Beyond AP Automation: How AI and Analytics Unleash the Power of Finance Data The webinar will begin shortly. You will hear silence until the webinar begins. Audio is provided through your computer speakers only. If you are unable to hear the audio through your computer speakers, simply click on the phone icon above the chat window to receive teleconference information. Technical Support Problems for this Webinar: Email: webinars@iofm.com
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Today’s Presenters Mark Brousseau Kerry Hewson Chris Happ President VP, Real Estate Operations CEO Brousseau & Associates Liberty Property Company Goby
Agenda • Where AP stands • The power of AI and analytics • Stories from the trenches • Wrap-up
Beyond AP Automation: Unleash the Power of Finance Data WHERE AP STANDS
Polling Question #1 How is your organization using data today? 1. Data primarily exists in individual files or documents 2. Data has been digitized into spreadsheets but still lives in silos 3. Data lives in a shared database with ability to report 4. Information is used to automate processes and reduce processing times 5. Information is actively used to deliver savings and identify opportunities
It’s All About the Data! How important is data to your finance operations? 19% 26% 55% Critical Important Not Important Source: Ardent Partners
How Finance Uses AP Data Cash management 53% Enhancing supplier management 53% Developing payment strategies 61% Finance and procurement collaboration 63% Handling invoice exceptions 64% Forecasting, budgeting & planning 70% Source: IOFM
Growing Demand for AP Visibility How will demand for real-time visibility into AP data change in over the next 2 years? Significantly higher Unchanged – 17% demands are low 13% Unchanged – demands are high 24% Slightly higher 46% Source: IOFM
Visibility is a Strategic Imperative How will AP’s strategic importance change over the next two years? Slightly lower strategic importance 0.68% Unchanged (we are of low strategic importance) 21.77% Unchanged (we are of high strategic importance) 25.17% Slightly higher strategic importance 42.86% Significantly higher strategic importance 9.52% Source: IOFM
The Enterprise Wants AP Data How do you expect enterprise use of AP data will change? Significantly greater use of AP data 15% Unchanged 37% Slightly greater use of AP data 48% Source: IOFM
The Enterprise Impact of AP Data • Financial supply chain efficiency and effectiveness • Budgeting • Forecasting and reporting • Working capital management • Spend management and supplier management • Compliance • Fraud mitigation
The Problem 45 % 42 % Lack of visibility 38 % into invoices and Difficulty handling, payables information managing and finding 17 % invoices Costs to process invoices are too high Difficulty capturing vendor discounts Source: IOFM
66% of CFOs Lack basic visibility into key insight areas Source: Accenture
5 Reasons for Poor Visibility Key information Data is poorly Information Systems are badly Decision makers is not captured organized is not timely integrated can’t access data
Beyond AP Automation: Unleash the Power of Finance Data THE POWER OF AI AND ANALYTICS
Artificial Intelligence • Understands tasks • Analyzes data sets and patterns • Employs “Machine Learning” • Trains itself to recognize documents • Mines information • Monitors business processes
The Benefits of AI • Performs transactions automatically • Flags relevant issues for further attention • Identifies trends and anomalies • Flags and explains likely risks • Offers data-driven forecasts • Provides continuous monitoring
19% of accounts payable professionals believe that artificial intelligence will be significant to the future of the profession. Source: IOFM
Analytics • Monitors key metrics • Aggregates data • Operations • Cash forecasting • Spend management • Drills down for root-cause analysis • Filters data
The Benefits of Analytics • Better operations and working capital decisions • Visibility into trends • Easy aggregate spend calculations – Cost center – Category – Supplier – Invoices sorted by unit, vendor, account, cost center, location • Earlier notification of budget variances/maverick spend • Leverage for contract management & negotiations
40% of accounts payable departments say that better analytics and reporting is a priority. Source: IOFM
Beyond AP Automation: Unleash the Power of Finance Data THE BENEFITS
Most organizations believe AP is the most manual and paper-intensive F&A function Most organizations believe AP is the F&A function best suited for automation Source: IOFM
The Value of AP Visibility Measure Manage Improve your Cash mgmt. and Identify KPIs day-to-day operations spend analysis volatility
Lower Invoice Processing Costs $8.78 $6.92 $5.81 $4.76 $3.41 $2.87 $2.44 $1.77 Level of Automation Low High Source: IOFM
More Invoices Processed Per FTE 22,756 19,889 10,938 8,600 3,600 1,350 Level of Automation Low High Source: IOFM
More Time for Value-Added Activities Manage Ensure Mitigate Rationalize Forecast & accruals contract compliance supplier manage and compliance issues spend cash budgets
More Invoices Paid On-Time SHARE WHO PAY > 90% OF THEIR INVOICES ON TIME 55% 53% 46% 46% 37% 35% Limited Automation Moderate Automation Significant Automation PO Non-PO Source: IOFM
The Problem with Slow Cycle Times
Best-in-class performers process a single invoice within 3.6 days while most companies take 16.6 days to process a single invoice. Source: Ardent Partners
Fewer Duplicate Payments PEER GROUP LESS THAN 1% Limited Automation 61% Moderate Automation 60% Significant Automation 66% Source: IOFM
The Hidden Costs of Errors More paper Late payment Profit leakage handling and penalties manual keying Missed early- Strained More supplier payment supplier inquiries discounts relationships Loss of Inaccurate Audit recovery internal forecasting service fees credibility
More Early-Pay Discounts Captured % OF EARLY PAYMENT PEER GROUP DISCOUNTS CAPTURED Limited Automation 52.9% Moderate Automation 58.5% Significant Automation 74.2% Source: IOFM
The Opportunity 0 Days 15 Days 60 Days Invoice Approve Due Date 80% of Suppliers Offer Early Payment Discounts Source: IOFM
Beyond AP Automation: Unleash the Power of Finance Data STORIES FROM THE TRENCHES
Polling Question #2 What is your biggest hurdle to increase automation in your AP department? 1. Change management 2. Budgetary restrictions 3. We have already automated all of our low hanging fruit; what remains is a heavier lift to automate 4. No champion within the organization 5. We are 100% automated
The Opportunity for AP
Evolving Expectations of AP Kerry Hewson Chris Happ VP, Real Estate Operations CEO NYSE: LPT
Polling Question #3 What is your AP organization focused on in 2019? 1. Reducing Processing Costs / Cycle times 2. Increasing Data Capture and Quality 3. Enhancing Cashflow Management and Planning 4. Actively Using Enterprise Analytics 5. None of the Above
Thank You! Questions after the event? E-mail webinars@iofm.com We hope to see you at a future AP & P2P Network event! For upcoming events please visit: www.iofm.com
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