AP Industry Posts

Data Security in Lavante Application

Wednesday, July 13th, 2011

There has been much press recently about websites being hacked, raising the security stakes for businesses that rely on the internet and SaaS-based systems.  At Lavante we take data security very seriously, and continuously improve our processes and technologies to protect our customer’s and supplier’s data.

Here are several concrete steps we have taken to address such security issues:

  1. SAS 70 Certification: Lavante has recently undergone SAS 70 Type II certification.  Statement on Auditing Standards (SAS) No. 70 is a widely-recognized auditing standard developed by the American Institute of Certified Public Accountants (AICPA).  It represents that a service organization has been through an in-depth audit of their control objectives and control activities, including controls over information technology and related processes. Lavante further underscored its commitment to data security and protection by migrating its hosting to a leading U.S. SAS 70 data center that provides state-of-the art, secure, SAS 70 data center IT infrastructure.  Lavante has always maintained the highest security and control of data, but the new Type II certification along with the move to this new facility provides additional guarantees that customer data is secure.  You can find additional details at http://www.lavante.com/sas-70-certification.
  2. McAfee SECURE certification: Websites displaying McAfee SECURE symbol are tested and certified daily to pass McAfee security scan which help protect you from identity theft, viruses, spyware, and other online dangers.  More details at https://www.mcafeesecure.com/RatingVerify?ref=connect.lavante.com.  You will find a McAfee SECURE seal in our application login page.
  3. DigiCert certification: DigiCert® (http://www.digicert.com/) provides security to Lavante by enabling the encryption of data transmitted between Lavante and your browser during an encrypted SSL/TLS session (look for the padlock). DigiCert® has verified that Lavante controls its site/domain. Records reviewed by DigiCert® confirm Lavante to be an existing Entity/Organization at the time of the review.  You will also find a DigiCert seal in our login page.
  4. Encryption of sensitive data: In addition to above security measure all sensitive data such as password, tax identification and banking information are also encrypted in Lavante Supplier Information Management application.

This is a rapidly evolving area.  I welcome your comments about any of these security measures and the related trends.

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Posted in AP Industry, Lavante, Recovery Audit, Technology | No Comments »

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Part 2 – The Future of AP: The Top 5 Changes Coming to AP

Tuesday, July 5th, 2011

Top 5 Changes to APThis is the second in a series of three blog posts devoted to five changes that are coming to AP:

1. More Importance Will be Given to the Quality of Supplier Information
2. Supplier Networks Become a Reality
3. Technology Provides New Ways to Automate AP Systems & Processes
4. Buyers & Suppliers Collaborate
5. More Cooperation between Finance & Procurement

To review the first two, please click here. Here, I am focusing on the question of how technology will impact AP systems and processes.

3. Technology Provides New Ways to Automate AP Systems & Processes

Over the last few years, this is the single-most talked about AP topic, and was the subject of intense debate and interest at the Fusion session. It is largely understood that automation is inevitability there were concerned opinions about the potential impact automation on, as they described, the “invoice chasers” and “data entry professionals”. I was impressed at the level of passionate discourse about how automation will impact the AP department, as well as how automation is often lumped in with outsourcing and off-shoring as a threat to jobs. The processes of moving past manual to automation will, no doubt, impact the staff in any AP organization. But, as one session attendee aptly noted, the focus should be redirected from potential job losses to the positive impact automation can make to allowing employees to take on more strategic roles.

Here are just a few areas where automation can be used to streamline AP processes and free-up staff time to work on tasks that are not as well-suited to a technology solution:

    • eInvoicing: According to a recent Aberdeen report, 77% of incoming invoices are paper-based. The report goes on to state that paper invoices and manual processing continue to hamper accounts payable operations, keeping suppliers in the dark and failing to give finance the visibility it needs to actively manage the organizations’ cash positions. This report looked at the performance of a range of company’s handling of invoicing, and showed that Best-in-Class performers which used technology took 3.8 days to process a single invoice, at a cost of $3.09/invoice.  These companies represented the top 20% of those surveyed. Contrast that to the bottom 30%, or the Laggards that did not employ technology, which took 20.8 days to process a single invoice at an average cost of $38.77! Moving your company from a Laggard to Best-in-Class would go a long ways towards meeting the top pressures driving AP improvements:  corporate directives to lower costs, and lack of visibility into invoices and AP documents. 

    • Automating Recovery Processes: A recent report conducted by Paystream Advisors focused on applying automation to the statement audit process, contrasting it to the highly manual and labor-intensive traditional methodology.  Automation, the report noted, really begins with the ability to streamline the process of connecting to the majority of a company’s suppliers — a daunting task without an appropriate technology solution. Traditional recovery audit firms, it states, review only the top 5-20% of a company’s suppliers, which “…leaves 61% of the statement credits in the remaining 80% of a company’s supplier population untouched.” This means a considerable number of credits are never found, and thus the company is missing out on a potential continuous revenue stream.  Automation serves two purposes in this example — it drives money to the bottom line, and it streamlines staff resources.  The report identifies the highest priority in selecting a statement audit firm as being “technology enabled” to manage extreme volumes of supplier data, enable 2-way communication, and capture and manage incoming supplier statements.  To read the entire report, please click here.

If you have other examples of how you see automation changing the AP environment, please add your comments here.  The final installment of this series will review the final two points: Buyers & Suppliers Collaborate and More Cooperation between Finance & Procurement.

Lavante & Basware will present a webinar on July 13 at 11am PDT on this topic, covering these top five changes. Click here to find out more and register.

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Posted in AP Industry, Lavante, Recovery Audit, Shared Services, Technology | No Comments »

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Lavante and Spend Matters Look at How Dirty Vendor Data Impacts Your Bottom Line

Monday, June 27th, 2011

Dirty DataThe topic of “dirty data” is certainly becoming more important in the Procure-2-Pay (P2P) space. As companies look for ways to further optimize their daily transactions and drive costs from their processes it becomes apparent a key blocker in the pursuit of excellence is the prevalence of “dirty data” throughout the supplier population. Of course the phrase “dirty data” is a little open ended; a more accurate reference to the problem would be outdated (or incorrect) vendor contact data, duplicate vendors and unidentified vendor relationships. Any of these otherwise unseen elements can strain the transactional process and create oversights in the purchasing process.

This week’s webinar The Dirty Little Secrets of Dirty Data jointly presented on Tuesday the 28th by Jason Busch of Spend Matters and Lavante aims to unveil the many different ways that dirty and omitted data in your supplier population can cost you significant dollars. Jason, Senior Editor of Spend Matters, will discuss from a high level how purchasing and payment challenges bubble up as data decays overtime. Lavante will follow by looking at, in very practical terms, how supplier recoveries are linked almost entirely to the presence of bad data in the supplier population.

By viewing the webinar you will understand a little more about the risk your company faces as well as learn ways in which you can combat that risk and prevent profit leakage.

Join us at the webinar, or check back to see the recorded on-demand presentation.

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Posted in AP Industry, Lavante, Recovery Audit, Shared Services, Supplier Information Management | No Comments »

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Lavante Responds to Customer Data Security Concerns with SAS 70 Type II Certification

Monday, June 27th, 2011

Last week marked an exciting moment for Lavante when we announced our SAS 70 Type II certification, continuing our forward momentum in developing and applying technology advances that benefit our customers. Statement on Auditing Standards No. 70, commonly abbreviated as SAS 70, is an auditing standard issued by American Institute of Certified Public Accountants (AICPA).

Our SAS 70 certification began with identifying 27 key controls related to our software development and data access security processes. Those controls were then evaluated and tested by a third party audit firm over a period of six months to ensure sustained performance. We are proud to have passed these tests and achieve the certification.

Our commitment to going through this long and rather arduous process came directly from our customer. After listening to their concerns around data security and SaaS applications we felt it was a necessary step to take in order to assure them that we had the highest level of security for all data.

But the impact of this certification extends beyond our customers, out to the industry as a whole. There are two different ways for a company to demonstrate SAS 70 compliance – the first is to use a SAS 70-compliant data hosting center, the second is to certify internal controls and development processes.

While other service providers in our industry have relied on only the first type, using SAS 70-compliant data centers, we clearly heard from our customers that this just wasn’t good enough. They wanted further assurance that development controls were in place on all internal processes, validated through a third party, as SAS 70 does.

To fully answer these requirements, we not only met the data center SAS 70 requirement, but extended this to cover the critical internal part of the equation. I predict that other service providers in our industry will now go down this same road, and adopt similar certification of internal process controls. This will be have a positive impact on our industry, by providing customers with further peace of mind and assurances that their data is secure.

In the end, I firmly believe that the future of our industry will flow directly through technology, providing intuitive applications that empower and enable people and companies to do more with less. As Lavante has demonstrated, most recently with our statement audit patent approval, that we will continue to lead the way in innovation and deploying technology that provides the highest levels of security to our customers.

Please add your comments here about what you think are them most critical concerns around data security and SAS 70 certification.

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Posted in AP Industry, Lavante, Recovery Audit | No Comments »

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Part 1 – The Future of AP: The Top 5 Changes Coming to AP

Thursday, June 16th, 2011

Top 5 Changes to APAt last month’s IFO Fusion conference in Orlando, my good friend and colleague Bob Cohen (VP, Marketing at Basware) and I presented what turned out to be a very popular session, The Future of AP: The Top 5 Changes Coming to AP. Although an obviously ambitious topic, it is one that both Bob and I care deeply about. In our capacity as marketing professionals in the AP market, we are consistently exposed to the client voice not only as representatives of our own companies, but also at the numerous industry conferences we constantly attend across the nation.

This presentation was the distillation of literally hundreds of conversations with finance and technology professionals over the past two years about what AP professionals and the AP market have identified as the key to becoming increasingly efficient, productive, and more relevant in today’s business environment.

The list that follows outlines what we see as the top five changes coming to AP:

1. More Importance Will be Given to the Quality of Supplier Information
2. Supplier Networks Become a Reality
3. Technology Provides New Ways to Automate AP Systems & Processes
4. Buyers & Suppliers Collaborate
5. More Cooperation between Finance & Procurement

In this post, I’ll add my thoughts about about the first two points; the remaining items will be handled over the next two weeks.

1. More Importance Given to the Quality of Supplier Information

Improving supplier information is an elusive but increasingly seen as a critical goal in AP departments. Lavante benchmarking data indicates that every year over half of any company’s suppliers will change some significant contact attribute in their AR department. These changes – ranging from the primary contact, physical address, or email – can dramatically affect an organization’s ability to interact with that supplier and maintain transactional excellence.

A rapidly-decaying vendor database has real hard costs associated with it. Consider the potential loss of missed discounts, unanswered phone calls, or miss-directed checks as just a few possible outcomes of incorrect contact data. There is an enormous financial upside to improving and maintaining the highest quality of supplier data. This issue gains increased relevance as industry analysts are focusing attention on this new vendor data management market* and technology providers, such as Jigsaw and Lavante, deliver solutions to help companies effectively automate this process.

Improving supplier data offers a great benefit across the larger procure-to-pay life cycle by providing both procurement and finance with one uniform, single source of truth that will drive improved procurement activities as well as payment processes.

2. Supplier Networks Become a Reality

Simply put, a supplier network is inevitable. Numerous software providers are emerging and gaining momentum as network providers, although a clear market leader is yet to rise to the top. It is obvious that AP professionals are increasingly interested and excited to leverage the benefits and functionality that a comprehensive supplier network can offer.

We see the emergence of a supplier network is a natural for two major reasons.

    • A network most closely resembles what is fast becoming the favored means of communication amongst large, disperse groups – social media. Consider when you buy products on Amazon and the instant access you have to what others think about the seller and the product. Think also about how quickly you can use Facebook to inform your entire family that you are safe after a natural disaster has struck your geographical region. Or, the use of Linked-in to seamlessly communicate well-beyond your personal network to professionals in your field. AP departments (and all business for that matter) have much to gain from adopting this same level of immediacy and efficiency!

    • A supplier network should deliver equal benefits to both supplier and customer. Ultimately the winning technology will deliver the greatest benefits across both populations in order to drive adoption.

Click here for part 2: Technology Provides New Ways to Automate AP Systems & Processes. The final installment will come shortly with: Buyers & Suppliers Collaborate and More Cooperation between Finance & Procurement. Please add other ideas about what you think is coming in the AP industry.

Lavante & Basware will present a webinar on July 13 at 11am PDT on this topic, covering these top five changes. Click here to find out more and register.

* See Jason Busch’s Spend Matters blogs for more discussion around vendor data management, supplier networks, and other P2P issues.

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Why Supplier Information is like Precision Machinery

Monday, June 13th, 2011

Precision InstrumentFor years, procurement organizations had as its primary charter to best manage spend and spending activities. The concept of “spend” comprised several different elements:

- Suppliers
- Supplier Contractual terms
- Purchasing volume with those suppliers under control of agreed upon terms

In pursuit of maximizing/managing spend, many procurement professionals have devised numerous intelligent methodologies for selecting the correct suppliers and for negotiating the best possible terms. Unfortunately a lot of the work done on these matters exists as a point in time. For example, selecting a supplier at a single point in time and you set contractual terms at a point in time to last for a period of multiple years. What is not accounted for is that as soon as you lock in a contract with a supplier much of the details regarding the supplier will begin to change almost immediately.

Just like precision machinery, supplier information degrades over time if not maintained properly. For example, Lavante often finds that a customer’s supplier file includes nearly ten percent overlap in the supplier population. That is to say one in ten suppliers are related to some other supplier in the population – but that connection is not visible to the customer. This unseen linkage between suppliers can lead to significant profit loss in the form of missed price breaks, volume discounts, and rebates.

True spend management requires the best of breed technology and processes to select suppliers and negotiate terms. In addition, due to the constantly changing landscape, it is important to manage and refresh the supplier information in real time so that enterprises have ongoing visibility into the constantly evolving relationships within the supplier population.

Precision machinery requires lubrication, sharpening and maintenance at continuous, frequent intervals. Similarly, accurate and well maintained supplier information can reduce unnecessary errors which will help you avoid over-payment all while improving organizational efficiencies and providing your company a competitive advantage in strategic relationships.

To find out more about Lavante’s solutions to help maintain supplier information please click here.

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Posted in AP Industry, Lavante, Supplier Information Management, Technology | No Comments »

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IAPP is now “The IFO” (The Institute of Financial Operations)

Friday, June 10th, 2011

Typically, you might prefer not to be institutionalized, but a couple thousand people saw it differently last month in Orlando at FUSION 2011. The association formerly known as IAPP, and more recently known as IAPP/IARP/NAPP/TAWPI, finally settled in on a new and decidedly simpler name – “The Institute of Financial Operations” (The IFO).

During his opening remarks to kick off IFO Fusion, Executive Director, Tom Bohn spoke about the change as a more accurate representation of the group’s charter – to educate and inform its members. The IFO is more than an association of professionals; it is an institute of learning and spans capably across multiple departments in the financial and operational suites at enterprises of all sizes.

Owing its inherited membership to a number of pre-existing associations, The IFO will continue to serve all of its communities with dedicated curriculum. AP professionals that enjoyed focused networking and education at IAPP events will still enjoy the same opportunities to meet with and learn from peers.

Similarly, TAWPI members that enjoyed a consistent diet of education on automation solutions and other modes of work place improvement can still count on an uninterrupted program. And the same consistency can be expected from all of the groups now aligned under the new flag.

From this bloggers perspective, Fusion attendees not only understood the decision to unify under the new name, but they also appreciated the change. The reactions I heard from attendees at the conference showed that they are looking forward to the many benefits that will follow the announcement. “I have been coming to IAPP for 15 years,” said one AP manager from a $10b manufacturer, “and I have consistently been exposed to the most relevant ideas in my space that were going on at the time. The only problem was that I was not getting feedback on the topics that were happening in the departments outside of or adjacent to mine. The new IFO structure will expose me to all of the information I need to make good decisions and to know why I am making those decisions. I am excited!”

From the Lavante perspective, IFO Fusion presented yet another great annual opportunity to network, meet prospects and get exposed to the most cutting edge technologies and ideas in the financial space. In addition, this year’s theme: Motion Pictures, created the perfect backdrop for the event. While on the trade show floor, Lavante leveraged an Indiana Jones themed booth into an Oscar-worthy affair. If you had your picture taken with Indy, and want the digital files – let us know! We can shoot those over to you.

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Posted in AP Industry, IAPP, Industry Associations, Lavante | No Comments »

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IAPP Fusion 2011 Delivered AP Thought Leadership – From 1099 Reporting and Statement Audit Best Practices to Innovative Technology and Team Building

Thursday, May 19th, 2011

This year’s Fusion (May 8-11 in Orlando, FL) began with the announcement of the association’s name change from IAPP to the Institute of Financial Operations (IFO) – which was exciting news for everyone present at the conference. The conference then fulfilled on its promise to present thought-provoking sessions along with ample opportunity to network with AP and Shared Services professionals.

Here are some themes I heard rise to the surface throughout the four-day event:

    • Tax & Compliance Issues: Numerous sessions and discussions were devoted to this topic. Attendees were looking not only for more understanding about regulations, but specific details on how to move from non-compliance to compliance. Two recurring examples were the changing landscape around the 1099 reporting laws and foreign citizen reporting.

    • Automated, Comprehensive Statement Audits: PayStream Advisors & Lavante held a joint session presenting new research on Statement Audits as a Best Practice in Recovery Auditing, focused on the difference between traditional AP recovery audits and dedicated statement audits. The audience expressed great interest in innovative technology for statement auditing, as well as the resulting increased recovery dollars and vendor updates. Lavante’s booth was constantly filled with prospects wanting to learn more about our statement audit technology.

    • Selecting & Deploying Innovative Technology: Not only were there sessions devoted to this subject, but considerable activity on the exhibit floor. I met with several Lavante customers attending the conference specifically to look for technology to help with invoicing and supplier management. The high interest in this topic was clearly demonstrated when the joint session led by Basware & Lavante, The Future of Accounts Payable: Improve Data, Improve Processes, Discover Technology had the highest attendance of any conference session (over 100, standing room only).

    • Building a Strong, Motivated Team: Many sessions and considerable “buzz” was devoted to how to motivate and build a strong, successful AP team. I saw sessions and witnessed many hallway conversations that focused on cost-effective ways to reward and recognize internal staff in order to build the best, most productive team possible.

These are just some of the main themes that I picked up at the conference. I welcome feedback from others attending the conference about great sessions or themes you saw emerging.

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Posted in AP Industry, IAPP, Lavante | No Comments »

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Understanding the 1099-K Reporting Changes Now in Effect

Thursday, February 10th, 2011

Last week, I introduced six initiatives AP and Shared Services could implement to drive organizational efficiencies in 2011. This week, I’d like to focus on the 1099-K reporting changes that went into effect in January of this year.

This change was part of the Housing Assistance Tax Act of July, 2008. It was better known for providing credits to first-time home buyers, but it also created the new 1099-K tax form, which shifts the 1099 reporting for companies that use credit cards to pay suppliers. Under this new ruling, starting in 2011, all financial institutions that process credit or debit card payments will be responsible for sending the 1099 documentation of that year’s transactions to both their clients and the IRS. Before this ruling, the company that received the funds was required to handle the reporting.

The ruling will only impact merchants that have over 200 payments that total over $20,000, but it will have enormous impact on companies of all sizes.

First, AP departments that use automated systems to populate spend files and create 1099 reports will need to remove those transactions that now fall under the responsibility of the third-party funding agent.

Second, it will increase the 1099 reporting responsibilities of all institutions that act as a funding agent for another company. This would include both financial services companies (banks, credit card companies, etc.) as well as outsourced AP companies. As of January 31, 2011, these third party companies will be responsible for collecting W9s and producing the 1099 reports next year.

The reasons behind these changes actually make a lot of sense. It is intended to shift the task of producing 1099 reports to the institutions that actually own the relationship with the entity that makes the payment. In the case of a credit card, the financial services company holds the cardholder information, not the merchant, which is necessary to obtain accurate reporting information.

For a deeper discussion about how to prepare for the impact of 1099 reporting laws, visit the Lavante 1099 resource center.

Posted in 1099 Reporting, AP Industry, Tax ID Numbers | No Comments »

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TAKE THE INITIATIVE TO DRIVE AP AND SHARED SERVICE ORGANIZATIONAL EFFICIENCIES IN 2011

Thursday, February 3rd, 2011

We’d like to devote this blog to presenting some ideas and actions that AP and Shared Services can pro-actively put in place this year to improve operational and budget efficiencies. I welcome your thoughts on this subject, along with methods or action plans that you will take this year to improve your department’s organization and processes.

  1. Make sure to use the latest technology, and that you utilize all of the functionality to gain the maximum benefits from your investment.
  2. Continuously check to be sure your costs are as low or lower than the competition, which is likely outsourcing.
  3. Review how your department is taking discounts and timing payments to realize the greatest advantage of interest rates in relation to cash flow.
  4. Given the change in financial markets, protecting the institution’s financial rating is increasingly important. Don’t let late payments downgrade your company’s financial rating, which could then increase interest rates. Work within the term limits as suggested above, but make sure you stay current!
  5. Take advantage of every non-capital expenditure that can bring dollars back into the organization. One example of this would be recovery audit processes. If you are using a recovery service, whether it is primary or secondary, make sure that it is paying more than it is costing in terms of resources.
  6. Stay current on changes in the laws that could impact your processes, especially the 1099 reporting changes. Begin working now (if you haven’t already done so), to develop a realistic project plan that will let your company comply with the new regulations.


Here are a few additional thoughts on the looking at technology for AP & Shared Services.

When looking at bringing on new technology solutions, look for ways that it can give you fast, near real-time visibility into root-cause analysis. This means utilizing on-demand solutions that can continuously report on processes as opposed to manual, more project-based engagements. In recovery, this would mean that you have immediate visibility into issues surrounding credits. This gives you two distinct advantages; first you take the credit faster, and secondly, you have can take remedial actions to correct any problems related to the credits.

Another suggestion is whenever possible, leverage technology benefits across multiple areas. For example, when collecting TIN information, see if you can obtain up-dated supplier contact information, updated risk mitigation information, parent/sub reporting, etc. Look at ways the technology can add multiple levels of value throughout your organization.

I’ll continue next week with more discussion around the two 1099 reporting changes. In the meantime, here is a link to several webinars we presented last year that deal with preparing for the impact of these changes.

Posted in 1099 Reporting, AP Industry, Recovery Audit, Shared Services | No Comments »

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