1 of 6

OUTLOOK

Payments: Necessary Within a P2P Solution In most cases, procurement doesn’t have the role or responsibility to perform actual payments to suppliers. But it does have responsibility with its suppliers to make sure they’re paid in a timely and proper manner.

OUTLOOK

The responsibility of making payments rests primarily within accounts payable, but since AP and procurement organizations are closely linked, the importance of a comprehensive and unified approach to managing the full extent of spend (payments included) across the entire organization has become a “must” for leading organizations.

Coupa calls this business spend management. We just call it smart.

2 of 6

OUTLOOK

Challenges to Consider with a Payment Solution

Before exploring how a unified P2P solution can play a broader role in improving core payment processes, it’s valuable to frame some underlying payments challenges that many organizations, including the majority of Global 2000 firms, face today.

These challenges compound and manifest in both financial and operational cost impacts.

• Financial impacts include limited or no opportunity to deploy an early payment program at scale, discounts not taken by suppliers, cash forecasting and management ability curtailed, duplicate payment risk increased, unnecessary impact on working capital (based on cash buffer requirements), and sub-optimal financing and payment terms.

• Operational impacts include unbalanced accounts payable workloads/resource requirements; inaccurate clearing visibility/information guiding reporting incorrectly; inaccurate spend, supplier and payment master data (which limits reporting to drive strategy and working capital optimization); and increased supply risk.

9Lots of payment rails (checks, credit card, bank transfers)

9Payments are sent to many countries

9Many payments are managed manually

9No (or limited) controls to ensure payments are made based on negotiated terms

9Payment processes are dynamic

9Payment runs are batch (not real-time)

9Daily payment activities are often managed at a local level

9Payments can be delayed by processing errors or a lack of visibility

9Returned, duplicate, and other payment errors are common

9Limited strategic internal coordination around dynamic discounting

9Most suppliers are unable to accept discounts or receive early payment

3 of 6

OUTLOOK

A Unified Payment Solution Should Consider...

Payment solutions should focus on the outcome and providing a broader toolbox around payment process management and reconciliation for buyers and suppliers alike.

The following chart shows what steps and activities should be considered as part of a unified approach to payments. Let’s not forget that the success of payment and financing processes requires that AP, treasury and procurement work together.

The Standard 6-Step Invoice-to-Reconciliation Process

Step 1

Supplier Set-Up including profile creation/management, tax and banking data, integrations (system and payments), etc.

Step 2 Step 3 Step 4 Step 5 Step 6

Receive Enter Information Validate & MatchDispute

ManagementPayment & Cash

Management

Key Activities Key Activities Key Activities Key Activities Key Activities

Receive electronic or paper invoices

Matching and pre-routing (for “true”

electronic)

OCR and AI for partial electronic (PDF,

email)

For paper:

• Mail opening and routing

• Additional information entry to indicate document receipt

• Pre-sorting• Physical delivery• Imaging where

necessary

Input or integration of invoice data into

payables system including summary

invoices

Receipt and purchase order downloads for two, three, or n-tier

match

Account downloads from the ledger to the

A/P system

A/P verification/approval of invoices

and related data

Manual processing of rejected items or

automated processing (or pre-processing in a supplier network)

Tolerance management

according to policies

PO conditions matched by buyer or

contract

Line-item matching

Exception reporting

Early payment process management

or presentation

Discount calculation

Payment authorization

ID discrepancies, which often include

price or quantity differences, short pay, missing or invalid PO

numbers

Other dispute items most often include on-time delivery,

receiving/quality, etc.

Notification of discrepancies to

buyers, originators, receiving, etc.

Prepare cash recovery, discounts,

credit notes, etc.

Payment planning by method:

• EFT integration• Outsourcing

check preparation

Ability to stop payment if a new or existing discrepancy

has been logged

Full system-based visibility of all pending

payments

Payment mechanism:

• Check preparation, handling, sorting, stuffing activities

• Mailing (paper) or electronic/EFT

4 of 6

OUTLOOK

In addition, there are some payment integrations and process considerations outside of facilitating an actual payment alone.

Benefits of a Unified Approach to Payment AutomationA unified approach to payment automation will eliminate most (probabaly all) of the above challenges.

But more importantly, it will also significantly improve any KPIs that the organization considers important to measure. Select KPI examples include:

Operational KPIs Supplier KPIs Financial KPIs

Number of Invoices Processed Per Day / Per AP staff

Processing Time of an InvoiceAverage Cost to Process an Invoice Exception Invoices vs. Total InvoicesPercentage of Electronic Invoices vs.

Physical InvoicesPercentage of Payments Made on

TimeErroneous Payments vs. Total

PaymentsPercentage of Duplicate Payments

Number of Supplier InquiriesNumber of Discrepancies or Disputes

Percentage of Suppliers Enabled

Goods Received not InvoicedDays Payable Outstanding

Number of Early Payment Discount Received vs. Missed

Cash Flow Gain

9 Integration with accounts payable systems

9Real-time matching (n-tier, ideally) for receipts, POs, etc.

9 Integration with bank systems and tax tables

9Tax tracking and reclamation enablement

9Currency tracking, trending, and conversion

9Automatic payment scheduling

9Treasury management system integration (cash planning)

9Payment receipt tracking

9 Integration with EFT solutions (ACH, direct deposit, wire, p-card, credit card)

Other benefits payment automation solutions can enable beyond enabling accounts payable alone:

1. Managing, controlling and enabling visibility into 100% of an organization’s spend

2. Providing a means of on-boarding and managing suppliers

3. Driving stakeholder collaboration

4. Technical and business integration support that makes AP a “hub” rather than a spoke

5. Compliance enablement (business and regulatory)

6. Creating an analytically oriented (and data-driven) approach for all aspects of payment processing and compliance management

7. Improving the ability of finance and procurement to impact the bottom line and improve working capital

8. Lowering the total cost to operate a critical back-office function within finance and procurement, while helping drive business objectives outside of it

9. Attracting suppliers at optimal payment terms to maintain a healthy supply chain

5 of 6

OUTLOOK

Why Coupa? The Spend Matters PerspectiveCoupa has invested in a fully integrated P2P platform for the past decade, but in the past year, they have developed a payment solution that will really strengthen the value for customers.

Key ElementsThe key elements that differentiate Coupa’s new payment solution include:

• Its business spend management (BSM) approach (enabled by its unified applications that extend procurement and invoicing through to payment and reconciliation)

• Top performing (based on SolutionMap 2018 data) functional and configuration capabilities for procure-to-pay overall

• A value creation methodology and measurement approach based on an end-to-end P2P platform empowered by the Coupa community to attract best-in-class partners and financing options and to derive insights that drive value

We see Coupa’s emerging success in this area stemming from its ability to integrate payments holistically at the company level, both downstream to procurement and upstream to treasury cash forecasting and management. And improving significantly all KPIs measured by its customers.

6 of 6

OUTLOOK

Why Coupa? Coupa is the leading provider of Business Spend Management applications. Coupa connects hundreds of organizations representing the Americas, EMEA, and APAC with millions of suppliers globally. The Coupa platform provides greater visibility into and control over how companies spend money. Customers – small, medium and large – have used the Coupa platform to bring billions of dollars in cumulative spend under management.

Coupa delivers the most important qualities necessary to deliver maximum value in Business Spend Management. Coupa is Comprehensive, Open, User-Centric, Prescriptive, and we Accelerate the delivery of business results for customers.

Comprehensive – BSM is filled with opportunities for synergistic processes, if all those processes are delivered through a single cloud platform. Coupa delivers Spend Analysis, Strategic Sourcing, Contract Management, Supplier Management, Contingent Workforce, Procurement, Invoicing, Expenses and Payments through a SaaS platform.

Open – from strengthening relationships with suppliers to integrating with ERP systems and other technologies, Coupa opens the door to a world of opportunities.

User-Centric – Coupa makes it easy for employees and suppliers to get started and get things done quickly, from Amazon-like search to approvals and invoice submission with no login required.

Prescriptive – we help customers get smarter about how they manage spend by offering prescriptive recommendations from savings opportunities to insights about how to digitize supplier relationships and optimize processes.

Accelerated – implementation through configuration, ease of integration, and ease of adoption by employees and suppliers drive measurable business results on an accelerated schedule. Frequently live in as little as 6 weeks, the top quartile of Coupa customers saw 77% of invoice lines tied to a PO in only 8 months after go-live1.

1From a 2017 Study Achieve More Value from Cloud Spend Management

Customers Achieve Their Goals With Coupa

Visit https://www.coupa.com/results/ to find out more about how Coupa customers

deliver results for their organizations.