1. © 2011 Financial Operations Networks LLC AP Automation Case Study: The Successes and the Challenges, Part II Amy Fine Levi Strauss & Co. Wednesday, April 13, 2011

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3. www.TheAPNetwork.com Page 3 Company History May 20, 1873 – Levi Strauss and Jacob Davis receive a patent for the process of riveting pants and the blue jean is born First factory opened in the South of Market area of San Francisco in 1880 1977 – Levi’s was the world’s largest jeans manufacturer Today Levi’s jeans are sold in over 160 countries Global Headquarters located in San Francisco, California

4. www.TheAPNetwork.com Page 4 Brands

5. www.TheAPNetwork.com Page 5 Shared Service Center – Eugene Oregon 1999

6. www.TheAPNetwork.com Page 6 Shared Services Center Indirect Requisition-to-Check – RTC Hire-to-Retire – HTR Order-to-Cash – OTC Record-to-Report – RTR

7. www.TheAPNetwork.com Page 7 Indirect Requisition-to-Check Invoice Processing GRIR Maintenance Travel and Expense Vendor Master Indirect Procurement

8. www.TheAPNetwork.com Page 8 Become a student of change. It is the only thing that will remain constant. — Anthony J. D’Angelo

9. www.TheAPNetwork.com Page 9 Invoice Processing Utilize different accounting systems for each country: Canada – Cedar Software Mexico – SUN Systems United States – SAP

10. www.TheAPNetwork.com Page 10 SAP Purchasing Guidelines SAP Procurement Process SAP Payment Request Corporate Card

11. www.TheAPNetwork.com Page 11 Uploads Advantage IQ – utilities for approximately 170 Retail Stores – 3 invoices a week compared to 170+ per month Staples – office supplies – average 50 invoices a week Serengeti – legal invoices 50 a week IQ Navigator – contract labor – large volume Granite – telephone – 215 invoices a month Rental payments – 200 invoices a month

12. www.TheAPNetwork.com Page 12 Service Channel – retail store maintenance OTM freight transactions that will not go through EDI JP Morgan Central Bill Weekly benefits Continually asking…Can this be on an upload? Uploads (Cont’d.)

13. www.TheAPNetwork.com Page 13 EDI CASS – for FedEx and UPS (1,800 invoices a month) Oracle Transportation Management – inbound freight from contractors (500 invoices a month) Outbound freight – freight from distribution centers to customers (2,000 invoices a month)

14. www.TheAPNetwork.com Page 14 Processors Were Spending Time: Entering invoices and payment requests from paper copies Often found that no goods or service receipt had been done Following up with requisitioners, often several times Batching invoices at the end of the day so that they could be scanned Responding to vendor and requisitioner payment inquiries

15. www.TheAPNetwork.com Page 15 Manual Processing Currently have six invoice processors Each can manually process between 600 and 1,200 invoices a month About 52% percent of invoices had been making it through to payment the first time touched Of the remaining 48%, 17% were duplicates and 31% had some type of problem

16. www.TheAPNetwork.com Page 16 % of Non-Trade Invoices Paid on Time

17. www.TheAPNetwork.com Page 17 Front-End Imaging September of 2009 received approval to begin a front-end imaging project Began RFP process in January 2010 Reviewed four different vendors Signed a contract with ReadSoft in June 2010 Go live date was February 28, 2011

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19. www.TheAPNetwork.com Page 19 Incoming mail goes directly to the Scan Room and are scanned into ReadSoft (IPA) Incoming e-Invoices are uploaded into IPA Invoices are separated into different categories and scanned into IPA The program displays the interpreted fields that can be compared to the scanned image The user makes the necessary corrections in verify so that correct categories are recognized

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21. www.TheAPNetwork.com Page 21 Invoice transfers to INVOICE COCKPIT by ReadSoft for processing Invoices without errors flow through system Invoices with errors will kick off a workflow Invoices are paid according to terms in the vendor master

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26. www.TheAPNetwork.com Page 26 Payment requests are entered though IPA WEB CYCLE (ReadSoft) Sent to an authorized approver through web-cycle Reviewed by an invoice processor and flow through the system for payment

27. www.TheAPNetwork.com Page 27 LOVE the new tool! It is intuitive and easy to use Requires no training Initial feedback from requisitioners:

28. www.TheAPNetwork.com Page 28 No more paper clutter Ability to electronically search for invoices Have visibility to PO right away Can enter invoice and save when partially complete Automated workflow Automated escalation of workflow Initial feedback from invoice processors:

29. www.TheAPNetwork.com Page 29 Image is easy to send Audit trail of communications within the tool Outlook email does not get full Initial feedback from invoice processors: (Cont’d.)

30. www.TheAPNetwork.com Page 30 Listen to ReadSoft about the timing of training Test! Catch up on invoice backlog before going live Lessons learned:

31. www.TheAPNetwork.com Page 31 Vendor portal for payment inquiries Add more vendors to EDI Create uploads where they make sense Global SAP What’s next?

32. © 2011 Financial Operations Networks LLC Thank You!