Shared Services Posts

Benefiting from a Prescription for Clean Data: A Case Study

Tuesday, January 24th, 2012

A recent case study developed by Spend Matters details  how a North American and global procurement organization for a top five pharmaceutical company applied a defined exercise and solution implementation from Lavante to discover where it had excess risk exposure, lack of policy compliance, overpayments and other cost driving issues. The procurement organization, which primarily focused on order-to-cash, procure-to-pay, credit and collections was ultimately able to trace all of its challenges in these areas back to weak or missing vendor data.

As the case study details, the company already had some of its vendor data under active management, but many vendor data points required enhanced management. Critical data with inaccuracies included:  remit-to addresses, parent child connections, duplicate vendor entries and incomplete fields including TIN, email and fax numbers.

If the organization had embarked on its data cleansing efforts internally, the benefits would not have cost-justified the task. As such, it decided to work with an external partner. After evaluating a number of providers, this pharmaceutical company selected Lavante based on the power of its underlying technology and the portal it offers to access it. Lavante also offered a breadth of coverage to reach the majority of the pharmaceutical company’s vendors rather than just the top 10-20% of its vendors.

The company implemented the change process by centralizing data quality through one common channel in order to ensure accurate books. To achieve this, the solution was integrated with the pharmaceutical company’s vendor outreach and registration process through four key components: validation, updates, augmentation and de-duplication to primarily find duplicate payments.

To read more about this process, download the full case study by clicking here.
It clearly demonstrates how this global pharmaceutical company was able to recover $5MM in credit opportunities based on a total spend of $10 billion. In order to have the same EPS impact, the organization estimated they would have needed to generate between $50MM and $100MM in new sales.

An underlying platform for credit recovery proved to be the key success factor. Previous, largely manual consultant-led activities focused on only top vendors and their “statement reviews” and led to a lower recovery rate. In contrast, the Lavante platform cast a wider net, and this broader reach resulted in additional recovery opportunities that had been previously overlooked. This was critical for this pharmaceutical company as the top 10-20% of vendors were already “over-farmed” and the next tier down was where the most significant potential for recovery was found.

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Posted in AP Industry, Case Study, IAPP, Lavante, Recovery Audit, Shared Services, Technology, Vendor File Cleansing, Vendor Statement Audit | No Comments »

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Inaccurate Vendor Data Impacts Multiple Departments and Can Jeopardize Critical Corporate Initiatives

Tuesday, January 3rd, 2012

Vendor File Cleansing Impacts Multiple Enterprise DepartmentsWithout current, accurate vendor data, a long list of corporate initiatives can be rendered unmanageable or even impossible to execute. From procure-to-pay, supplier diversity and tax compliance to strategic sourcing and social responsibility, supplier data touches multiple processes and can have a dramatic impact on priorities throughout an organization.

In my professional career, first as Director of Global Shared Services for Boise Cascade, and most recently as VP Account Management at Lavante, I’ve experienced some real world examples that highlight how critical accurate vendor data is to any organization.

Here are several examples:

      • When introducing new terms and conditions, a company had to send a letter to all vendors updating them of the changes; unfortunately, a staggering 80% of the letters were returned due to bad information.

 

      • At another organization, increased banking charges were addressed by bringing remittance advice routing in-house. The most expensive and time consuming part of the project was acquiring correct email and fax numbers, which took inordinate amounts of time and money.

 

      • After purchasing a comprehensive e-invoicing solution, one company took more than two years to clean up their vendor information so they could take full advantage of the new technology, resulting in much delayed ROI for the project.

 

      • A group of advertisers placing orders with various media companies started requiring diversity information reports. In order to prevent a significant drop in revenue from these advertisers, one media company had to immediately engage their 30,000 vendors and rapidly find a means of collecting basic supplier diversity information to avoid losing business.

 

      • As a check-fraud-prevention measure, one organization required all suppliers to receive ACH/EFT payments. This requirement cost untold dollars and the company took more than a year trying to contact their suppliers about the policy change due to incorrect, missing and out-of-data supplier contact information.

Because bad data can trickle down your supply chain, it is important to solve issues upstream before the impact becomes contagious. A lack of good vendor data can have a dramatic impact on your organization – from exposure to vendors with credit issues, to reliance on proprietary suppliers for critical components, to the more pedestrian (yet costly) issues that can arise from using vendors not in compliance with your terms and policies.

Good data housekeeping is not only a best practice, it can have a long term positive effect on your company’s overall performance across every department.

To read more about the impact of bad supplier data, take a look at a recent Lavante webinar, hosted with Jason Busch of Spend Matters.  You can also find out more about how Lavante Recovery helps to not only speed dollars to your bottom line, but also automatically handles vendor file cleansing.  Click here to find out more.

Posted in Lavante, Recovery Audit, Shared Services, Technology, Vendor File Cleansing, Vendor Statement Audit | No Comments »

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Global Cruise Line Uses Lavante to Maximize Recovery Efforts

Thursday, November 3rd, 2011

As part of a larger report published by PayStream advisors earlier this year, PayStream also interviewed a Lavante customer to verify the comprehensive statement audit best practice approach covered in the paper. The findings of this interview are now available, which validates Lavante’s approach to applying technology to help our clients drive a continuous stream of credits to their bottom line, and uncover the root cause of trouble areas so AP departments can work with their counterparts throughout the P2P Process to take quick corrective actions.

We were happy to see that our recovery process was clearly differentiated from both internal review and traditional, manual audit processes. Before bringing Lavante in for a trial, the global cruise line had used in-house processes to track duplicate payments and unclaimed credits before trying two different traditional AP recovery audit firms. The later proved to be too invasive with too few results, and they decided to try Lavante with a small scope.

Based on the results of this smaller project, after a short time the audit scope was expanded to include more recent credits – from a initial 180 days down to 120 days old, and now working on 90 days. This “rolling” time frame is an important part of the statement audit process, as it gives the client’s internal AP process to catch many of the credits. We sit in the background as a safety net, continuously connecting with the company’s suppliers to ensure that credits on these older statements are caught. And, Lavante delivers these credits via our online web portal on a weekly basis.

As the manager of Cash Disbursements stated:

“[Lavante’s] job is to get out there and identify where people owe us money. They let us get this money faster and equally as important, quickly recognize potential errors. They are helping us collect with is due to us and most likely, a lot of this would be missed.”

To read the entire case study, please click here. And, to read the larger white paper which outlines the best practices for a comprehensive statement audit, click here.

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Posted in Lavante, Recovery Audit, Shared Services, Technology, Vendor Statement Audit | No Comments »

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Insights About the Future of 1099 Issues in Financial Operations Matters

Tuesday, August 23rd, 2011

many questions remain about the continuing 1099 reporting debateI was happy to see the article by Diane Sears in the latest issue of Financial Operations Matters, Is 1099 Issue Dead or just Resting? which focused on the continuing 1009 reporting dilemma. Although the heated debate over this issue has died down after the repeal of the reporting requirements tied to the health care legislation, Diane brings up critical issues that every enterprise should keep in mind about this continuing challenge. She notes in the article: “Industry watchers say financial operations professionals can expect to see expanded 1099 reporting requirements pop up in other bills designed to raise federal tax revenue – and soon.”

One of those industry watcher’s advice comes from a Lavante’s partners, Convey Compliance Systems, a firm that provides tax reporting software and services. Their spokesperson, Troy Thibodeau, noted that the entire 1099 reporting process had largely been overlooked by many organizations, leading to low adoption of the automation that would deliver added efficiencies and cost reductions. This attention deficit all changed when the healthcare reform act shined a very bright light on the operational and process problems that organizations face in the 1099 reporting area.

My colleague at Lavante, Sherry DePew added her expertise to the article, noting: “The majority of the people we talk to say this has given them time to get prepared. Everyone pretty much knows this is coming.”

The article expressed complete agreement that the expansion of 1099 reporting is inevitable. To best prepare to meet future requirements, companies should look to automate the process and to implement repeatable processes, both as a way to effectively manage the entire 1099 reporting process now and in the future.

For more information, click here read the entire article by Diane Sears. And, let us know what your thoughts are about this issue and how you are planning to prepare for possible changes.

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Posted in 1099 Reporting, AP Industry, IAPP, Lavante, Shared Services, Tax ID Numbers, Technology | No Comments »

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Supplier statement audit can provide important insights before your next sourcing decision

Monday, August 8th, 2011

With the increasing pressures on the profit margins, the efficiency of the procure-to-pay (P2P) processes has been under intense scrutiny within an enterprise.  Typically, Procurement and Finance organizations manage various aspects of P2P processes.  Thus, for a successful execution of the entire P2P process, each organization needs to understand the actions and motivations of the other.  This P2P mindset threads procurement and payment activities into one continuous lifecycle.

With this in mind it is a worthwhile to consider the details of the entire cross-functional process.  At the front end, one will encounter any number of sourcing and procurement activities where highly trained professionals are chartered to identify the best possible suppliers to buy the best possible products or services at the best possible cost of ownership.  At the far end of the P2P lifecycle, one will encounter Accounts Payable (AP) department whose goal, as told to me by one industry expert, is very simple, “To pay the right entity, the right amount, at the right time.”  This is a simplification of course, but generally, all professionals in the space are pursuing some combination of these stated objectives.

Typically these departments are measured, evaluated and guided through an exhaustive suite of metrics.  A number of sophisticated software applications and service providers stand ready to review, in fine detail, how efficiently resources are being spent across commodities, geographies, business units and supplier types.

Having been a practitioner in this space, I can tell you that even though the concept is simple, AP departments face a number of external factors that constantly challenge their ability to achieve transactional perfection.  As a result, the last decade has seen the emergence of “supplier statement audit” which routinely reviews the transactional (read: payment) history of the enterprise to determine the efficiency of the supplier payment processes.  For too long such supplier statement recovery auditing has been confined to the AP suite as a tool for improving the efficiency of Accounts Payable.  With increased focus on the broader P2P process, supplier statement recovery audit results should be more frequently evaluated by the procurement professionals in the context of the larger supplier management process.

There are many benefits to combining supplier statement audit results into the associated procurement metrics, such as supplier scorecards or spend analytics.  Procurement departments have as much or more to gain by evaluating the results of the recovery effort as do AP departments.  Here are just a few ways procurement can gain from incorporating a review of statement audit results:

      • Statement audits can reveal profit leakage, which procurement needs to understand in order to assess larger budgeting or savings opportunities that may exist. 
      • Analysis of recovery claims can reveal valuable  insights that will better inform future procurement activities, such as  overlooking the related nature of separate suppliers and missing out on pricing  discounts. 
      • Procurement can identify suppliers that routinely  commit transactional errors and incorporate those suppliers’ lack of accuracy in  the supplier scorecard for a more holistic supplier evaluation. 

As a best practice, build in a process to review supplier statement audit results before your next supplier strategy review.  It will provide important insights for managing suppliers.

I would welcome your thoughts on this topic.

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

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Top 5 Changes Coming to AP – Collaboration and Cooperation

Wednesday, July 27th, 2011

Top 5 Changes to AP

In this post, I’d like to present the final two changes we see coming to AP, that will drive efficiencies and increase the value that AP brings to an organization.  In two previous posts, we covered the first three changes:

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

Here, I present some ideas related to the final two changes:

4. Buyers & Suppliers Collaborate
5. More Cooperation between Finance & Procurement

All of these changes are discussed in a recent webinar I co-presented with Bob Cohen, VP Marketing at Basware, which can be viewed by clicking here.  And, here is a quick overview of the final 2 changes.

4.   Buyers & Suppliers Collaborate

The desire to bring buyers and suppliers closer to together is not a new concept, but it is one that is gaining more attention and momentum.  The potential benefits — from reducing transactional and administrative costs, to streamlining business processes — are just too great to ignore or put off for some unknown future date.  But, there are challenges that must be overcome, as each department has its unique set of requirements.  These can be overcome by focusing on better connections between buyers and suppliers, which then helps drive more timely access to better data.

The first step in the process is to improve the electronic connections between suppliers and buyers.  Moving away from paper-based, manual processes to electronic, automated processes serves to dramatically speed transaction times while reducing errors It also provides the opportunity to proactively use current data to drive better deals for your company.  Timely access to current data will help in setting better terms, more advantageous payment schedules, the ability to leverage product delivery issues (i.e. shipment is delayed, so payment should also be delayed), or to best determine payment timing strategies.  This all will help improve cash flow and streamline business processes for added cost savings.

5.   More Cooperation between Finance & Procurement

Improving the working relationships between finance and procurement is another area of potential organizational benefits, and one we predict is already in play.  Considering the different perspectives and roles that Procurement, AP, Finance, and Suppliers play within the P2P cycle, the potential for departmental disconnects are great, making the benefits to gain in harmonizing the connections equally as significant.  Accounts Payable is in a unique position to be the key convergence point for Procurement, Finance and Suppliers.  Placed at the center of these three entities, AP has the opportunity to add great value to the overall organization.  For example, where procurement is focused on what is spent, AP has the data to know what is spent, and when it is delivered.  With AP at the center of these three entities, they are in a position to deliver critical, timely data to procurement enabling them to negotiate better terms, improve deliver and receipt of goods, etc.  In this scenario, AP takes on a much more strategic and indispensable role in achieving organizational goals.

This has been a very quick overview of what we see as critical changes coming to the AP environment. For a more in-depth discussion around these points, please download the webinar by clicking here.

We will be posting additional material on these topics over the next few months.  We welcome your thoughts about changes you see which will impact AP and Procurement.

 

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

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IQPC Shared Service Week Puts the Focus on Supplier Information Management Process and Solutions

Tuesday, March 15th, 2011

For 15 years The Shared Services and Outsourcing Network (SSON) has offered an annual forum for shared services professionals to gather and discuss current and pressing challenges that face large corporations. This month’s event in Orlando, FL was another fantastic effort by SSON to bring together the most talented minds in the space.

The central focus was on how to continue moving beyond the last two years of recession and how to better prepare for future economic upheavals. Several marquee session titles included: “Challenging Times Pose Unique Opportunities for Shared Services” and “Fresh Eyes for 2011: Realigning Competitive Strategy Post Recession.” Other sessions looked at using metrics to constantly gauge the health and efficiency of a company’s financial operations.

Another theme looked at the health of a company’s supplier data. Directors of shared services can typically view the entire P to P process, and it has become increasing clear that corrupt or inaccurate supplier data can create errors in the payment process that drive up transactions costs. Top of mind were solutions that ensure quality supplier data. Companies actively discussed the growing adoption of e-payable solutions along with other automation solutions and the importance of accurate supplier data as part of corporate initiatives to ensure smooth deployments and upgrades. On the floor, Lavante saw considerable interest in our supplier information management solution, as well as overall growth in awareness of the critical importance of a supplier management strategy and solutions.

We welcome your feedback about the conference as well as your thoughts about the themes presented here.

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Posted in Shared Services, Supplier Information Management | No Comments »

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