Presentation on theme: "Electronic Invoice Presentment and Payment (EIPP): Streamlining the Payment Process... Presented by: Scott Hesse August 9, 2010."— Presentation transcript:
Electronic Invoice Presentment and Payment (EIPP): Streamlining the Payment Process... Presented by: Scott Hesse August 9, 2010
Post Lunch wake up…. Old McPayments had a farm. EIPP-O And on his farm he processed invoices EIPP-O Paper was here and paper was there.. here a paper there a paper everywhere was paper paper Old McPayments had a farm. EIPP-O On his farm he wrote many checks EIPP-O Write them up, stuff them in. stamp them up, mail them out Old McPayments had a farm. EIPP-O Old McPayments saw the light EIPP-O He knew lectronics was the way to go EIPP-O E-Invoice here, Present and pay there, invoices gone, checks no more, ACH came through the door Old McPayments had a farm. EIPP-O
Agenda Payments: Today Electronic Invoicing… A brief history. What is EIPP? What does EIPP offer organizations? Who needs EIPP? What is the cost of paper? How might EIPP integrate with a states current systems? How does EIPP work? Questions
Payments Today 2003: U.S. Federal Reserve cuts check-processing offices in half; shrinkage continues. 2003: Check 21 Act: Stop the flow of paper checks. –Digital images of checks –Substitute checks 2004: Electronic payments outpace checks Electronic payments have doubled since 2000. Contactless technology –Car key, camera, watch, mobile phone –Go-Tags –Digital wallets Are cards needed? –Embossed letters no longer needed –No account number on card eventually Goals: Speed up payments and reduce societal dependence on paper.
History Electronic Invoicing began in the early 1960s in the US. –The first iteration of EIPP came from the railroad industry in the form of EDI. Retail leads the way. First UPC Code scanned in Troy, OH in 1974. First EDI standards developed in early 70s with ANSI X12 standard being adopted in 1981 Emerging technologies… imaging, Internet, collaborative networks
A collaborative web-delivered payment network Online bill pay for business transactions Participants: Buyers (State/Agencies) Sellers (Suppliers) Third Party Stakeholders All parties review and manage their transactions over the Internet Program benefits equitably applied to all parties What Does EIPP Offer?
EIPP Benefits Eliminate no-value touch points in the invoice receipt process Control over same day invoice receipt and faster processing (maximize touch-less processing and routing) Eliminate/reduce exception handling with Pre-payment Audits Expand front-end discounts Faster payment processing best positioned for card product payment, rebate and/or dynamic discounting Earn Procurements negotiated discount terms Generate incremental discount terms and rebates to become profit center Value Add: Exception reporting for core resolution Source: The Accounts Payable Network (TAPN), August 2010
Who Needs EIPP? Economic downturns / Short-staffed/Budget shortfalls High percentage of paper (Invoices and/or Checks) Legacy Accounting/Finance systems Planned or currently implementing new ERP Multiple locations Limited or dated reporting capabilities High volume of transactions Complex Transactions: Data Capture Line Item Detail (GL Account Number) 3-way matching (Order/Invoice/Receipt)
Fast Facts 1: The Cost of Paper Paper is The Rule –79% of invoices received manually –63% of payments made manually Significant Performance Improvement –Cost to process an invoice –2004: $34 –2006: $22 –2008: $14 In the past 2 years, role of A/P has become more strategic in 56% of agencies. 18 months ago, 40% of agencies believed A/P was playing a more strategic role. Source: The Aberdeen Group A/P Strategies for Success October, 2008
Fast Facts 2: The Cost of Paper Paper invoices cost 74% to 89% more to process than electronic invoices. Over 60% of agencies lack visibility into primary A/P spend and invoice data. 40% of agencies indicate they have the budget and intent to invest in A/P automation solutions in the next for 12 months. Specifically, research by Aberdeen estimates that fully automated operations can save $10.87 per payment – approximately $1.1 million in savings for agencies processing 100,000 B2B payments per year. Source: Aberdeen Group: The E-Payables Benchmark Report Advancing Accounts Payable Automation, March 2007
How Does EIPP Integrate? Supplier Trade Documents Invoices State/Agency Trade Documents Contracts, P.O.s, Receipts A/P Data Electronically to State ERP A/R Data to Supplier ERP Exception Collaboration Automated Prepayment Audits State Business Rules State Accounting Policy Compliance On Demand, Networked, Internet Access Solution Online Collaborative Network
6- Payment with Detailed Remittance data 7 - Analysis EIPP Process Flow example Buyer 4 – Invoice Approval 2 – Invoices (electronic or paper) 3 - Audit State or Agency 5 –Posting data To ERP system Seller 1- Orders for Goods or Services 1b – Reference Doc Audits (e.g. orders, receipts) Shared Service or EIPP Network
EIPP Features Invoice Lifecycle Receive Receive, process & load all supplier invoices, paper or electronic Present Present invoices electronically, including line item detail, in queryable format Audit Identify billing errors prior to payment through automated business rules Add reference documents, such as orders or receipts, for robust line level audits Approve Manage multiple levels of approval, as well as disputes & adjustments Enforce state/agency policies & maintain detailed audit trail Pay Pay suppliers across currencies & payment methods via a single, electronic process Post Automate and verify accounting code allocations before posting Load electronic payment & accounting detail into general ledger Analyze Leverage robust data & tools for enhanced financial, process & supplier analysis
Wheres the puck??? A reporter was interviewing Wayne Gretsky and he asked: "Why are you always where the puck is?" Wayne answered: "I'm not. I'm where the puck is going." Electronic Invoice Presentment and Payment is where the Payment Puck is going!
Questions Electronic Invoice Presentment and Payment (EIPP): Streamlining the Payment Process... U.S. Bank Scott Hesse, Corporate Payment Systems Public Sector firstname.lastname@example.org 240-420-1992 U.S. Bank Scott Hesse, Corporate Payment Systems Public Sector email@example.com 240-420-1992