mnccc 2016- account payable trends for local government
TRANSCRIPT
2016: Account Payable Trends for Local Government
2
The AP trends of 2016
trend #1Cloud
momentum
trend #2Reporting
visibility
trend #4Mobile
processing
trend #5E-invoicing penetration
trend #6Outsourced payments
trend #3Centralized Invoice
Receipt
Cloud
4
of all organizations are planning to move to a cloud-based accounts
payable system in the next two years.
Cloud is growing
Source: IFO 2015
Cloud penetration is close to
100% 24%
5
Development is stable
Cus
tom
ers
You need to stay ahead of the complexity curve
Orders
Invoice complexity
SaaS
On Premises
6
Myths vs Reality
Unstable Myth Stable RealityA passing trend
Limited functionsFocused on SMBs
Low reliability IT unfriendly
Growing at 40% per yearEasily customizableScalable to any size
Fewer disruptions than in-houseReduces tactical maintenance
vs
7
Cloud simplicity
5 Quicker ramp up time
4 Lower cost per invoice
3 No software or hardware
2 Minimal IT involvement
1 Little or no capital investment
Source: IFO 2015
Visibility
9
AP departments put visibility surprisingly high in their list of priorities:
A major challenge?
Lack of visibility into invoices and payables information
45%
Difficulty handling, managing and finding invoices
42%
Costs to process invoices are too high
38%
Maximizing vendor discounts
17%
Source: IOFM 2014 Controller’s Report
10
challenge #1Key information
not captured
challenge #4Badly integrated
systems
challenge #2Poorly organized
data
Because there’s an information hole
challenge #5No access for
decision makers
challenge #3Information not timely
11
Source: Ardent Partners 2015
Identified or negotiated savings
Enterprise goals and objectives
% of spend under management
Booked savings
Enterprise spend
59%
56%
55%
50%
50%
"Strong Visibility"
The need for better visibility into spend
12
Faster turnaround
Better process transparency
Better auditing
Staff reductions
Fewer invoices "lost in the loop"
Enhanced supplier relationships
More early-payment discounts
Fewer payment errors
Fewer disputes
Ability to outsource
0% 5% 10% 15% 20% 25% 30% 35% 40% 45%Source: AIIM
Biggest benefits from AP automation
Centralized Invoice Receipt
14
Centralized invoice receipt
Fax
e-invoices
e-mailMail
[email protected] Mail Box
Primary Contact
PotentialBottleneck
Benefits:
- Understand Outstanding Liabilities- Accurately Diagnosis Issues- Identify Process Weakness
Mobile
16
Deployment is becoming standard
Source: IFO 2015
of all organizations are planning to deploy mobile capture and approval of invoices in next two years.
28%
17
Introducing mobile
Align with key workplace trends
Speed uppayments
Support BYOD policies
Increaseaccuracy
E-invoicing
19
E-invoice transmission
X
20
Implement in 12 Months
16% 13%
29%
Currently Using
49%
21% 22%
Move to e-invoicing
Invoice Receipt Management Report 2015: PayStream Advisors Report
Front-End ImagingOCR/Automated Data CaptureE-Invoicing Capability/Network
21
The opportunity is hugeCurrent situation
of organizations report no more than
55%
of invoices achieving true straight-through status
5%
Desired situation
of organizations report more than
5%
of invoices achieving true straight-through status.
75%
22
Most organizations believe AP is the most manual F&A functionYet…
And organizations are ready to act
Most organizations believe AP is the F&A function best suited for automation
23
Six supplier focused strategies
Target All SuppliersAvoid focus entirely on big
suppliers. The idea they provide most invoices is losing face.
Supplier Focused SolutionGet diverse sending options
and supplier-focused features at no cost
Automate at Consistent PaceUnderstand some suppliers need to evolve to e-invoicing
over time
Invoice Receipt Method Diversity
Allow suppliers to choose different invoice methods as
on-ramp to automation.
Find B2B Network with Supplier Value
Look for self-service functions and information
transmit options.
Implement Additional Invoice ManagementReceiving e-invoices is
step one: think matching, approval, payments etc.
Invoice Receipt Management Report 2015: PayStream Advisors Report
24
Types of supplier network models
MODEL SUPPLIER RESISTENCE LEVEL
SUPPLIER % OF SPEND MODEL• Buyer pays implementation fee• Supplier pays a % of spend• Buyer pays a per invoice fee
HIGH
SUPPLIER FLAT FEE MODEL• Buyer pays implementation fee• Supplier pays flat monthly fee• Buyer pays a per invoice fee
MODERATE
SUPPLIER FREE MODEL• Buyers pays NO implementation fee• Supplier pays nothing• Buyer pays a per invoice fee
LOW
25
Paper to Electronic
50
50
100%
0%
50%
25%
75%
1 Year 2 Year
E-invoicing
Paper Conversion
10
90
30
70
E-invoicing
Paper Conversion
Payments
27
General Business Advantage
Leverage Rebates
Card = 13,000 annual payments (26%)
Payment Composition
Check
Card
ACH
CheckCard
ACH
Drive down costs
x 1.3% AP card rebates_______________________
$19.5m @ $1 ,500/payment
$253,500 Annual rebate
28
Outsourced payment processing
2016 will see:PaymentOutsourcing supplier payment will lead to:
Lower payment costs
Extra working capital finance at lower rates
Reduced risk from volatile supply chain activities
Increased access to supplier discounts
Easier administration and reporting
Extra working capital flowing through system
Tighter bonds between business partners
Summary
30
The AP trends of 2016
trend #1Cloud
momentum
trend #2Reporting
visibility
trend #4Mobile
processing
trend #5E-invoicing penetration
trend #6Outsourced payments
trend #3Centralized Invoice
Receipt
About Corcentric
Eric Kallies(856) [email protected]
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