The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 6/1/2016

“Going from Good to Great”

Dennis Cooper, Vice President,

Accounts Payable Operations

PNC Financial Services Group

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 2 6/1/2016

ABOUT PNC BANK

PNC is one of top 10 largest banks in America providing deposit, lending, cash management and investment services to more than six (6) million consumers and small business customers across nineteen (19) states and the District of Columbia.

Multi site Team located in Cleveland Operations Center and Pittsburgh Allegheny Center

Accounts Payable department has earned Accounts Payable Department Certification through The Accounts Payable Network

80% of team earned an Accredited Payables Specialist (APS) or Accredited Payables Manager (APM) certification.

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 6/1/2016

P2P Top Performers

based on overall efficiency & effectiveness

Efficiency Drivers

Cost per Transaction

Span of Control

Invoice Processing Cycle

Time

% of Electronic Transaction

Level of Automation

Effectiveness Drivers

On Time Payment Rate

Level of Centralization

Training Investment

Streamlined Transaction

Strategy

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 4 6/1/2016

Changes ahead for PNC Accounts Payable Process

Building strong analytic team:

Stronger risk and control oversight

Opportunity to identify areas to

improve AP as profit center:

Interchange revenue, Recovery

Audits, discounts

Continue process improvement

Defined Payment Strategy

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 5 6/1/2016

Accounts Payable – Profit Center

Travel & Entertainment Credit Card

Administration • Policy Compliance • Training – Employee On-Boarding • Credit Card Limit Evaluation • Maximum Credit Card Usage –

Interchange Revenue

Executive Level Reporting • to Line of Business(s)

P-Card Program Administration • Policy Compliance – P-Card

preferred payment method • Communication – Benefits of

payment instrument, interchange revenue

Executive Level Reporting • Track success

Finance Treasury Management

Line of Business(s)

Finance Treasury Management

Sourcing

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 6 6/1/2016

AP Strategy

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 7 6/1/2016

Strategy Benefits

Controls

+ Provide better quality controls

+ Gain visibility into accruals and liabilities with better reporting

+ Better management of cash flow and overall payment disbursement process

= Reduced Risk

Efficiencies

+ Enable Accounts Payable to ensure that invoices received monthly are processed and/or accrued

in the proper calendar period

+ Alignment AP with today’s industry standards; Recent survey conducted by Institute of Financial

Operations indicated 71% of respondents currently work in a centralized environment

+ Leverage electronic invoicing technology to reduce operating cost and improve processing

efficiency

= Increased accuracy with lower cost

Employee

+ Improve employee experience by eliminating user’s time spent on prepping and entering invoices

+ Increase job satisfaction by converting several members of the AP staff from specialists to analysts

= Stronger, more efficient workforce

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 8 6/1/2016

Accounts Payable - Goals

PEOPLE

Create multi-task environment to improve

productivity & job satisfaction

Develop analytic team

PROCESS

Consolidate & Diversify Credit Card Program(s)

Centralized invoice receipt

TECHNOLOGY

P2P

Business Intelligence Tools

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 9 6/1/2016

AP Audit Recovery – Top Performers

Average AP Recovery by Type

Top Performers recover twice

the value through AP

recovery audits compared to

peers [VALUE]%

[VALUE]%

[VALUE]%

[VALUE]%

[VALUE]%

[VALUE]%

[VALUE]%

0 5 10 15 20 25 30

MISSED PAYMENT DISCOUNT

MISSED REBATES

SALES & TAX RECOVERY

PURCHASE RETURNS

PRICING ERRORS/OVERPAYMENT

UNCOLLECTED CREDIT MEMOS

DUPLICATE PAYMENT

System functionality to detect & report on recovery / error / fraud risks (Percent of Participants)

Payment Analysis Tool

Core ERP Functionality Enabled

Ongoing Compliance Monitoring Solution

53% 87% 67%

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 10 6/1/2016

Dynamic Discounting Management

• Allows cash to be invested safely at rates that can significantly exceed returns from traditional investments (S&P 500, capital purchases)

• Standard discount (Net 10, 2% discount) translates to an annual savings of almost 37%.

The Accounts Payable & Procure-To-Pay Conference & Expo is produced by: 11 6/1/2016

Dynamic Discounts Facts

What

Early payment offers on all approved invoices awaiting payment

Sliding Scale – discount decreases with the passage of time

Static - discounts spread over 30 days, making virtually all invoices paid in 29

days or less are eligible for a discount.

Why Saves money on invoices that are approved quickly

(Generated directly from a purchase order, originating electronically via EDI, vendor

portal, or e-Invoicing network)

How

Technology is the key

User-friendly interface that brings buyers and sellers together with ease

Allows flexibility on both sides of individual transactions to benefit by

capitalizing on early payment discounts on a larger scale.

Funding for sliding scale dynamic discounts usually comes from a buyer’s

working capital, although banks, and third parties are becoming more involved

as word of available returns and relatively low risk spreads.