000 12 $6,000  $504,000 15 Total A/P $7,500  $751,500 

$80,000  $28,000  $1,000 $100,000  $35,000  $2,000 

Salary Benefits Software Licenses

$300,000  $105,000  $10,000 $60,000  $21,000  $2,000 

$180,000  $63,000  $3,000 

$540,000  $189,000  $15,000 $360,000  $126,000  $12,000 

ROI – After Automation

$4.44 PER INVOICE

Savings per Invoice: $2.58 $ Annual Savings: $309,500 % Annual Savings: 36.80%Initial Development: $20,000 AssumptionsManager Avg Salary $80,000 Supervisor Avg Salary: $50,000 Processor Avg Salary: $30,000 Benefit Rate: 35%Software Licensing: $1,000 Hardware Expense: $500 # of invoices per year: 120,000Average cost per Invoice  $1.20 

(Financial Systems /Microsoft, etc)(Computer / Network / Phone, etc)

FTE's Role Salary BenefitsSoftware Licenses

Hardware Expense

TotalCost Per Document

Supervisors1 Manager $80,000  $28,000  $1,000  $500  $109,500 1 Supervisor $50,000  $17,500  $1,000  $500  $69,000 2 $130,000  $45,500  $2,000  $1,000  $178,500 

Processors5 Processors $150,000  $52,500  $5,000  $2,500  $210,000 0 Customer Service $              ‐    $           ‐    $         ‐    $         ‐    $              ‐   

AP Workflow Automation  $              ‐     $           ‐     $         ‐     $         ‐    $144,000 5 $150,000  $52,500  $5,000  $2,500  $354,000 7 Total A/P $280,000  $98,000  $7,000  $3,500  $532,500 

ROI - 5 years

Initial

Year 1 Year 2 Year 3 Year 4 Year 5 TotalZeroTouch Savings: $309,500  $309,500  $309,500  $309,500  $309,500 Initial Development: ($20,000) $0  $0  $0  $0 Net Savings: $289,500  $309,500  $309,500  $309,500  $309,500  $1,527,500 

     After Initial Development 

Current Cost Per Invoice:Cost Per Invoice:Savings Per Invoice:$ Annual Savings:% Annual Savings:Initial Development: ($20,000)

$309,500 36.80%

$4.44 $2.58 

Summary Year 1$7.02 

AP Automation Solution Includes: ‐ Unlimited User Licensing‐ Complete Document Prep‐ Document Scanning‐ Document Primary Storage and Redundant Storage‐ Data Feeds from Financial Systems‐ Data Feeds to Financial Systems‐ Training and Support‐ Maintenance ‐ System Upgrades

SUMMARY

SummaryDefine your AP automation goals and use as your roadmap for successExecutive buy-in is critical to getting your AP project off the ground and to keep it on trackNarrow Focus to Pain Points Not every solution is created equally, be sure to understand the differences before you buyAccurate ROI to get CFO approval

ABOUT CORCENTRIC

PO Requisition

Electronic Invoice Network

Invoice OCR Capture & Extraction

Approval Workflow

Invoice Matching

ERP Integration

Payment & Remittance Mgmt

Cloud-based AP automation solutions

Corcentric is a leading provider of financial process automation solutions, specializing in Accounts Payable automation.

Corcentric compliments existing systems, while providing cutting-edge workflow efficiencies

Corcentric helps you transform your AP from a cost center to a strategic asset

About Corcentric

COR360 PRODUCT DEMO

PORequisitions

Approval Workflow

Automated Invoice

Matching

StraightThrough

Processing

Dashboard Reporting

Document Archive

Platform

Convert any invoice format into electronic data at the

Invoice Virtualization Center.

AP / ERP System

Send and receive invoices with direct integration through the Corcentric supplier network.

HOW INVOICES ARE SENT TO CORCENTRIC

Supplier Transformation

Suppliers

Invoice Virtualization Center

E-invoice

Invoicing Methods

Scan/Upload

E-invoices

MailE-Mail

Web Form

Fax

Intelligent Scanning

OCR Extract Data Validation

AP Workflow

Location Scanning

Online Indexing

Virtualization Options

Approval-based Workflow

Approved Invoice / AP Review

Electronic Interface

ERP / AP System

First Level Approval

Higher Level Approval

Purchase Order

Three Way Matching

No Human Intervention

Straight Through

Processing

To see a live demo of COR360, visit corcentric.com or call 703.962.9474