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Debra Johnson
Zappos Merchandising, Inc.
Accounts Payable Supervisor
AP Metrics
The power of metrics for positive change
About Zappos
Headquartered
in Downtown
Las Vegas
100% of items
inventoried. Over
9 million items in
FC’s
Zappos.com is a
service company
that happens to sell
shoes, clothing, etc.
Approximately
1,500
employees
Acquired by
Amazon in 2009
Over $1.0 Billion
revenue(2009) and
continues to grow
Made Fortune’s
100 Best Places
to work
Founded in
1999
Trade AP Landscape
Live on SAP Financials since 2007
SAP ECC 6.0
Interfaces (PIG)
Goods Receipts from Amazon Warehousing
Purchase orders from Zapporo (internally developed system)
Non-Trade AP Landscape
SAP ECC 6.0
Purchase orders from POiNT
Invoices processed through OpenText VIM (Vendor Invoice Management)
Accounts Payable Facts
Trade (Inventory related) Invoices
# Trade Invoice per year 250,000 – 300,000
% PO Based 100%
Received 90% via EDI 10% manual
Non-Trade Invoices
# Non-Trade Invoice per year 20,000 – 25,000
% PO Based 30%
Received 25% via EDI (not run thru OT)
75% via email, mail, fax
Headcount: 10 Trade AP; 3 Non-Trade AP
Centralized AP in Las Vegas, NV
Non-trade AP Business Challenges
No streamlined AP workflow
process
Challenging support
environment
Risk of late payments
Inefficient manual invoice
approval and entry process
Invoice visibility for AP
Difficult audit process
Too much paper
Trade AP Business Challenges
Reduce number of paper
checks (ACH)
Challenging support
environment
Risk of late payments
Invoice visibility for AP
Difficult audit process
Too much paper
(EDI)
Early payment process
8
Trade Metrics Total Number of Invoices
Open aging per rep per week Processed by system vs rep Over 30 days Posted by each rep per month Per week per rep Received on paper per week per rep
Number of Active vendors with product per week Statements reconciled per week Vendors using portal
Breakdown of payment types: ACH, check, etc. Aging Gross Receipts without invoices Year over year comparison Early Payment Discounts
9
Non-Trade Metrics
Total Number of Invoices Processed Non-PO PO
Number of Days to approve an invoice Days to approve a Purchase Order
Breakdown of payment types: ACH, check, etc. Percentage of invoices paid on time
10
Vendor Payments
Goal Reduce number of check payments
Metric Breakdown of Payment Types
Tools
Switch to ACH Switch to Credit Card
11
Vendor Portal SaaS
Goal Offer online self-help portal for vendors to reduce AP calls and promote early payment discounts
Metric Number invoices over 30 days Number of vendors using portal Early Payment Discounts
Tools On-line SaaS vendor portal
12
Working invoices 30 days
Goal Process all invoices over 30 days
Metric Invoice 30 days Aging # of invoices still open per rep for
the week
Tools Unpaid parked log
13
GR/IR
Goal Identify missing invoices and clear receipts that were manually paid
Metric Aging gross receipts without Invoices
Tools Aging gross receipts without Invoices
14
Statements
Goal Ensure statements are reconciled and we are taking care of our vendors
Metric
Number of statements reconciled per
week by rep
Tools
Verify all invoices Clears GR/IR Identify manual payments Clear up chargebacks reconciliation
15
Work closely with SAP team
Goal Systematic changes to improve matching and reduce AP touches
Metric
Number of invoices processed by system vs rep
Number of invoices posted by each rep for the month
Tools SAP
16
EDI
Goal Reduce number of paper invoices
Metric How many paper invoices per rep by
week/manual process
Tools EDI
17
Rep Workload
Goal Ensure any one rep is NOT overloaded
Metric How many new invoices per week by rep
Number of active vendors with product per week
Tools Reports
18
Invoice Payments
Goal Ensure invoices are being paid on time
Metric Percentage of invoice paid on time
Tools Internally built dashboard