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Ariba Invoice and Payment Management
Chris Chase, Senior Manager, Ariba © 2011 Ariba, Inc. All rights reserved.
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Introduction Solution Overview What’s New What’s Coming Quadrem
Questions and Answers © 2011 Ariba, Inc. All rights reserved.
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Solution: Invoice Automation
Online Supplier Invoice Entry Online via PO-Flip™ Online Non-PO EDI, cXML, csv Buyer-defined business rules to ensure suppliers submit clean invoices Validation at supplier group level Digital signature (where necessary) Invoice Status Updates for Supplier Search for Documents Access to Country Guide OPTIONAL: e-Archiving Leading brand in ePayables Automation! Invoice Automation Buyer CSV POs Electronic Invoices cXML EDI Key Benefits Faster, low-cost supplier enablement in 10 days or less Global support in multiple languages and currencies and with support for local tax laws, enabling compliance with a broad set of regulations Fewer supplier inquiries for invoice and payment status, resulting in reduced supplier management costs Collaborative invoice presentment, validation, and dispute resolution that strengthens supplier relationships Increased value from your ERP applications by extending automation beyond your enterprise Access to over 200,000 suppliers in the Ariba Network for easier supplier discovery, connectivity, and collaboration
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Ariba Global Compliance
Argentina Aruba Bahamas Bahrain Barbados Bermuda Brazil China Columbia Costa Rica Dominican Republic El Salvador Guatemala Gibraltar Greece India Indonesia Jamaica Japan Korea Kuwait Mexico Nicaragua Panama Philippines Portugal Russia Saudi Arabia Slovenia Taiwan Thailand Vietnam UAE Virgin Islands 33 countries paperless e-Invoicing 34 countries cross-border or with paper backup Canada USA Puerto Rico Austria Belgium Cyprus Czech Republic Denmark Estonia Finland France Germany Great Britain Hungary Ireland Italy Latvia Luxembourg Netherlands Norway Poland Portugal Romania Slovakia South Africa Spain Sweden Switzerland Australia Hong Kong Malaysia New Zealand Singapore © 2011 Ariba, Inc. All rights reserved.
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Ariba European Compliance
22 of 27 of European countries covered by Ariba Invoice Iceland Sweden Finland Russia Found compliant and signed off by KPMG Invoicing for domestic trade must be In local language Norway Estonia Austria Belgium Cyprus Czech Republic Denmark Estonia Finland France Germany Great Britain Hungary Ireland Italy Latvia Luxembourg Netherlands Norway Poland Portugal Romania Slovakia Spain Bulgaria Lithuania Slovenia Latvia Denmark Lithuania Belarus Ireland UK Netherlands Poland Germany Belgium Ukraine Czech Republic Luxembourg Slovakia Moldova Austria Hungary Switzerland Romania France Slovenia Croatia Bosnia H-govina Serbia Bulgaria Montenegro Italy Portugal Macedonia Albania Spain Turkey Greece Cyprus © 2011 Ariba, Inc. All rights reserved.
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Invoice Professional Buyer Invoice Entry 3-way matching with receipt
Online Invoice Automation Buyer CSV Buyer Invoice Entry 3-way matching with receipt Approvals Exception Management Queue Management Reporting and Analytics Contract Compliance Contract Invoice Entry for Buyers and Suppliers 4-way matching with contract POs Electronic Invoices cXML EDI Key Benefits 70% reduction processing costs by reducing errors and manual corrections Automated workflow approvals that accelerate invoice handling Time savings through automated 2/3/4 way matching Streamlined contract compliance and reduced rogue purchasing Compressed invoice approval cycle times to maximize pre-negotiated discount capture Faster invoice entry for invoices that fall outside of the scope of electronic and conversion services © 2011 Ariba, Inc. All rights reserved.
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Invoice Conversion Services
Invoice Professional Paper PO box receipt Scan image Double key or OCR Quality control Create cXML Post to Ariba Network Exception reporting Provider management Quality exception resolution Procedural alignment Exception support ICS quick enablement Invoice Automation Buyer Paper POs Invoices Paper Paper Key Benefits Capture invoices from long tail suppliers Leverage Ariba workflow immediately day one 100% cost avoidance for scanning and OCR equipment Reduced mailroom costs Lower storage costs for paper invoices Easy access to invoice images stored electronically Facilitation of local archival requirements © 2011 Ariba, Inc. All rights reserved.
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Open ICS Problem: Solution (How it works): Benefits:
Plugging in a customer's own invoice conversion solution has historically been an option of last resort, customers need a productized alternative to Ariba services. A customer’s Finance (AP) and Procurement Organizations may not be aligned. A customer’s Finance (AP) Organization may have made recent investment in imaging or other invoice capture solution which they can not disrupt. Solution (How it works): Open ICS allows the customer’s system/provider to upload invoices to the Ariba Network. This may include “ICS” invoices, invoices processed via another invoice network, or via the customer’s own invoice capture solution. The following rules apply to this offering: The customer’s system/provider needs to align to our process (scanning, indexing, data entry occur all outside Ariba). The customer’s system/provider sends the Ariba Network full cXML invoice. Optional: customer’s system/provider may imbed scanned images as MIME attachments (up to 4 meg) into cXML invoice. Optional: The customer’s system/provider may elect to receive POs (in cXML format). Benefits: Customers can import ICS, EDI, or other invoices into Ariba. Customers can leverage Ariba’s workflow, contract compliance, and analysis Customers can provide suppliers with visibility of all invoices © 2011 Ariba, Inc. All rights reserved.
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Ariba Invoice Management Focused on “Fully Loaded” Cost Take-Out
Avg. Fully Loaded Cost/Invoice* = $21.86 Approvals PO Match Top Down Savings - Reduce Exceptions - Reduce Approval Time - Reduce Supplier Inquiry “Fully Loaded” Cost/Invoice (Cost of AP/# of Invoices) Receipt Match Exceptions Supplier Inquiries Invoice Entry Avg. Invoice Delivery Cost/Invoice* = $1.10 Initial Validation Cost/Invoice (Receipt of Invoice Cost) Quality Exceptions Bottom Up Savings - Reduce Cost of Receipt - Reduce Cost of Entry - Reduce Scanning Cost Paper Routing Mailroom * Sources: Multiple Metric Sources © 2011 Ariba, Inc. All rights reserved.
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Payment Automation: Remittance Delivery & Payment Status
Buyer’s Bank Supplier’s Bank ACH NACHA CTX Reconciliation and Visibility Remittance delivery to supplier via portal, , EDI, VAN, cXML Remittance may refer to any invoice Related document link if invoice in Ariba Payment Interface with Buyer ERP Solution based on ERP payment run Standard integration with SAP, Oracle, PeopleSoft Payments / Remittances Buyer Payment Status Remittance Advice Benefits Improved visibility to payment status Improved payment reconciliation Fewer lost remittances Reduced inquiries costs related to remittance reconciliation © 2011 Ariba, Inc. All rights reserved.
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Payment Professional: Payment Automation with ACH
ACH NACHA CTX Buyer’s Bank Supplier self-service portal PreNote validation Supplier remittance name, address and bank account changes Unlimited buyer bank accounts Pay any supplier/any invoice ACH bank transmission Reconciliation and visibility Exception handling ACH return processing Supplier’s Bank Payment Instructions ACH Return Buyer Bank Account Management Payment Status Remittance Advice Key Benefits Improved payment accuracy More timely payments Fewer lost payments Improved visibility of ACH processing errors Better ACH penetration/incentive for eInvoice adoption Eliminates bank account management costs and security risks (SOX) © 2011 Ariba, Inc. All rights reserved.
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What’s New 10S Series Feature Summary
10S2 Q4 2010 AN49 Q1 2011 Buyer Invoice Entry Improvements Line Level Credit Memos Workflow Improvements Invoice Approval Flow Enhancements IR Validation Workflow Improvements /PDA Approvals New Groups For Improved Business Control Workflow Matching/Exception Improvements Support for ERP 2 way-matching in InvoicePro Improved tolerance settings for exception management Indirect Tax Improvements VAT handling for 0% tax rate Flexibility for Tax Detail Extrinsics Analysis and Reporting Improvements Working Capital, Terms, and On-time Payment Reporting Reporting on User-Defined Fields Invoice Management Amounts in Local Currency Consistent approach to display “Tax Invoice” Allow suppliers to submit self-signed invoices Invoice Conversion Services Increase invoice attachment limit to 10mb Exception Management Improvements Data Capture Improvements eArchiving Human Readable PDF View of Invoice Automate delivery of Invoice Archive files Ariba/Logica e-Archive Service Payment Management ACH integration with BNY/Mellon
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Invoice Approval Flow Enhancements
Problem Old OOTB workflow need improvement Not an effective baseline Excluded Non-PO Built off of Invoice Document rather than Invoice Reconciliation Document Solution Optimized approval process based on best practices collected inside and outside of Ariba Addresses PO and Non-PO workflow routings Repositions AP to address exceptions before passing to business users Aligns to new requester defaulting capability Exception handling for broken chain of command relationships Benefits Faster deployments Increased deployment, engineering and support scalability Improved quality Better support for both large buyers and mid-market invoice channel partner Accelerates move to blueprint-based deployment methodology Change impact For old customers, none For new customers, the new default approval processes are active OOTB Ariba must represent new process and underlying business rationale for why it is an effective process. © 2011 Ariba, Inc. All rights reserved. 13
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IR Validation Workflow Improvements
Problem Buyers receive the majority of their Non-PO invoices without any accounting coding. The role of AP in most shared services organizations is to screen invoices and resolve the exceptions; not set accounting. The business users that approve invoices determine the right account coding after AP screens inbound invoices. Prior to 10S2 SP1, AP needed to establish dummy accounting to get past validation errors when resolving exceptions and problems with invoices. Solution Ability for Invoice/IR exception handlers to address Non-PO invoice exceptions (invalid requester, missing supplier master record, remittance matching error, etc.) before the invoice is passed to appropriate business users who will apply account coding to the invoice. A new group, “Invoice Header Editor”, is now available. Members of this group can reconcile exceptions and are only required to edit header-level fields. Benefits Eliminates need for AP exception specialists to address accounting validation errors on invoice Faster processing of Non-PO invoices Better alignment of OOTB functionality with the needs of most shared services organizations © 2011 Ariba, Inc. All rights reserved. 14
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What’s Coming - 11 Series Feature Summary
11s1 Q2 2011 11s2 Q3 2011 11s3 Q4 2011 Enhanced Multi-Fact Reporting SAP Company Line Level for Non-PO* Improved PO Lifecycle Reporting Withholding Tax on Invoices Rejection Handling Improved Supplier Notifications Country-specific Business Rules Scheduling of e-Archiving Withholding Tax Rejection Handling Order Information Optional for Non-PO ICS: PO line level determination Improved payment and invoice exception handling Scandinavian languages, Russian, Polish and Hungarian* * Will be delivered prior to release in Service Packs © 2011 Ariba, Inc. All rights reserved.
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Support for Scandinavian Languages: Russian, Polish and Hungarian
Norwegian Swedish Danish Russian Polish Hungarian * Not a member state of the EU © 2011 Ariba, Inc. All rights reserved.
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Improved Operational Reporting through Multi-fact
Problem Prior to 11S1, it was not possible to report across FACT tables in Aribamaking the following types of reporting difficult: Exception Workflow: Enable reporting of the last and current invoice exception handler and the date of the most recent/last update Approval Workflow: reporting of the user currently approving or has approved an invoice Accounting differences between PO and Invoice Solution Ability to create reports with up to three joins. UI improvements related to multi-fact report creation needs Benefits Better analytic information to analyze what, why, and how long invoices are wedged in the invoice workflow Better reporting to support approval history reporting to support SOX and audit requirements Better information reporting to support accruals © 2011 Ariba, Inc. All rights reserved. 17
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Country-Specific Business Rules
Problem New accounts are often created on the network by buyers that need to handle country- specific rules since many sellers need to enforce different rules based on the country from which they are selling from – and a seller can only belong to one supplier group on the network. Keeping track and choosing the correct account for the same buyer causes cost and a problem for sellers that are a multi-national seller for a buyer Maintenance of multiple accounts causes cost and a problem for buyers Solution Introducing country-specific rules for buyers: Country-specific rules override supplier group rules in the same way that supplier group rules override the generic transaction rules in previous releases Country-specific rules can be created for any country Generic Transaction Rules Supplier Group Rules Country Specific Rules © 2011 Ariba, Inc. All rights reserved.
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Add Support for Withholding Tax
Buyer Seller Tax Authority Products and Invoice Money Withholding tax is paid directly to the tax authorities by the buyer on behalf of the seller. Withholding tax is mandatory in countries such as Spain, Mexico and the Philippines for sellers who are self-employed, or categorized as liberal professionals. The withholding tax amount is subtracted from the invoice’s amount due. © 2011 Ariba, Inc. All rights reserved.
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Quadrem Our strategy and vision is to support e-Invoicing globally and now that we have Europe under control, we are now turning our attention to Asia and Central and South America. Tax compliant e-Invoicing in Brazil and Mexico is possible, however, Ariba has some work to do to support the requirements is these countries with a paperless solution. All options were on the table to make this happen (make, buy, or partner). We have a number of suppliers issuing invoices from these countries, mostly cross-border or with a paper back-up. We recently received KPMG's research regarding the local e-Invoicing requirements in detail in Brazil to support our South and Central American strategy development. What's new... Clearly Ariba's acquisition of Quadrem is evidence of the above strategy. We are eager to engage with Quadrem and determine the best approach to leverage their knowledge, experience and assets with respect to Brazil. Invoice Conversion Services for Quadrem © 2011 Ariba, Inc. All rights reserved.
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Questions © 2011 Ariba, Inc. All rights reserved.
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“Safe Harbor” and Confidential Information Statement
This information reflects the status of Ariba solution planning as of January All such information is the Confidential Information of Ariba (per the contract between our companies), and must not be further disclosed, as stated in the confidentiality clause of that contract. This presentation contains only intended guidance and is not binding upon Ariba to any particular course of business, product strategy, and/or development. Its content is subject to change without notice. Ariba assumes no responsibility for errors or omissions in this document. Ariba shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials. © 2011 Ariba, Inc. All rights reserved. 22
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Ariba Invoice and Payment Management
Chris Chase, Senior Manager, Ariba © 2011 Ariba, Inc. All rights reserved.
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