Electronic Invoice Management - GXS€¦ · Electronic Invoice Management Going with the (Work)flow Barriers to eInvoice Adoption Making a Case for Automation Usage of AP Automation

Featuring Insights on ...Q4 2012

Underwritten in part by

ADP

Ariba

Bank of America Merrill Lynch

Basware

Direct Commerce

GXS

U.S. Bank

Electronic Invoice ManagementGoing with the (Work)flow

Barriers to eInvoice Adoption

Making a Case for Automation

Usage of AP Automation

Challenges in Current AP Operations

Factors Driving AP Automation Interest

AP Outsourcing Providers & Case Studies

© 2012 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]

Executive Summary ......................................................................................................1

Move to the Middle ......................................................................................................2

And Now, the Numbers . . . ........................................................................................4

Making a Case for Automation .................................................................................6

Overcoming Barriers to Adoption ...........................................................................12

ADP ....................................................................................................................................14

Ariba ..................................................................................................................................17

Ariba Case Study ............................................................................................................21

Bank of America Merrill Lynch ..................................................................................23

Basware .............................................................................................................................27

Direct Commerce .........................................................................................................31

Direct Commerce Case Study ..................................................................................34

GXS ....................................................................................................................................36

U.S. Bank ...........................................................................................................................39

Conclusion .......................................................................................................................43

Research Methodology............................................................................................... 44

About PayStream Advisors.........................................................................................44

Table of Contents


Executive SummaryAlthough PayStream Technology Insight reports are grounded in statistics, it is often what we see and hear in product demonstrations that gives us a sense of the market at ground level. Last year, this “chatter” was all about The Cloud and supplier recruitment. In 2012, we saw more streamlined navigation, more integrated workflow automation, and heard about mobile applications for smart phones and tablets, offering a range of functionality from notifications to simple transactional capabilities.

Adoption has been of keen interest among an elite group of suppliers, and innovations like Software as a Service (SaaS), fee-free supplier portals, dynamic discounting, and mobile transactional capabilities, are opening up the middle market. But we still have a long way to go.

Consider that there are, say, 15 million businesses, in the United States alone, transacting business with other businesses (B2B), and only 700,000 of those companies are sending invoices electronically. And that’s using the term “electronic” loosely – about half of those electronic invoices are electronic paper – static scans that must still be converted to data and assimilated into an electronic workflow.

That said, there does seem to be a growing acceptance within the industry that eInvoicing is not an end in itself, but rather part of a process and a culture involving integrated accounting systems, workflow, communications and supplier management.

Earlier this year, PayStream Advisors documented these trends in the “eInvoicing Adoption Benchmarking Report 2012,” based on the responses of more than 300 AP and procurement professionals at U.S.-based enterprises. Subsequent research has followed the trend through the supply chain and found that it holds true from purchase to pay. This report elaborates on those findings by putting them in a broader context.

PayStream Advisors has developed this Technology Insight Series report titled “Electronic Invoice Management: Going with the (Work)flow,” for organizations with an active interest in eInvoicing who would benefit from an in-depth analysis of recent trends and solutions, plus profiles of leading solution providers.

Electronic Invoice Management is one of several reports available for download from our corporate research library at: http://www.paystreamadvisors.com/eResearch/

http://www.paystreamadvisors.com/eResearch/

http://www.paystreamadvisors.com/eResearch/


Move to the Middle“Companies with revenues over USD $2 billion (“Titans”) have largely automated . . . The good news: Titans only represent 10 percent of the invoice volume to be automated.”

– Henry Ijams, Managing Director of PayStream Advisors

– PayStream Advisors Market Update and Research Preview, Oct. 23, 2012

After more than a decade of market excitement about the coming electronic future, only now are we beginning to move from the long tail of large early adopters into the fat middle market of small and medium-sized enterprises (SME). And, as we reported in last year’s report “Electronic Invoice Management: The Cloud’s Silver Lining,” the future looks much different than the past.

Cloud payments, measured at $4.7 billion in 2011, are forecasted to more than double over the next four years, as the buyers and vendors of the middle market increasingly find common ground in the fast, flexible, affordable and mobile internet future.

The technology has been proven. The results of the larger companies are there for all to see. The challenge now is to replicate those results across a broader spectrum of companies with cultures and processes that become increasingly ad hoc as you move down the revenue range.

Figure 1

Adoption of Imaging and Workflow Technologies

by Company Size

While large companies lead the pack in

automation, small companies are quick

to embrace automated workflow.

62%

51%

23%

27%

17% 15%

59%

46%

32%

Front-End Imaging Back-End Imaging Automated Workflow

Large Medium Small


Integration, more than new functionality – with the possible exception of mobile applications – is the order of the day. If an invoice comes in electronically without a system in place to route it through accounts payable, you’re really not much better off than you were with a paper invoice. As the saying goes: It’s not what you do, it’s how you do it that counts. This convergence of eInvoicing with Workflow Automation is the story of 2012.


And Now, the Numbers . . . Any discussion of adoption, logically begins with a look at what we are up against, and while resistance, overall, is decreasing, the barriers themselves remain, proportionally the same, with supplier resistance, the perennial favorite, still on top, followed by the persistent belief that the old ways work best, and, as always, the “We can’t afford it,” argument. It should not be surprising then, to see solution providers focusing aggressively on supplier recruitment and affordable Software-as-a-Service delivery models.

This adaptability seems to be paying dividends as more than 70 percent of companies surveyed have either adopted or are evaluating eInvoicing technology – up 3 percentage points from 2011.

Figure 2

Barriers to eInvoice Adoption

2012 survey results reveal that supplier resistance is the number one challenge

to electronic invoice adoption.

16%Lack of Budget

15%We do not think therewill be an ROI

6%Lack of understanding ofcurrent available solutions

18%Lack of resources tomanage automation

25%Supplier resistance

20%Current processes work


Figure 3

Adoption of eInvoicing Solutions

Over 70 percent of companies surveyed have

either adopted or are evaluating eInvoicing

technology.

29%

We do not use an e-invoicing solution and have no plans to implement one

42%

We are evaluating the usage of a solution

8%

We are currentlydeploying such a solution and will golive within the next6 months

We are currentlyusing such a solution

21%


Making a Case for Automation

Culture is Critical

With the possible exception of archiving, a static electronic invoice isn’t much better than a paper one. The real value of eInvoicing lies in how successful you are at assimilating invoice data into accounting systems and management workflows. It is this culture of integration that will yield the best return on investment.

More than 80 percent of the companies surveyed by PayStream Advisors over the past year responded they have adopted an imaging solution, or are considering purchasing one.

Figure 4

Adoption of Workflow Technologies

More than 80 percent of the companies

surveyed by PayStream Advisors over the

past year responded they have adopted an

imaging solution, or are considering purchasing

one.

2011 2012

35%

37%

We currently use an approval workflow

solution

16%

9%

We are currently deploying an

approval workflow solution and will go

live in the next 6 months

34%

27%

We are considering implementing an

approval workflow solution

15%

27%

We do not have a workflow solution and

have no plans to implement one


The volume of paper invoices received is also decreasing – dropping from more than three quarters to just a little under two thirds of total invoices, in the past year alone.

Figure 5

Usage of AP Automation Technologies

ePayment and P-Cards continue to hold the

lead in AP automation technologies.

Using Implementing In 6 Months

56%

24%

Front-endImaging

37%30%

OCR/AutomatedData Capture

53%

27%

AutomatedWorkflow

83%

17%

ElectronicPayments

PurchasingCards

16%

84%

Figure 6

Methods Used to Trade B2B Invoices

Paper invoices are decreasing; however, they continue to lead the pack in methods used to trade

B2B invoices.

13%

Email

6%

Fax

22%

eInvoice/Portals/EDI Paper

59%


Historically, the move from paper to electronic invoicing has been driven by the accuracy and efficiency of workflow achieved by eliminating manual data entry and the time-consuming routing of hard-copy invoices for approval. The current wave of automation, however, is being driven by a variety of factors. More than half of companies that adopted eInvoicing solutions cited a reduction in full time employee (FTE) or processing costs and faster approval cycles as key system benefits, along with a broader application of eInvoicing solutions as management information tools to provide greater visibility into spending, improved cash management, and an increased ability to capitalize on early-payment discounts.

Challenges Faced in Current AP Operations

PayStream’s “Invoice Automation Adoption Survey 2012” documented the challenges that current AP operations face. The good news is that significant progress is being made. The first step toward improving a process is understanding the faults and failures of the current system. But as the following graph illustrates, much remains to be done.

Factors Driving Interest in Automation

As accounts payable departments become more centralized, companies are reaping the benefits of stronger trading relationships, dynamic discounting, risk-

Figure 7

Challenges in the Invoice Management Process

2011 2012

65%

52%

17%

16%

18%

14%

43%

40%

13%

11%

24%

19%

16%

15%

Majority of invoicesreceived in paper

format

Decentralizedinvoice receipt

Lost or Missinginvoices

Manual data entryand inefficient

processes

Lack of visibilityinto outstanding

liabilities

High number ofdiscrepancies and

exceptions

Inability to approveinvoices in time tocapture discounts


management and cash management. Automation solutions that enable trading partners – buyers, suppliers and banks – to seamlessly exchange transaction-related information and funds are becoming increasingly popular. Specific factors driving interest in automation include:

» A competitive business environment is forcing businesses, especially small and medium-sized ones, to focus on reducing processing costs and increase efficiencies associated with invoices and employee expenses.

» Streamlining the AP process has become vital in a tough economy where adequate cash flow and greater control over payables are critical to maintaining liquidity and sustaining business operations.

» Increased interest in early payment discount capture drives smaller organizations in particular to investigate tools and technologies that enable them to compress their invoice receipt-to-approval cycles.

Buyer Benefits of AP Automation

Buyers, particularly small and medium-sized companies, are responding to the low upfront costs, minimal IT commitment, enhanced reporting and cash management services offered by Cloud-based solutions. It’s true that for some companies, the Cloud isn’t always an option. In particular, some larger companies and governmental entities have policies requiring onsite hosting and/or staff-managed solutions. Still, regardless of platform, PayStream Advisors’ 2012 Automated

Figure 8

Top Financial Automation Goals for

2012

Automated approval workflow and eInvoicing

are the top two automation goals for

2012.

14%

8%

2%

28%

19%

29%

Increase electronicinvoicing

Implement invoiceimaging

Automated approvalworkflow for Invoices

Automate paymentprocessing

ERP application upgrade

Outsource portionsof AP process


Workflow Adoption Survey provides results that make a compelling case for AP Automation:

» 75 percent of all adopters reported shorter invoice approval cycles

» 58 percent experienced lower processing costs

» 50 percent increased employee productivity

» 33 percent of adopters surveyed had used automation to improve visibility over liabilities

» 20 percent reported a reduction in late payment penalties and interest

» 14 percent reported an improvement in regulatory compliance

These results are consistent with previous years although most categories show a slight increase. The survey demonstrates a trend toward businesses using AP Automation as a business information and cash management tool and not just a means to reduce head count.

Supplier Value Proposition of AP Automation

Suppliers, too, seem to be rallying behind recent value-added services, such as supplier networks, dynamic discounting, purchase order to invoice flips, and low to no-fee supplier transaction costs. Suppliers who have adopted electronic invoicing have reaped a number of tangible benefits:

Figure 9

Benefits of Approval Workflow

Quicker approval cycles ranks as the top benefit

to approval workflow.

58%

20%

14%

75%

50%

33%

Quicker approval of invoices

Increased employee productivity

Improved visibility over liabilities

Lower processing costs

Reduction in late payment penalties and interest

Better compliance with regulatory requirements

(SOX, FASB)


» Increased Efficiencies: Significant time is saved when employees do not have to print paper invoices and mail them to their customers, freeing up accounts receivable staff to focus on more value-added activities like collections and customer relations.

» Lower Costs: Reduction in labor, material and postage costs are common with all eInvoicing solutions. Our research reveals that suppliers who adopt electronic invoicing can slash their invoice management costs by more than 50 percent.

» Error Reduction: Validation rules configured into eInvoicing solutions flag errors at the time of submission itself and prompt suppliers to correct them, reducing the number of exception invoices downstream.

» Faster Settlement: Electronic invoicing shortens the invoice processing and approval cycle on the buyer side. Combined with electronic payments, this ensures that suppliers are paid on time, or in some cases, early.

» Improved Visibility: Suppliers have real-time access to invoice and payment status from a standard Web browser, providing for quicker handling of reconciliation questions and fewer help desk calls.

» Better Cash flow Forecasting: Automating invoice processing and payments reduces uncertainties. Consistency around payment timing means suppliers can better perform cash flow forecasting.

» Eliminate Reprint Requests: Electronic invoicing solutions drastically reduce the number of lost and missing invoices, which means reprint requests from buyers will virtually be zero.

» Quicker Dispute Resolution: Suppliers now can view disputed invoices at any time and provide supporting/backup documentation as needed, making dispute resolution a collaborative process as well as accelerating resolution.

» Decreased Days Sales Outstanding: Dynamic discounting and supply chain finance capabilities available as part of eInvoicing solutions allow suppliers to decrease days sales outstanding (DSO) without adversely affecting customer relations.

» Access to Cheaper Capital: Dynamic discounting delivers financing at more attractive rates to suppliers than factoring or asset based lending.


Overcoming Barriers to AdoptionDespite the steady increase in the number of companies adopting electronic invoicing, paper invoices remain the primary method of B2B billing in the United States, see Figure 6. Barriers to adoption today remain the same as they’ve always been. Here’s where things stand.

Supplier Resistance

Although eInvoicing expedites payments, the very prospect can raise the hackles of suppliers who are content with their paper-based system and not of a mind to change. Twenty-three percent of survey responders cited their belief that “current processes work” as the main reason for avoiding eInvoicing. It can be difficult to overcome resistance from suppliers who believe the saying, “if it isn’t broke, don’t fix it.” In this case, the buyer’s success depends upon demonstrating to their supplier a compelling value proposition.

Suppliers want to know “what’s in it for them.” Buyers need to have a compelling answer. Suppliers will respond positively to evidence that participating in a cloud-based eInvoicing solution will result in accelerated payments, new business referrals, enhanced reporting, financing opportunities, and improved cash management. Supplier recruitment also requires an ongoing effort. The steady growth of supplier participation demonstrates the positive results of persistence.

Technical Challenges

This was once a formidable obstacle. Today, however, the challenge of integrating new applications with legacy systems is becoming less daunting. Most applications on the market today integrate easily with systems on buyer and supplier sides, resulting in secure and seamless data transfer, as well as streamlined processes and more efficient workflows. This trend should accelerate as companies replace older legacy systems with modern architecture, and adopters realize the benefits of faster approval and cycle times, better cash flow forecasting and vendor relations.

For those companies concerned with the upfront costs of technology, hosted solutions and Software-as-Service (SaaS) delivery models offer minimal implementation costs. The technology providers are responsible for maintenance and upgrades.

Business Practices

Old habits die hard. It’s human nature. That’s especially true in business, where change usually means learning new skills, spending more money, and training. Giving up the old ways is hard enough when change is driven by your own business practices. It can be even more challenging when the change is driven by outside factors. Solution providers have made great strides in recent years addressing this barrier to adoption,


making it easier for suppliers to transact compared to legacy EDI solutions – including supplier portals to manage transactions and track their status, and providing vendor support services that encourage adoption and minimize disruption.

Today, simply allowing vendors to submit electronic invoices by returning or “flipping” purchase orders as invoices has gone a long way toward breaking down supplier resistance.

External Change Begins with Internal Change

In negotiating it is often easier to get what you want when you offer something of value in return. Flippable purchase orders – the electronic equivalent of business reply mail – are a good start. With more than 32 percent of survey respondents indicating that they send more than half of their purchase orders electronically to suppliers, having the ability for suppliers to simply turn those purchase orders around into error-free invoices with the promise of straight-through processing — read that: lower processing costs, faster payment, and fewer invoice errors – is proving to be a major persuader. And, of course, once the transaction has gone electronic, it opens the door for powerful back-end benefits, such as dynamic discounting, a valuable source of liquidity, especially for small and mid-sized suppliers.


ADP Founded in 1949, Automated Data Processing Inc. is one of the world’s largest business process outsourcing companies offering a wide range of accounts payable, Human Resources, payroll, tax and benefits administration solutions from a single source. With nearly $10 billion in revenue and over 600,000 clients in 60 countries, ADP employs more than 54,000 associates worldwide.

ADP Procure-to-Pay Solutions (ADP P2P) automates the entire payables process from purchase order transmission and electronic invoicing to approval workflow and payments processing. More than 50,000 users in over 50 countries use it to process more than 10 million transactions and $120 billion in spend annually.

Website http://www.adp.com/p2p/Founded 1949Headquarters Roseland, NJOther Locations 50 + countries around the worldEmployees 54,000End Users (ADP P2P) >50,000Annual Transaction Volume

>10 million transactions, >$120 billion in annual spend

Industry Segments ADP P2P is used across a range of industry segments including oil & gas, retail, financial services, wholesale, real estate, manufacturing and many more.

Key Accounts Client confidentiality does not allow ADP P2P to disclose client names.

Awards / Recognitions » One of four non-financial U.S. companies to receive a AAA credit rating from S & P and Moody’s

» Ranked #1 on Fortune’s list of Most Admired Companies 2011

» Forbes magazine’s list of The World’s Most Innovative Companies

» IDG’s Computerworld 2011 list of Best Places to Work in Information Technology

Solution Overview

ADP Procure-to-Pay Solutions is delivered as a cloud-based Software-as-a-Service offering, which is fully hosted and supported by ADP P2P and seamlessly integrates into clients’ ERP/accounting/back-end financial systems with no hardware or software installation requirement. ADP P2P also offers other business process outsourcing services including invoice scanning and indexing to create a completely paper-free payables environment for clients.

http://www.adp.com/p2p/


Supplier Recruitment

ADP offers active supplier recruitment support. ADP P2P works with clients to analyze their suppliers and segment them to identify the suppliers that need to be on-boarded on the network. ADP P2P offers a comprehensive range of supplier enablement services including vendor analysis, activation campaigns, supplier outreach, training, and supplier self-registration. The ADP P2P supplier network currently supports thousands of suppliers from mom-and-pop establishments to multi-national corporations, making it easy for clients to migrate from paper to electronic invoices.

Electronic Invoicing

ADP P2P offers suppliers numerous ways to submit invoices. Large volume suppliers can leverage a hands-free B2B integration to submit invoices, while smaller volume suppliers can log into the portal to upload invoice files, flip purchase orders into invoices or key in invoices in the portal. Although 90 percent of the invoices that move through the solution are electronic, ADP P2P also supports suppliers that continue to send paper invoices through its outsourced scanning and data capture offering.

Approval Workflow

Workflow capabilities include automated routing, flexible approval chains and line-item level dispute resolution integrated with the clients’ accounts payable systems. Color-coded alert flags notify users of any discrepancies – allowing for swifter and more efficient dispute resolution. That simplifies document management and increases the number of transactions processed without manual intervention.

A unique offering of the P2P application is its wide range of configurable business rules and new, advanced coding procedures based on historical data. This key differentiator enables automated coding of invoices based on invoice attributes and how a similar invoice was coded the last time it was approved. This enables clients to allow the system to handle routine tasks, while focusing on the exceptions.

Electronic Payments

ADP Payments integrates seamlessly with financial and accounting systems and delivers the flexibility of paying approved invoices either via check or electronic methods. Buyers and suppliers have an easy and intuitive interface for maintaining their information within the system, including banking details. Buyers have multiple options for specifying payment terms and schedules, as well as the ability to configure parameters to specific suppliers. Once invoices are approved, ADP Payments automatically creates and schedules payments according to pre-defined supplier payment terms and supplier-selected payment methods.


Reporting and Analytics

The platform offers multiple prepackaged reports that range from line-item and supplier-level spend analysis to administrative reports that track history, efficiency and status. Standard reports cover areas such as spend analysis reporting, invoice administration, and scanned invoices reporting. All reports run asynchronously, which enables the user to continue processing invoices and working within the system while the report is running.

ADP P2P also offers a powerful ad hoc query tool that allows the client to build a report for any field captured on an invoice. Reports can output in a print friendly PDF format or download in a spreadsheet format. In addition, all report data can be easily exported to third party reporting tools like Crystal Reports, for further analysis.

Pricing and Implementation

Because ADP P2P offers a broad range of scalable modules and configurations, implementation can take anywhere from a few weeks to a few months. The most important factor determining the length of time to implement the system is often the client’s availability of internal planning and integration resources. ADP P2P charges an upfront implementation fee and an annual subscription fee based on the number of transactions processed. The more transactions processed through the solution, the lower the average transaction price. After implementation, ADP P2P supports clients via an experienced team that offers support to both clients and suppliers 24x7x365 via phone, e-mail, online, and onsite (if required).


Ariba Ariba, an SAP company, is the world’s business commerce network. Ariba combines industry-leading cloud-based applications with the world’s largest web-based trading community to help companies discover and collaborate with a global network of partners. Using the Ariba® Network, businesses of all sizes can connect to their trading partners anywhere, at any time from any application or device to buy, sell and manage their cash more efficiently and effectively than ever before. Companies around the world use the Ariba Network to simplify inter-enterprise commerce and enhance the results that they deliver.

Ariba Collaborative Finance Solutions cover the Procure-to-Pay process, from smart invoicing and paper invoice conversion to integrated electronic payment, working capital management, and supplier enablement program management. These solutions and services enable global e-invoicing in more than 70 currencies, as well as digital signature authentication, VAT/tax compliance, and data archiving.

Website www.ariba.comFounded 1996Headquarters Sunnyvale, CAOther Locations 40 offices in 21 countries, including

North and South America, Europe, Asia/Pacific and Australia

Employees 2,432Revenues ~$500M for FY 2012Customers 800,000 + trading partnersEnd Users ~5 millionAnnual Transaction Volume >$320 billion + Industry Segments Consumer goods, distribution, financial

services, healthcare and pharmaceutical, manufacturing, oil and gas, public sector, publishing, retail, services, telecom, utilities, among others.

Key Accounts Key clients are market leaders in our target verticals. A small sample includes AstraZeneca, Bank of America, Entergy, GlaxoSmithKline.

Awards / Recognitions Technology Excellence Awards: Leading P2P Technology – 2012, PayStream Advisors; Best e-Procurement Solution – 2012.


Partners / Resellers IBM, ScanOne, Logica, TrustWeaver, Hubspan, and Microsoft. BPO providers Genpact, WNS and Accenture. Bank reseller Wells Fargo. The Receivables Exchange for receivables financing.

Solution Overview

Ariba Collaborative Finance Solutions Suite provides full-circle functionality from supplier enablement and electronic purchase order (PO) delivery to electronic processing of PO and non-PO invoices, electronic payments, and dynamic payables discounting. Ariba’s solutions are cloud based and scale to accommodate any customer requirements, including global companies with many different systems, myriad document types, thousands of suppliers, billions of dollars in annual spend, and support for many different currencies. Ariba offers comprehensive and flexible integration, including support for Oracle Fusion Middleware, SAP NetWeaver, Dell Boomi Atoms for connecting to 60+ Finance Packages and other middleware that connects back office systems to the Ariba Network and subsequently all participating suppliers.

Supplier Enablement

Ariba has made supplier enablement a top priority, with more than 400+ professionals involved in the supplier enablement process. The Ariba supplier enablement team brings more than a decade of best practice experience to help organizations develop a supplier enablement strategy that accelerates their transition to electronic invoice processing and maximize their return on investment. Ariba specialists work with suppliers of all sizes and technical limitations, including global suppliers with varying language, currency, culture, and technology needs.

With Ariba, select organizations can leverage a quick enablement approach that initiates supplier enablement through transactions like purchase orders, invoices, or payment status documents (remittance advice) on the Ariba Network. The quick enablement process can accelerate the enablement process by reaching out to suppliers—especially low-volume suppliers—at the best time and with the right message for electronic enablement.

Self-service tools in the Ariba Network allow even the smallest suppliers to collaborate online for invoice management via email, fax, PO-Flip®, or digital integration via cXML and Electronic Data Interchange (EDI) Through a buyer portal, organizations have complete dashboard visibility to the enablement status of each supplier, so they can identify any tasks or activities that require escalation to meet their enablement goals.

Once on the Ariba Network, suppliers benefit from a supplier portal, where they can receive electronic POs; submit order confirmations, advance ship notices, electronic invoices and other documents; quickly correct and resubmit invoices with errors; get payment status; enable dynamic discounting; and more.


The success of Ariba’s efforts is demonstrated by the steady growth of the Ariba Network to more than 800,000 vendors.


Ariba smart invoicing enables the system to catch invoice errors based on user-configurable business rules that perform real-time invoice validation at the header and line detail levels, and perform other valuable capabilities such as automated account coding and contract matching.

These advanced invoice validation capabilities are responsible for Ariba clients experiencing 98+ percent touchless invoice processing, and for suppliers having, on average, 6 days’ shorter Days Sales Outstanding (DSO). In addition to e-invoice submission from suppliers, Ariba’s Invoice Conversion Services allow organizations to convert paper invoices to an electronic format for smart invoice processing and thereby achieve 100 percent paperless invoice processing.

To expedite global e-invoicing rollouts, Ariba allows users to configure business rules at the country level and apply them to country-specific e-invoice templates. These rules provide valuable support for VAT and other indirect tax methods and for legal regulations governing the invoice process. Business rules are based upon Ariba best practices and expert tax research into e-invoicing legislation by country relating to domestic, cross-border, and intra-EU trade. In addition, Ariba publishes Tax Compliance Country Guides for more than 36 countries in North America, EMEA and Asia-Pacific to further assist buyers and suppliers in deploying a compliant e-invoicing solution. Ariba also offers an e-Archive Service, powered by Logica, that helps organizations address the e-archiving requirements of the European Union.

Approval Workflow

Ariba Invoice Professional is a workflow solution designed for accounts payable that features best-practice templates, so organizations can apply out-of-the-box workflows to manage invoice approvals, facilitate matching of invoices to POs and goods receipt, and enable invoicing off contracts. Ariba workflow supports remote and line-level invoice approvals and complex workflow configurations such as invoices with multiple accounts and different line items requiring approvals from different groups. Rule configuration and testing is integrated into the application, eliminating any need to contact IT for set up and support. And with Ariba’s comprehensive workflow reporting, organizations can effectively monitor their invoice approval process across many dimensions.

Working Capital Management

Ariba working capital management solutions allow organizations to accelerate payments on approved invoices to key suppliers in return for a discount. Buyers earn an immediate return on their cash, and their trading partners can use that cash to fund their daily business needs and ensure that they can meet a customer’s ongoing


demands.

With Ariba’s approach, buyers and sellers have all of the tools necessary to fully automate the process of offering, negotiating, and agreeing on early payment terms. Buyers can capture discounts at any point between invoice approval and the net due date and automatically present offers to lock them in. Suppliers can automatically accept offers or control the acceleration of payment on an ad-hoc basis according to their needs. To accelerate results, Ariba offers a “rapid ramp” methodology for promoting early payment discount offers to suppliers, effectively driving them from paper invoices and paper checks to e-invoicing and electronic payments. With this program, one customer identified close to $1 million in early payment discount savings in weeks.

Ariba’s collaborative finance approach helps suppliers get early payment at much lower rates than traditional market resources without incurring debt—and provides greater leverage for buyers to extend payment terms or negotiate reduced prices.

Electronic Payments

The Ariba e-invoicing solution supports global payments in over 70 currencies via automated clearinghouse (ACH), or purchasing cards. Standard middleware integration allows Ariba’s solution to integrate with leading back office systems to facilitate posting of transactions to accounts payable (AP), accounts receivable (AR), and general ledger (GL) systems. Another strength of the Ariba solution is its ability to deliver remittance information to suppliers in their preferred formats. While traditional ACH remittance detail is at an aggregate level, Ariba offers line-level detail remittance statements, which make it easier for suppliers to match payments to sales.


Ariba offers a robust reporting functionality that includes operational, analytical, and extensive search capabilities. Ad hoc reporting allows users to prioritize invoice processing to maximize discount savings potential. Users can manipulate the data to meet their specific needs through an intuitive pivot table and drag-and-drop interface. Ariba also allows data export to third-party reporting tools such as Crystal Reports for further analysis.


Ariba’s modular design allows customers to implement solutions by function, or as a complete suite to match customer objectives. Implementation timelines vary depending upon the other Ariba solutions that may be a part of the scope, but are generally 12-18 weeks. Pricing includes annual and subscription fees, and include user support and training as key deliverables of every Ariba solution, as well as round-the-clock support from response centers in North America, Europe and Asia Pacific regions. The customer report portal, Ariba Connect, has been recognized as one of the “Ten Best Web Support Sites” by the Association of Support Professionals.


Ariba Case Study

GlaxoSmithKline

GlaxoSmithKline, the world’s third largest pharmaceutical company, manages its accounts payable (AP) operations through a Shared Financial Services group, which delivers services to 95 percent of GSK businesses in North America. As an early adopter of EDI, GSK was able to convert its large suppliers to an e-invoicing process but that still left nearly 50 percent of its invoice volume on paper.

Extending EDI coverage to the bulk of its suppliers, and integrating EDI with its existing ERP system, were cost prohibitive. As a result, GSK faced excessively high invoice processing costs for paper invoices, along with longer cycle times and on-time payment challenges. GSK sought a more efficient and effective invoice process that would lower processing costs, reach more suppliers, and enforce PO compliance.

Key issue for GSK: How can we effectively transition suppliers submitting paper invoices to an electronic invoice process, and ensure compliance by driving more purchases off POs?

Solution

GSK realized that e-invoicing was the key to driving down the costs of processing paper invoices and enabling collaboration with thousands of suppliers. It became a strategic initiative, and GSK outlined the following objectives for the program

» Embrace an electronic process that would enable real-time supplier collaboration

» Expand use of purchase orders to enforce compliance and better manage spend

» Extend the value of its ERP system

GSK chose Ariba’s e-invoicing solution and integration with the Ariba Network to deliver the next wave of corporate finance transformation.

Benefits

In less than a year, GSK enrolled more than 1,800 suppliers for electronic invoicing and today there are more than 2,300 GSK suppliers on the Ariba Network. The Ariba Network match helped to rapidly on-boarding these suppliers, as close to 60 percent of GSK’s list of targeted vendors were already participating on the network.

One factor driving these suppliers to an electronic process was the flexible invoice submission options. They include the PO-Flip® service


option, where suppliers receiving an electronic purchase order from GSK can, with a few keystrokes, “flip” the PO into a pre-validated electronic invoice that is sent back to GSK for touchless processing. “Ensuring PO compliance on the front end makes the back end of invoicing that much simpler,” said Al Barbee, director, North America Shared Financial Services, GSK.

Suppliers also benefit from a self-service portal offering real-time visibility into invoice and payment status, which isn’t available to GSK suppliers transacting via a legacy EDI solutions. The supplier portal has contributed to a reduction in invoice status phone calls to GSK by 30 percent. “It’s easy for suppliers on the Ariba Network to go online and see the exact status of their invoices at any time,” said Al Barbee. “You would be surprised at how many calls actually go away.”

For GSK, the ability to configure business rules – the key to smart invoicing – enables automatic validation of invoices. Invoices that don’t pass the validation rules are returned to suppliers for correction and re-submission, eliminating a time-consuming task that had been managed by AP.

Streamlining the invoice process also has a dramatic positive impact on cash management. With an invoice approval cycle of seven days and falling, GSK can take advantage of many more early payment discounts. In addition e-invoicing with Ariba was a major contributor to GSK achieving a 20 percent savings goal in its Shared Financial Services group.

Motivated by its first-year results, GSK is planning to roll out e-invoicing to other divisions within the Shared Financial Services group. And, since Ariba offers a more flexible, lower cost e-invoicing option than EDI, GSK will expand the Ariba solution as existing legacy EDI suppliers drop off.

Reaping the Rewards

Within a year of its e-invoicing implementation, GSK achieved the following results:

» 60% reduction in invoice processing costs

» 90% reduction in time to receive invoices (21 days to 2 days)

» 85% invoice volumes managed electronically

» 94% on-time payment performance (from 70%), with goal in the upper 90% range


Bank of America Merrill LynchBank of America Merrill Lynch is a leading provider of payment, invoicing, commercial card, and prepaid card solutions to large and middle market companies, globally, and to federal, state and local government entities in the United States. Bank of America Merrill Lynch works with these organizations to design integrated invoicing and ePayments solutions that help unlock working capital while increasing efficiency, visibility and control.

As part of the Global Treasury Solutions business, the Commercial Card organization develops strategies and solutions that are closely aligned to the treasury goals of commercial and government entities. Bank of America Merrill Lynch cardholders can be served in numerous languages and have access to a worldwide network of more than 34 million credit card merchants and ATMs.

As part of its solution set, Bank of America Merrill Lynch offers clients the ability to present purchase order information to suppliers, receive invoices electronically, and approve them with Paymode-X® Invoice Management. The system is a Software-as-a-Service (SaaS) solution offering flexible data integration and access to a large network of buyers and suppliers.

Website www.baml.comFounded 1784Headquarters Charlotte, NCOther Locations Offices in 43 countriesEmployees Over 270,000 full time employees globallyPaymode-X End Users 500 corporate and commercial clients and 200,000

active network membersAnnual Transaction Volume

7 million + payments for over $120 billion

Industry Segments Varied, including healthcare, government, entertainment, utilities, service organizations, consumer products, gaming, financial services, agribusiness, industrial, computer, timber, newspaper, automotive, telecommunications, manufacturing

Awards / Recognitions » For the sixth straight year in 2012, Bank of America Merrill Lynch was named No. 1 in the annual card issuer’s identity safety scorecard analysis by Javelin Strategy & Research, rating 26 of the nation’s largest credit card issuers on their capabilities to prevent, detect and resolve fraud.

» Bank of America Merrill Lynch Commercial & Corporate Banking Call Centers recognized for “An Outstanding Customer Service Experience” by J.D. Power and Associates in 2012.


Partners / Resellers Bottomline Technologies (for Paymode-X Solution)

Solution Overview

Bank of America Merrill Lynch leverages Paymode-X to help its clients convert from paper to electronic payments and invoices with a Cloud-based solution, providing access to a large network of buyers and suppliers, dedicated supplier on-boarding services, and a modular approach to solution deployment. Paymode-X allows clients to add services as their needs change and grow.

The solution is a web-based solution (no hardware to install, no lengthy implementation, no IT headache), that integrates with a client’s existing system and allows desktop access for authenticated users.


There are over 200,000 suppliers in the Paymode-X network. A dedicated on-boarding manager actively recruits and supervises enrollment of a client’s suppliers not already in the network. Bank personnel provide training and ongoing support for suppliers prior to going online and after enrolling. Vendors receive unlimited electronic remittance detail in their preferred format without needing to switch banks. Paymode-X credits and debits to and from any bank.


The solution supports multiple invoice submission options for suppliers. Data is integrated into the solution’s workflow regardless of the form in which it is submitted. Suppliers can submit invoices electronically via a web template, flip of a PO, data file upload, or data file transmission.

The solution also enables suppliers to submit paper invoices through email, fax or a PO box where they are imaged and both the images and data are fed into the invoicing portal, allowing users to review the extracted data and scanned image side by side.

Approval Workflow

The modular solution provides users with flexible and configurable options for workflow processing and approval. Some of the options available include setting thresholds for approval levels, ability to edit GL codes and invoices, ability to automatically route invoices to specific users or queues based on client-defined criteria, detailed identification of exception handling tolerances at the line item level, and the ability to automatically approve invoices based on PO matching criteria.

The matching capabilities of the solution can identify invoice discrepancies which can be flagged and routed to users for review. The matching criteria are user-defined to help ensure maximum flexibility for each client. The solution also offers an interface for a payer to send messages to a supplier to correct invoice discrepancies and collaborate when an invoice needs correction or needs to be resent.


Bank of America Merrill Lynch works closely with clients during implementation to be sure that the approval and workflow rules as defined meets the clients’ specific business needs.

Once invoices are reviewed and approved online the invoicing information is fed directly to the clients AP or ERP system The file format of the electronic invoice feed is customized for each client, with technical requirements for the automation of the invoice entry process.

Dynamic Discounting

A key differentiator of Paymode-X is the solution’s ability to support dynamic discounting. The system enables both buyers and suppliers to initiate an offer for a dynamic discount. The supplier can specify a discount and a deadline date during creation or transmission of an invoice. The buyer has the ability to decide to accept the offer and initiate early payment or decline the offer and pay on normal terms. Buyers also have the ability to initiate discount offers on approved invoices with maximum flexibility. The system supports advanced concepts that allow a client to introduce multiple discount offers to their suppliers.

Advanced functionality allows for a discount offer to be altered without introducing problems for invoices already in process.

When clients elect to use the Paymode-X dynamic discounting module, suppliers are made aware of early pay opportunities via the Paymode-X website. Notification is sent advising suppliers they have a discount offer to review.

Electronic Payments

Paymode-X can support a single file, multiple payment type integration with its clients. In addition to being able to make electronic ACH payments and send electronic remittance, bank clients can integrate card payments into their single file. The system can also initiate payment by check, card and wire.


Paymode-X provides users and suppliers access to a suite of online reports to view payment, purchase order and invoice history and status information. The solution enables users to create custom reports at both a basic and advanced level of search, depending upon user needs. Reports can be filtered by a variety of criteria. Data can also be exported into a variety of offline analytic tools, such as Crystal Reports. Most reports can be exported in a variety of formats including XML, Excel, PDF and custom.

Implementation and Pricing

Bank of America Merrill Lynch assigns an Implementation Project Consultant to each project to provide each client with a dedicated resource to guide them through the process. The consultant works with the client to determine the detailed workflow and integration processes that work best for their unique needs. Clients can typically start to receive electronic invoices approximately 12-16 weeks from the time they provide their file and workflow requirements.


During implementation, training is provided to familiarize clients with the system and functionality prior to going live. After the project transition live customer support is available from 8 AM to 8 PM Eastern Monday through Friday via phone and e-mail.

The fee structure for this solution is a combination of an up-front set-up fee, transaction fees and a monthly license fee. Client specific pricing is used based on client volume and products purchased.

“Bank of America Merrill Lynch” is the marketing name for the global banking and global markets businesses of Bank of America Corporation. Lending, derivatives and other commercial banking activities are performed globally by banking affiliates of Bank of America Corporation, including Bank of America, N.A., member FDIC. Securities, strategic advisory, and other investment banking activities are performed globally by investment banking affiliates of Bank of America Corporation (“Investment Banking Affiliates”), including, in the United States, Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp., both of which are registered as broker-dealers and members of FINRA and SIPC, and, in other jurisdictions, by locally registered entities. Merrill Lynch, Pierce, Fenner & Smith Incorporated and Merrill Lynch Professional Clearing Corp. are registered as futures commission merchants with the CFTC and are members of the NFA.

Investment products offered by Investment Banking Affiliates:

Are Not FDIC Insured * May Lose Value * Are Not Bank Guaranteed.

© 2012 Bank of America Corporation.


Basware Basware is the global leader in cloud based e-invoicing and purchase-to-pay solutions with more than 1,200,000 users in over 60 countries. Basware’s B2B Cloud solutions and services provide an open, secure and global ecosystem for buyer and supplier collaboration, connecting more than 1.9 million buyers and suppliers globally. The solutions are architected to meet the needs of SMEs and global enterprises and are built upon Basware’s deep knowledge and experience of B2B financial processes, coupled with intelligent cloud connectivity and the Open Network. With Basware, organizations benefit from more efficient procurement, accounts payable and accounts receivable processes; sustainable cost savings; better insight to cash flows; and improved buyer-supplier relationships. The solutions are available via the cloud, on-premise or through business process outsourcing in the U.S., Europe and Asia-Pacific through an extensive network of Basware offices and business partners.

Website www.basware.comFounded 1985Headquarters North American HQ – Stamford, CTOther Locations World HQ in Espoo, Finland, 10 offices in Europe and

Asia PacificEmployees 1200 +Customers 1,700 and 800,000+ active buyers/suppliers in Open

e-invoicing networkEnd Users 1,200,000+Annual Transaction Volume

35+ Million Annually

Industry Segments AllKey Accounts IKEA, Whole Foods, Sonic Drive Ins, Panasonic, Heineken,

NASDAQ, Caterpillar, Alcon, ABB, Cargotec, ING, Global Industries, Apache, Children’s Hospital, Adventist Healthcare

Awards / Recognitions

Best EIPP Service Provider by Global Finance Magazine 2010-2012; Pros to Know 2009-2012; Best Supplier Support and Enablement 2011, 2012; Top 100 Companies by Supply and Demand Chain Executive 2009-2012

Partners / Resellers SAP, Microsoft, Cintas, EMC, Oracle, Ricoh, Cannon

Solution Overview

In 2012, Basware launched Alusta, a cloud-based platform for business-to-business transaction collaboration. Alusta is the Basware platform that underpins and powers the B2B Cloud, an open, secure and global commerce ecosystem for buyers and sellers. It streamlines, optimizes and accelerates transaction collaboration, improving purchasing and invoicing processes, and delivering enhanced supplier relationships


and financial performance. Alusta provides new features including improved GUI with single role based user interfaces across all P2P and O2C processes; an updated mobile client for mobile phones and tablets including Apple iPhone, iPad, Android and others; real-time social collaboration, multi-tenant SaaS packages; neutral network connectivity; and enhanced reporting. The mobile applications allow clients access to review, comment or approve invoices and return to AP for payment. All Basware solutions are marketed geographically and vertically with the ability to deal with multiple currencies, languages and ERPs. Basware provides 100 percent visibility of spend, control and compliance, and agility through flexible organizational modeling via an open, interoperable global trading network. The Basware Invoice and e-invoicing solutions provide speed, insight and efficiency to all organizations regardless of size with the benefit of improving cash visibility and forecasting, reducing invoice handling costs and ensuring compliance.


Supplier enablement is a priority for Basware and offers customers full access to its Supplier Activation service. Basware currently has over 800,000 companies actively transacting on its Open Network. Basware has supplier recruitment teams that are responsible for onboarding new companies to the Open Network. Basware manages ongoing campaigns to recruit all of a client’s suppliers by demonstrating the value of the solution to the suppliers. The service includes identification of target suppliers and activation of those suppliers who are able to send or start sending e-invoices. Suppliers find the ease of use and ability to collaborate with users to reconcile exceptions and discuss questions that accelerate payments particularly compelling. In addition, there is no charge for suppliers to use the service which is also a big benefit to suppliers.

The Basware Supplier Activation service provides companies a pre-defined approach designed to achieve the maximum on-boarding and activation of suppliers. The service consists of a defined project plan that includes process descriptions, ready-made tools and templates, and pre-defined roles and responsibilities of the parties. At any point during the activation process, companies can easily follow the progress of a supplier activation campaign through reports provided by Basware.

The goal of the Supplier Activation services is to:

» Raise the level of automatically handled invoices

» Increase the amount of suppliers who are sending electronic invoices

» Identify and gather information on suppliers and their ability to send e-invoices

» Contact and activate those suppliers who are already set up to send e-invoices

» Offer sending options and activation for suppliers who do not yet have e-invoicing capabilities


Basware eInvoicing meets the needs of companies of all sizes no matter how complex or straight forward the environment. Its built-in flexibility allows companies to send and receive invoices any way they want, offering activation services to get suppliers on board quickly. Vendors have the ability to submit invoices electronically using Basware’s


eInvoicing solution, another provider’s eInvoicing solution, or through a Basware provided web portal. Converting a PO to an invoice by supplier (PO flip), calculated receipt settlement (self-billing) and contract based self-billing are also included in the solution. Basware also offers Supplier Activation services to enable clients to migrate their suppliers from paper to electronic invoices. As soon as an invoice is electronically received, the information is available to Accounts Payable; the information can be searched and filtered. All columns are configurable based upon the client requirements. All invoice information received is retained; no line information is deleted. Additional fields (i.e. custom tariffs, discount amount, etc.) are present in the application which may not be applicable to the end user but may be needed as an AP Professional.

Basware’s Invoice solutions allow for receipt of both electronic and paper invoices into the front end of the AP process and support both distributed and centralized capture of invoices. Basware solutions enable customers to shift 100 percent of their invoices to eInvoicing from day one. All forms and formats can be managed as inputs including web-based data, emails, fax, html, pdf, and paper.

For paper invoices, Basware also offers two scanning options to customers: 1) onsite customer-run scanning; and 2) outsourced scanning, where Basware takes the responsibility of turning paper invoices into true electronic invoices through Basware’s Scan and Capture services.

A key differentiator is Basware’s Open Network, The Open Network is a B2B transactional platform that’s been connecting millions of businesses worldwide for over a decade. It seamlessly connects with 150 international e-invoicing platforms, making it the largest inter-operator network in the world. And it’s growing all the time.

The Open Network offers:

» Instant liquidity – tens of millions of interactions, millions of transactions, hundreds of thousands of buyers and sellers

» Information transparency – every participant has access to information optimized for role, task and organization

» Neutrality – join one network, transact everywhere

» Multi-enterprise collaboration – simple tools that enable efficient engagement between trading partners

Approval Workflow

Basware provides a very robust workflow environment. Customers can configure the solution based on their rules to meet specific business needs. Workflows can be automatic where all information about the rules is known, semi-automatic where some information is still required, or manual with an easy to use interface for sending invoices for review and approval. Administrators have complete control over individual user access rights – they can control what users may see, approve, how much they can approve, along with any action that may be required of the user. During the initial implementation phase, Basware embeds the client’s business rules within the system. Simple interfaces are then provided for the input and review of workflow items. Automatic escalation, reminders, archives, and back-up chain features are all standard and available for use from day one.


Once a workflow is designated, email messages alert users if an invoice needs attention. The email will include a link to a web page for review and approval. Another key differentiator provided by Basware’s Alusta platform is the ability for designated users, including vendors, to collaborate on answering questions about invoices and exceptions via a social media platform. This feature enables any issues to be resolved quickly and efficiently, reducing costs to the customer and allowing quicker payment to suppliers.

The Basware Invoice solution integrates directly to SAP, Oracle, JDE, Peoplesoft, Dynamics and over 250 other ERP and financial systems. . Basware also provides unique mobile solutions – users can approve invoices and check statuses on any mobile platform (Apple’s iPhone or iPad, Android, and other networks) via a Basware app.


Basware’s Invoicing solutions enable both customers and suppliers to realize the cost efficiencies of e-invoicing across several platforms. This leads to reduced processing and personnel costs, swifter payment, and the potential to take advantage of dynamic discounting. The solution’s ease of use and ability to offer complete purchase-to-pay functionality provide the flexibility necessary to configure the system to support any number of discount options for customers and suppliers.

Electronic Payments

Basware Invoice Automation offers seamless electronic and payment processing. The solution accepts a wide range of payments including wire transfer, card, ACH, and paper checks, among others, in dollars and several global currencies. The solution’s configurable modules give both clients and their suppliers the opportunity to make and track electronic payments according to rules that work best for their business.


Excellent functionality and ease of use come together in Basware’s reporting and analysis tools. Invoices can be monitored during every step in the process. The Basware Invoice Automation solution has the ability to provide an unlimited number of reports via point-and-click functionality. Reports can be created on spend analysis, cash management, suppliers, audit trails, and include information about an invoice’s history through the workflow. Suppliers are able to review, confirm, and comment on their own invoices as well. A complete and comprehensive audit trail of all invoice-related events in Basware’s Invoice Automation suite is provided and can be leveraged for SOX compliance. A new analytics tool providing even more detail to management and end users will be coming on line in early 2013.


Software as a Service (SaaS) implementations are quick and can be up and running in a matter of weeks. Implementing a licensed product typically takes about three months. Transactional, user-based, and licensed fee pricing structures are available. These fees include full support to customers during and after solution implementation.


Direct Commerce Direct Commerce’s mission is to transform the delivery and management of inter-business financial transactions from a predominantly paper-based process to a fully electronic interchange. Since 2000, Direct Commerce has been automating the Procure-to-Pay process for Fortune 500 companies reliably and on-time.

Direct Commerce (DCI) offers solutions that include electronic invoicing, remittance and payment, imaging, discount management, dispute resolution, workflow and more over a secured web-hosted Supplier Portal that is customizable and delivers bottom-line cost reduction results.

Website www.directcommerce.comFounded 2000Headquarters San Francisco, CAOther Locations Global HQ in San FranciscoEmployees <100Customers Fortune 1000 companies, including The Home

Depot, Eli Lilly & Company, Merck, Office Depot and others

End Users >80,000Annual Transaction Volume

60 billion

Industry Segments Aerospace and Defense, Chemical, Energy, Food & Beverage, Gas & Power, Healthcare, Insurance, Manufacturing, Pharmaceutical, Retail, Transportation, Technology, Fortune 1000

Key Accounts ConfidentialAwards / Recognitions Numerous client innovation awards, including

Eli Lilly & Company, The Home Depot, Memorial Hermann Healthcare Systems and the PayStream Advisors Award for Excellence

Partners / Resellers Citibank

Solution Overview

Direct Invoice™ enables electronic invoice submission by vendors through web-based forms, file upload processes, or direct file transmission (EDI). Buyer-specific rules are applied to validate the electronic invoice before submission. Electronic invoices can be routed for approval, matched to purchasing and receiving information, or delivered directly into the company’s financial system. Archived electronic invoices can be easily retrieved online for auditing, dispute resolution, or reporting. Clients who select Direct Invoice can also add other modules to create a seamless electronic Procure to Pay process.



Direct Commerce works closely with buyers to optimize the supplier enrollment process to ensure it meets both deadlines and client expectations. Staff analyzes each client’s needs and develops a custom plan including enrollment goals. The Direct Commerce team communicates the advantages to suppliers, enrolls them in the system and implements the on-boarding process.


The Direct Invoice solution enables clients to significantly reduce invoice processing costs by entirely eliminating many paper-based transactions and streamlining overall AP processing. The solution provides electronic delivery of PO and non-PO order invoices and buyer-specific validation rules applied before invoice submission.

The solution offers a centralized portal where all transactions can be quickly found. The solution enables swifter communication with suppliers and electronic archival of vendor-submitted invoices. Any kind of file attachments can be added to the invoice. This feature, combined with improved supplier communication, allows for quicker resolution of exceptions and thus faster payment and processing.

Approval Workflow

The proprietary system, Direct Workflow™, eliminates the need for paper approvals and interoffice mail. Direct Workflow™ manages the review, encoding and approval of documents within the users’ organization. The system also centralizes shared services, and offers collaborative dispute resolution solutions. The easy-to-use document encoding and notes enable clear communication within the client’s organization and between clients and suppliers.

The solution enables routing of all document types. Clients can configure the system according to their business rules, setting the approval levels for each type of invoice. This enables each invoice to move expeditiously through the system, receiving automatic approval when it matches the PO criteria. Invoices which don’t match the criteria can be forwarded quickly to the right approval level for handling. The robust encoding, notes and history features allow each employee to quickly get up to speed on any discrepancies.


A key differentiator is the Direct Commerce Rapid Pay™ Program. This comprehensive process enables all clients to maximize the discounts available to them. Direct Commerce works closely with clients to understand, quantify and measure the program to deliver financial gains.


Rapid Pay uses state-of-the-art technology tools and one-of-a-kind human capital to enroll new suppliers, ensure procedures and information are updated, analyze a client’s current discounting model, and recommend and implement the program that best meets the client’s business and financial goals.

Electronic Payments

Direct Remittance™ uploads payment information from the buyer’s financial system or banking partner to update the status of invoices online. Buyers can choose to publish the payment schedule, the payment status, and/or remittance details. Payment notifications are delivered to suppliers based on their preferred notification methods. This system uses electronic payment delivery and auto-update of invoice status to reduce payment inquiries from suppliers and provide a strong complement to any existing payment system.


Direct Report™ provides Accounts Payable managers and their departments with a wide variety of powerful tracking and reporting functions. Reports can be viewed, printed or automatically delivered via e-mail or file download. The easy-to-use web interface enables clients to select and summarize information to create customized reports as well as views of user workload and activities.

Direct Report provides flexible, real-time reporting and supplier aging reports and discount tracking enable clients to save millions of dollars through enhanced management views of data, leading to improved department productivity and discount maximization. Data can also be exported into third-party tools like Crystal Reports in formats including HTML, PDF, Excel, CSV and XML.


Direct Commerce Project Implementation starts with a Needs Assessment and Requirements Gathering process. Configuration, Testing and Supplier Rollout follow this initial step. Direct Commerce dedicates a professional team of project managers, engineers, and customer support associates to your account and provides leadership through this process.

Direct Commerce customer care supports clients on a daily basis. The Service and Support team ensures that client application operates efficiently 24/7. State-of-the art monitoring tools allow customer care engineers to measure the heartbeat of each client’s application and verify it is running continuously.


Direct Commerce Case Study

Eli Lilly

Eli Lilly and Company, a $24 Billion leading innovation-driven corporation, is the 10th largest pharmaceutical company in the world with over 35,000 employees worldwide. It operates in 72 countries, with sales organizations in more than 140 countries.

Eli Lilly was looking for an AP Automation Solution that could handle huge invoice volume while being intuitive and easy-to-use for its suppliers. After a careful review process, Eli Lilly decided its best option was to automate using Direct Commerce’s electronic invoicing solution. More than 10 years later, Lilly continues to reap savings as Direct Commerce continues to work collaboratively with Lilly to design creative enhancements that meet Eli Lilly’s evolving business requirements. One of these enhancements is includes implementing Direct Commerce’s Rapid Pay™ Discount Management System.

Solutions

In an effort to streamline Eli Lilly’s Accounts Payables processes, Direct Commerce implemented its Direct InvoiceTM E-Invoicing Platform that flips a Purchase Order into an invoice, validates against specific Lilly business rules, and automates the vendor management processes.

Not only did Direct Commerce deliver on numerous electronic invoicing features but it also provided Lilly with its Supplier Onboarding Services that facilitated activation of over 4,000 suppliers in just a few months.

To accomplish this goal, Direct Commerce deployed strategic on-boarding planning process in advance of Go Live. “Direct Commerce provided comprehensive training, a variety of online tools, and friendly ongoing customer support so Lilly suppliers felt at-ease with the application in a very short time” stated Eli Lilly Director of AP. Not only was the electronic invoicing application simple to use, and quickly adopted by Lilly’s thousands of suppliers, but it paved the way for greater savings using Direct Commerce Rapid Pay Discount Management program.

Direct Commerce’s Rapid Pay Discount Manager enabled Eli Lilly to capture supplier discounts previously not taken by the company. Direct Commerce combined technology and human capital to create a lasting discount program for Eli Lilly that motivates suppliers to offer very attractive terms. Rapid Pay features enabled for Eli Lilly included:

» Programmatic discount optimization

» One-step payment functionality

» Select-your-own terms options


» Approver notification

» Automatic escalation for soon-to-be missed discounts

» Advanced analytics and reporting

Benefits

Eli Lilly and Direct Commerce enrolled over 4,000 suppliers eliminated nearly 100% of their paper invoices in record time. In addition, since Eli Lilly has become 100% electronic, it has eliminated late payments and dramatically reduced administrative and help desk costs. For its suppliers, Lilly enabled faster invoice processing, elimination of lost paperwork and keying errors, provided complete visibility to purchase orders, payments and invoice status, all at no cost to the supplier! Direct Commerce Rapid Pay Discount Management program enabled Lilly to capture supplier discounts previously not taken. “Direct Commerce skillfully combined technology and human capital to create a profitable discount management program for Eli Lilly” stated Eli Lilly Director of AP. There are numerous Rapid Pay benefits for Lilly and its suppliers:

Lilly

» Discounts can be increased dramatically

» Discounts are an excellent investment of short term cash

» Strategic Sourcing time/effort can be used more effectively versus lengthy discount payment term negotiations

Supplier

» Not locked into the same discount term on every invoice

» Can reduce collection costs

» 24/7 Visibility to Invoices and Payment Status

Reaping the Rewards

The Direct Commerce Electronic Invoicing Network enabled Lilly to:

» Eliminate nearly 100% of their paper invoice transactions

» Reduced processing costs and headcount by enrolling their Top 4,000 suppliers within months of go-live

» Increase transaction accuracy with a dramatic reduction in invoice errors

After successfully implementing its e-invoicing program, Eli Lilly capitalized on early-pay discounts by implementing Direct Commerce Rapid Pay Discount Management program making it easy for suppliers and for Eli Lilly to implement early-pay policies. Almost immediately, Eli Lilly reaped significant savings with Direct Commerce Rapid Pay Discount Management System. On an annualized basis, the savings has grown to millions of dollars per year. “We are absolutely delighted with the solutions, services, and financial benefits we are gaining each year with Direct Commerce” states Eli Lilly Director of AP.


GXS GXS is a leading B2B integration services provider and operates the world’s largest integration cloud, the GXS Trading Grid®. GXS software and services help more than 400,000 businesses, including two-thirds of the Fortune 500 and 22 of the top 25 supply chains, extend their partner networks, automate receiving processes, manage electronic payments, and improve supply chain visibility.

GXS Managed Services combines the GXS Trading Grid® with process orchestration services and global resources to manage a company’s multi-enterprise processes. Based in Gaithersburg, Maryland, GXS has direct operations in 20 countries, employing more than 2,400 professionals.

Website www.gxs.comFounded 2000 (GEIS, 1967)Headquarters Gaithersburg, MDOther Locations GXS has 40 locations globallyNumber of Employees 2,400+Number of Customers 40,000+Number of End Users Combined trading community of over 400,000

businesses with millions of end usersKey Clients Two-thirds of the Fortune 500, Dell, Unilever, Nestle,

Michelin, Tesco, ComcastTarget Verticals Any B2B: Retail, Manufacturing, CPG, Automotive

and Financial Services are strong verticals for GXSPartners / Resellers Direct sales force, supplemented by strategic

channel partners around the worldTransactions Processed Annually

Over 12 billion

Awards / Recognitions » 22 of “The Gartner Supply Chain top 25 for 2012” use GXS’s B2B Integration Services

» 23 of “The Gartner Supply Chain Top 25 for 2011” use GXS’s B2B Integration Services

» GXS Awarded SWIFTReady Connectivity “Best Practice” Label – 2011

» GXS Ranks in the Top 100 of InformationWeek 500 Top Technology Innovators across America - 2010

Solution Name ‘Active Applications’: e-Invoicing solutions for Accounts Payable and Receivable.

Current Version 5.5.1.5Year Introduced 2007Frequency of Upgrades Quarterly


Solution Overview

GXS specializes in integration solutions, connecting to many ERP and legacy systems. The core solution is software as a service, hosted in the cloud, with some connectivity solutions offered via license where appropriate. The solution connects to hundreds of SAP instances; more than 50 Oracle ERP instances and numerous other Infor, Microsoft Dynamics, QuickBooks, Peachtree and Sage applications.


GXS Expert On-Boarding implementation specialists work with buyers to understand business’ requirements, define goals and objectives, agree on timelines and develop project plans. A dedicated program manager will develop and conduct a customized supplier survey to gain insight into their technical capabilities. Program goals and objectives are communicated to suppliers through customized educational materials, free webinars and a personalized website. Dedicated implementation specialists reach out to suppliers and report back to buyers with weekly performance scorecards. When available, suppliers may use the Net Community Manager to test their documents for system compatibility. Additionally, GXS provides ongoing, 24x7 local language support to trading partners.


GXS provides eInvoicing solutions for hundreds of thousands of large corporations, small and medium-sized enterprises, and banking customers. Large enterprises may exchange electronic invoices via EDI directly from ERP/general accounting systems, converting data into preferred formats for Straight-Through Processing. Banks often re-label GXS eInvoicing applications as part of their traditional factoring, supply chain finance or procure-to-pay offerings. GXS offers small and medium-sized enterprises a range of cost-effective connectivity solutions including: web, Excel, software and service solutions, a range of payment models. Using GXS, companies can now electronically exchange invoices with regulatory compliance in 41 countries.

Approval Workflow

GXS provides solutions and services across the entire order-to-pay and order-to-cash spectrums. Buyers are able to match multiple documents and manage exceptions through rules-based approval workflow that flags exceptions and routes them for resolution. Buyers and suppliers are both notified of exceptions and are able to collaborate online and share documents to reach resolution.

Working Capital

GXS works with partners to provide supply chain finance solutions. This varies from classic factoring to “reverse” factoring and dynamic discounting. Suppliers


can use the system to review approved buyer payables and accelerate cash flow by offering early payment discounts. GXS offers cloud-based services that simplify how corporations connect to their banks and other counterparties. GXS typically reduces not only the cost and complexity of client delivery, but also helps accelerate speed-to-market and time-to-revenue.

Electronic Payments

GXS processes approximately 1 billion payment transactions per year. Customers can send instructions for ACH, wire transfer, check and international funds transfers directly to banks or via SWIFT.


Automated reports provide visibility to partner performance and key metrics. Reports can be customized, shared, subscribed to, exported and drilled into, making it easy to collaborate with partners on issues. Configurable search functionality allows users to generate reports and save queries for future use. Report data can be downloaded into comma-separated format for use in other reporting solutions.


Implementation typically takes 4-6 weeks, depending on the complexity of the installation, the number of trading partners, customer commitment and technical maturity of the customer.

Pricing is flexible, with each implementation typically incurring a service fee, which may be amortized over the term of the contract. Some customers prefer that suppliers pay transaction fees, others pay the fees on behalf of suppliers to encourage adoption. Still others prefer a “blended” option that allows them to underwrite predicted supplier adoption.


U.S. BankU.S. Bancorp is one of the oldest and most-trusted banks in America. Founded in 1863, it has grown to the fifth-largest bank in the United States. The company prides itself on having the expertise and stability to meet all of their clients’ financial needs, and doing it with a level of service no other provider can match.

U.S. Bank Electronic Invoice Presentment and Payment (EIPP) is a cloud-based Software-as-a-Service (SaaS) solution. Since it is cloud-based, it requires no software installation, and minimizes IT requirements and resources to enable clients to quickly achieve speed to value, lower their total cost of ownership and increase user adoption and employee productivity.

Website www.usbpayment.comFounded U.S. Bancorp: 1863; Corporate Payment Systems

division: 1986Headquarters Minneapolis, MNOther Locations Global offices located in North America, Europe

and AsiaEmployees U.S. Bank: 61,000; Corporate Payment Systems:

630Net Income U.S. Bancorp: $4.87 billion (2011)Customers U.S. Bank: 17.4 million; Corporate Payment

Systems: 6,300End Users 41,000Annual Transaction Volume

24 million invoices; more than 78 million supporting documents

Industry Segments Transportation, public sector (federal/state/municipal), commercial real estate, education & nonprofit, energy, healthcare & pharmaceutical, insurance, manufacturing, oil & gas, retail & apparel, services, telecom & utilities, among others

Key Accounts Due to client confidentiality, U.S. Bank does not disclose this information

Awards / Recognitions Enterprise Value Award (CIO), Most Admired Superregional Bank (Fortune), One of America’s Greenest Banks (Bank Technology News), Most Reputable Companies (Forbes), Best Bank in the United States (Euromoney), #1 Most Trusted Bank in Consumer Protection (Ponemon Institute), One of the World’s 50 Safest Banks (Global Finance)

Partners / Resellers Syncada® from Visa


Solution Overview

U.S. Bank pioneered electronic payment products as the first commercial bank card issuer, and is proud to still lead the way today. U.S. Bank provides a comprehensive array of B2B payment solutions across all market segments, program sizes and locations. Customer retention averages over 10 years because many clients view U.S. Bank Corporate Payment Systems as a trusted, dependable partner.

U.S. Bank EIPP facilitates complex, data rich, high-value transactions that enable clients to eliminate costs associated with paper processing, increase control over payments and better manage cash flow. U.S. Bank EIPP is built on the Syncada® from Visa network––a joint venture between U.S. Bank and Visa that provides the most up-to-date technology and access to the only non-proprietary global multi-bank invoice and payment processing and financing network.


Full service supplier enrollment is included in the U.S. Bank EIPP offering. Approximately 12,000 suppliers are already connected to the network. U.S. Bank’s supplier enrollment team works closely with clients to identify and prioritize additional suppliers they want to join the network. Bank personnel actively support the recruitment effort by enabling suppliers for eInvoicing and providing training prior to going online and after enrolling. U.S. Bank EIPP provides a powerful incentive for suppliers to enroll, including reduced billing and payment errors, lower costs from the elimination of expensive paper processes and access to financing.


After the U.S. Bank EIPP solution captures the data, the system automatically validates invoices against the vendor master data, providing two-way or three-way matching to the PO or goods received note. Flexible business rules enable the client to customize the validation process to meet their specific business needs. This results in the majority of invoices processed “straight-through” to payment without human intervention.

The solution visually flags discrepancies for immediate attention, thus increasing processing efficiency and speed of pay. Enrolled suppliers can log in to a self-service supplier portal, which allows them to complete key accounts receivable tasks such as dispute resolution. Clients can use the system to send suppliers direct messages regarding invoice errors, and suppliers can make the appropriate adjustments to their invoices right in the system.

The solution also offers a unique ability to track utility bills. The system loads not only total invoice amount but also usage statistics such as BTUs. This enables clients to discover efficiencies that can help reduce their utility bills and increase savings over time.


Approval Workflow

U.S. Bank EIPP includes an automated approval and workflow tool. Clients have the ability to customize the solution according to their business rules during system implementation. In addition to choosing their own method of invoice routing, the client can also determine the level of authority and accessibility for each user. The client determines invoice routing based on the criteria mission critical to their business.

If the invoice does not match a PO or other approval categories, the system flags it for further action by the appropriate staff member. That staff member can send the supplier a message directly from the U.S. Bank EIPP page that displays the invoice, allowing the supplier to immediately identify the discrepancy. If the supplier is not on the network, the system allows buyers to create an eBill (credit memo) for the supplier, which is a supplemental transaction correction document that offsets for the difference. U.S. Bank EIPP records and maintains a complete history of all user actions and events, enabling an efficient auditing process.


A key differentiator for U.S. Bank EIPP is its unique ability to make payments to suppliers on behalf of buyers. As the fifth largest bank in the United States, U.S. Bank provides a host of financing options and services for its customers. U.S. Bank EIPP’s improvements in processing efficiency for clients enable them to take advantage of early payment discounts and improve overall cash management. U.S. Bank offers a buyer financing model, where U.S. Bank pays the suppliers on the net due date and the buyer pays U.S. Bank directly on a later date, allowing buyers to conserve cash when necessary.

U.S. Bank also offers a supplier financing model, where U.S. Bank provides liquidity to suppliers for buyers who don’t wish to utilize their own cash to fund early payment discounts. By leveraging this program, buyers can extend days payable outstanding while suppliers decrease days sales outstanding. The system is configured to take advantage of financing for both suppliers and buyers, depending upon what works best for the client’s business.

Electronic Payments

U.S. Bank EIPP is the largest network offering both invoice and payment processing in conjunction with buyer and supplier trade payables financing. U.S. Bank’s experience with electronic payment processing enables all payments to be made seamlessly and efficiently. The solution accepts a wide range of payments including ACH/EFT, wire transfer and cardless payment accounts through U.S. Bank. Of course, the system also supports conventional paper check issuing.



U.S. Bank EIPP includes a dashboard that enables users to track key activities, tasks and Accounts Payable-related operational and productivity metrics. The solution includes a wide range of standard reports and the ability for users to create custom reports at both summary and transaction levels. A robust search tool allows users to find specific documents, transactions, invoices requiring approval and other information quickly and efficiently. Data can also be exported into third-party tools like Crystal reports in formats including HTML, PDF, Excel, CSV and XML.


Standard implementation is 90 days. The process is designed to be collaborative while maintaining appropriate checks and balances, so individual client times may vary due to resource availability, process and system complexity. U.S. Bank offers a “warranty period” for a period of time after implementation where U.S. Bank project managers stay directly involved with the customer team to ensure a smooth transition. U.S. Bank offers ongoing support via a dedicated, multi-tier client support team that includes online tools as well as a toll-free customer service line. Fees are charged on a per-invoice basis and follow a tiered-pricing structure.


ConclusionElectronic Invoice Management is a top priority among executives in the PayStream 2012 survey. Twenty-eight percent said they have already launched an invoice automation initiative and another 47 percent said they plan to within a year.

But eInvoicing, alone, is not enough. Companies considering adoption need to plan for what they’re going to do with data once they get it. Without a supplier management strategy and culture conducive to workflow automation, the potential for friction is high. The solution providers profiled at the back of this report, have devoted considerable developmental resources toward addressing this problem, and we are encouraged by what we are seeing.

The market for eInvoicing is opening up. Currently at $280 million, PayStream predicts demand is growing at a compound average annual growth rate of 13 percent. But if you look at where we are in the big picture, we are still in about the third inning.


Research MethodologyThe findings in this report are based on the results of PayStream Advisors 2012 Invoice & Workflow Automation Adoption and Electronic Invoice surveys. Participants in the surveys included more than 300 AP professionals. Based on our experience and the number of respondents, the survey has a confidence level of +/-5 percent.

About PayStream Advisors, Inc.PayStream Advisors is a technology research and consulting firm that improves the way companies plan, evaluate, and select emerging technologies to achieve their business objectives. PayStream Advisors assists clients in sorting through the growing complexities of IT applications related to business process automation with the goal of making objective, analytical, and actionable recommendations. Wherever business process automation technology is an issue, PayStream Advisors is there to help. For more information, call (704) 523-7357 or visit us on the web at www.paystreamadvisors.com.

Documents

Electronic Invoice Management - GXS€¦ · Electronic Invoice Management Going with the (Work)flow Barriers to eInvoice Adoption Making a Case for Automation Usage of AP Automation