Ontario Local Chapter Meeting Automate Invoice-to-Payment Cycle Unlock Your Working Capital.
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Transcript of Ontario Local Chapter Meeting Automate Invoice-to-Payment Cycle Unlock Your Working Capital.
2Agenda
Introduction Overview of VersaPay What Are Your Challenges? The State of A/R Today The 4 Universal P’s of A/R Automation Trends Opportunities and Approaches Carving A Path Forward
Your Speakers
Mislav Majic, Managing Director Solutions
John McLeodVice President Marketing
Source: Crone Consulting LLC – The Next Wave In Payments
VersaPay Overview
VersaPay is a financial technology company that delivers cloud-based payment solutions for businesses
Founded in 2006
Ranked #1 in Profit Top 50 in 2009
IPO on the TSXV January 2010 ; $26.M Mkt. Cap. Today
Two business units: POS Merchant Services & Solutions1. POS is a profitable mature business2. Solutions: cloud-based services to transact electronically
Strategic partnerships TD Bank Heartland Payment Systems MasterCard
5Pain Points
What Are The Pain Points You Are Experiencing? Days Sales Outstanding Too High?
Working Capital Challenges?
Volumes Customer Inquiries?
Matching payments to invoices too time intensive?
Greater Visibility Into Invoices?
PCI Compliance?
The State of A/R Today
Invoices are generated by ERP system
For large customers… Invoice data is delivered electronically via EDI
For smaller customers… Paper or PDF copies are mailed or emailed
The payment process is not visible to the supplier
Follow-up by email or phone
Payment received by check or EFT, wire and credit card
Payments are manually matched and entered into ERP
The State of A/R Today
Many manual steps
Error-prone and cumbersome
Time consuming
In other words…
"we do it the way we have always done it”
A/R Process:
Invoices are mailed, emailed, faxed or online
Follow-up by phone or email
Payments are customer generated
Check, EFT/ACH, wire and credit card
Manual reconciliation
Supplier ERP
System
Customer ERP
System
4 Universal P’s of AR Automation
Presentment
Given the interactive power of the Internet … invoice data no longer needs to be static
Added value for Customers
Builds stickier relationship
4 Universal P’s of AR Automation
Permission
Establishing secure, authenticated access to the invoice information and payment options
Enable preferred payment instruments controlled by Supplier
Funding sources specified, verified and managed by authorized customer
4 Universal P’s of AR Automation
Linking Presentment and Payment:
Cost savings and electronic settlement
AR automation drives value by matching customer payments to invoices
Suppliers will reduce costs of acceptance, dispute resolution, reconciliation and
fees
AR Automation has to support all payment channels
4 Universal P’s of AR Automation
Posting:
Automated reconciliation
Minimizing manual, error prone processes
Reduce/eliminate expensive and error prone Lockbox process
Maximum cash management benefits by accelerating electronic payment acceptance
Why Now?
Trends Laying Groundwork for Change
Navigating Complexity – Finance Groups Streamlining processes will deliver exceptional value
CFO’s increasingly focused on business transformation to build value
Cloud computing can enhance finance function’s performance
Finance more involved in strategic initiatives like customer experience
Accenture Report: Accenture 2014 High Performance Finance Studyhttp://www.accenture.com/us-en/strategy/Pages/index.aspx
Why Now?
1 2012 Remittance Survey of 662 AR, treasury, AP, purchasing, procurement, and accounting professionals (n=662). 2 Suppliers’ Acceptance of Card Payments. First Annapolis Consulting. August 2013.
of business respondents have moderate to high interest in using more electronic payments.1
include card-related terms in contracts — more than 2X the number just 4 years ago.2
of businesses include card-related terms in RFQs.243%
50%
92%
Primary Cost Reduction Opportunities
Outbound and inbound processing
Outbound and inbound float
Automating customer care
Payment mix management
Source: Crone Consulting LLC – The Next Wave In Payments
Primary Cost Reduction Opportunities
Outbound processing
Invoice & statement production
Sorting/preparing/mailing/postage
Omni presentment requirements
Storage and accessibility
Source: Crone Consulting LLC – The Next Wave In Payments
Primary Cost Reduction Opportunities
Inbound processing
Receive & retrieve lockbox
Envelope extraction Sort by payment type
(full, multi, partial) Process Exceptions Balance Batch Post to A/R
CPU A/R Update Reporting Clearing Costs Bank Fees Processor Fees Payment Processing Other
Source: Crone Consulting LLC – The Next Wave In Payments
Realize A/R Process Efficiencies
Redirect A/R staff to Higher Value Work
Accounts Receivable PerformanceDoing Ok is no longer good enough www.apqc.org
Automation supports greaterproductivity
Greatest Benefits of eInvoicing
PayStream Advisors: 2014 Invoice & Workflow Automation Report http://www.paystreamadvisors.com/
Primary Cost Reduction Opportunities
Outbound float
Mailing float and customer aging of receivable 5-40 day
Monthly batch processing for account update 1-5 days
Statement rendering & printing 1-5 days
Folding insertions, stuffing, metering, sorting 1-5 days
Source: Crone Consulting LLC – The Next Wave In Payments
Primary Cost Reduction Opportunities
Inbound float
Mailing float 1-5 days
Extraction, preparation & remittance processing
float 1-3 days
Clearing float for deposited checks 1-5 days
Source: Crone Consulting LLC – The Next Wave In Payments
Problems Leading to Late Payments
PayStream Advisors: 2014 Invoice & Workflow Automation Report http://www.paystreamadvisors.com/
Primary Cost Reduction Opportunities
Automating customer care
10% to 40% of business invoices disputed
Disputes slow down payments, increasing DSO
On-line disputes est. to be 50% less expensive
Collaboration ensures prompt dispute resolution/pay
Automated payment acceptance is simpler, faster
Source: Crone Consulting LLC – The Next Wave In Payments
Improve Customer Interactions
Errors Corrected Faster
Accounts Receivable PerformanceDoing Ok is no longer good enough www.apqc.org
A/R Teams Redirect Efforts
Reduce DSO
Improve Working Capital
Primary Cost Reduction Opportunities
Payment management mix
Online payments versus offline Currently costs $0.75 to process each “inbound”
remittance This included processing for cheques, customer initiated
EFT/ACH, wires and credit cards Bank fees can be quite costly
Auto pay is the lowest cost of acceptance
Intelligent credit card acceptance can be second lowest form of acceptance
Source: Crone Consulting LLC – The Next Wave In Payments
Value Proposition Supplier Buyer
Payment process improvement Automates payments/reduced collection efforts
Eliminates cheques/postage costs/processing errors
Cash Flow improvement Reduces DSO and improves working capital
Potentially increases DPO/Float/Control
Improved customer/supplier relationship
Buyer payment of choice/preferred supplier
Suppliers paid quicker/reduced collection costs
Reduced risks Can lower bad debt ratiosOnline reporting with full audit trail
Positive impact to balance sheet Less reliance on other credit facilities (loans, margins)
Provides additional financial flexibility
Source: Visa
Intelligent credit card acceptance
Unlocking Working Capital
Reduced float time = access your capital sooner
Optimize customer care = access your capital sooner
Reduce time to resolution = access your capital sooner
Make it easy to pay = access your capital sooner
Reduced bad debt = access your capital sooner
Reduced payment processing costs = access your
capital sooner
SUPPLIERS BUYERS
Collaborative platform for B2B ecommerce
Easy integration Accelerates payments Eliminates manual effort Reduces cost
Improves Customer Experience Easy to use Eliminates paper and manual
processing Choice of secure payment options Provides complete audit trail
Versapay ARC
Let’s move A/R forward
Delivering an end-to-end STP process for A/R is more feasible today than ever before
The problem may not be pressing, but the payback is compelling
There is customer demand for it
Leverage cloud-based tools and payment provider capabilities to get results quickly
VersaPay ARC can help
Future Session Topics?
What other AR topics are you interested in? Download this presentation at
www.versapay.com/ifo