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SECRETS OF WORLD-CLASS AP DEPARTMENTS
BEST PRACTICES IN AP AUTOMATIONMatthew Delman
Senior Payables Researcher
Ardent Partners
Ray Emirzian
AP Solutions Evangelist
eclipse Smart AP Automation
February 19, 2015
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ARDENT PARTNERS BACKGROUND
Copyright © 2015 - Ardent Partners Ltd.
Ardent Partners Research and advisory firm specializing in AP and
supply management Focused on driving value and transformation across
the organization through strategy, process & technology
Matt Delman is Senior Payables Researchers and AP expert
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DOCSTAR BACKGROUND
Copyright © 2015 - Ardent Partners Ltd.
docSTAR ECM and AP Automation experts for 20 years 8,000 organizations use docSTAR ECM and AP
Automation Solutions Ray Emirzian is VP of Product Management and AP
Solutions Evangelist
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2015 INVOICING BENCHMARKS
$14.21 2,308
Average Cost per Invoice Averages Invoices per FTE
12.4 days
Average Invoice Cycle Time
13.1%
Average Exception Rate
Copyright © 2015 - Ardent Partners Ltd.
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THAT PERSISTENT PAPER PROBLEM
Copyright © 2015 - Ardent Partners Ltd.
© Ardent Partners - 2014
Invoice Formats
70%
30%
Manual Electronic
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THE OPPORTUNITY FOR AP AUTOMATION
Copyright © 2015 - Ardent Partners Ltd.
Reduce procure-to-pay process time
Effectively capture early payment discounts
Improve supplier and customer relations
Gain greater business insights
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AP METRICS (BEST-IN-CLASS V. ALL OTHERS)
Copyright © 2015 - Ardent Partners Ltd.
MetricsBest-in-Class All Others
Cost per Invoice $2.42 $17.61
Invoices Processed per FTE / month 4,814 1,408
Invoice Processing Cycle Time 3.7 Days 17.1 Days
Invoice Exception Rate 8.0% 16.4%
© Ardent Partners - 2014
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THE BEST-IN-CLASS ADVANTAGE: AN AP EXAMPLE
Best-in-Class Monthly Cost:
$2,420
All Others Monthly Cost:
$17,610
All Others: $17.61 per
invoice
Best-in-Class: $2.42 per invoice
Per 1,000 invoices
Best-in-Class AP groups have invoice processing costs that are 86% less
than their competitors
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BEST-IN-CLASS PROCESSING ADVANTAGE
Copyright © 2015 - Ardent Partners Ltd.
© Ardent Partners - 2014
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SECRETS OF THE BEST-IN-CLASS
Top
20% Performers
Best-in-Class AP Operations Secret 1 - Standardized processes and strong P2P linkage Secret 2 - Visibility to track the “metrics that matter” Secret 3 - Superior levels of automation
- Document imaging/scanning
- Automated routing and workflow
Secret 4 - Strong process capabilities- Two and three-way matching
- Straight-through invoice processing
Copyright © 2015 - Ardent Partners Ltd.
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WHY MAKE THE CHANGE?
Automating AP simplifies invoice approval
AP teams no longer perform data entry
Teams become more strategic, instead of tactical
Significant cost-savings from operations
Able to capture more early payment discounts
• 36.7% annualized rate of return on 2/10, net 30 discounts
Copyright © 2015 - Ardent Partners Ltd.
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TRANSFORMING AN AP OPERATION
Engage all relevant project stakeholders
Understand business & technical requirements
Determine long-term goals & objectives
Align required resources
Understand the project’s budget constraints
Find an appropriate vendor
Copyright © 2015 - Ardent Partners Ltd.
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STRATEGIES FOR SUCCESS
Make the business case for AP automation
Collaborate with all affected stakeholders
Follow the lead of the Best-in-Class on processing
Examine scan-and-capture & document management as a first step toward full automation
AP metrics matter – identify and track the key financial, operational, and supplier indicators
Copyright © 2015 - Ardent Partners Ltd.
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Q&A
Matthew Delman
Sr. Payables Researcher & Sr. Content Strategist617.209.9756
[email protected] Twitter: @mattd_ardent
www.ardentpartners.com
Copyright © 2015 - Ardent Partners Ltd.
Ray Emirzian
Accounts Payable Solutions Evangelist518.836.2733
Twitter: @docstarsoftware
www.docstar.com/ap