Posts Tagged ‘AP Industry’

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Tom Bohn, IAPP FUSION Kickoff Speech

Wednesday, May 12th, 2010

Tom Bohn absolutely “brought it” during the opening session of IAPP FUSION 2010.  I have long been a proud member of IAPP, but Tom’s remarks really hit a nerve and left me feeling even better about the association.  Tom started his speech by taking us on a little trip through the five different music delivery technologies that most of us have experienced during our lifetimes: LP, 8-track, cassette, CD & MP3.  The point was simple… the times they are-a-changing.

Tom discussed change and pointed to several more eye opening things that will be changing in the coming years; China will become home to the largest English speaking population in the world (WHAT?!) and a computer will surpass the human ability to reason.  (Although he did admit that his intellect was likely outpaced by the 386.) 

Ultimately the point of his story was about the changes being experienced by major corporation around the globe.  An advocate for financial professionals of all departments and ranks Tom drew a straight line to how these new shake ups being experience the world over would effect the folks sitting in the room.  His answer to the problem was not simple, but I interpreted the spirit of his sentiments to be… “we rise up, we get resourceful, we attack the situation and we prevail.”  That is what FUSION is all about!  Tom actually said it outright, “IAPP/IARP/TAWPI Fusion is not the culmination, it is just the beginning of how we address the change in the world and the change in the workplace.”  OK I am paraphrasing, but you get the point.

This year’s Dallas conference is host to 1600 souls which is the second largest turnout for an IAPP event in the association’s history.  Where many other associations are suffering their worst attendance rates ever and trying with all their might not to dissolve from existence, IAPP is surging. IAPP is delivering one hell of a product.  That is a great road map for how to overcome obstacles as well.

I have walked around FUSION for the last two days I have attended many sessions and I have joined spirited discussions from the perimeter of many round tables in the banquet hall at breakfast and lunch.  I have seen it first hand…  more involvement and engagement from attendees, more workshops, more information & more services provider solutions.  IAPP even hosted a series of tours where financial professionals could opt in to take a guided walk through the exhibition hall and listen to high level 5-7 minute descriptions of  service provider solutions.   Contrast this to the typical interactions… at most conferences, attendees are forced to travel booth to booth to get a booklet stamped in hopes of winning a prize…  that is NOT strategic and that is NOT helpful, that is disrespectful to everybody’s time.  FUSION is creating an environment where attendees can actually view the providers as… well… providers.  What a concept.

We (Lavante) presented our solution in the “Emerging Technology Tour” and 87 people attended to hear our CEO discuss our Lavante Connect new product launch.  I actually heard one of the tour attendees say, “The technology tour has been the most useful hour of my entire 2010.”   (That is a majorwin for them) We set up over ten product demonstrations alone in just minutes as the touring mass scattered from our booth space.  Incredible! (That is a major win for us)

All in all, I am a believer and I think IAPP is on the right track.  I am proud to be involved with this group and I hope we can all follow the example and get motivated and adapt to the changing times and coming up with winning solutions.

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IAPP/TAWPI FUSION 2010

Tuesday, May 4th, 2010

How is next week’s IAPP conference like jumping out of a plane? 

Next week is IAPP’s annual conference at the Gaylord Texan.  Up to 2,000 financial professionals will be living and doing business all within a 1 mile radius of each other.  An ideal petri dish for best practices, catching up with colleagues and meeting new service providers that can take your productivity to the next level.  Whenever coming up on trade shows and conferences I always think back to an episode in my life about fifteen years ago when some friends and I thought it would be a great idea to  jump our of a perfectly good airplane!  We wanted to skydive, a right of passage for the adrenaline repressed.

I wasn’t sure how I felt about the idea so, a few days before the big event I began to train my mind to de-sensitize itself to the thought of hurtling myself ground ward from ten miles up.  Every time the fear would bubble up I would overcome it and calm myself to minimize the apparent dangers.  It was probably some kind of defense mechanism, but by jump day I was pretty unaffected by the thought of skydiving.  Where my friends were sick with excitement, I was very non-chalant and clam about the ordeal.  Even as the plane spiraled is ascent I do not think my pule rose above normal.  We were all jumping tandem and as my instructor inched us closer to the opening on the side of the plane I felt nothing.

In the next moment we were tumbling in what felt like weightlessness.  At one moment, nothing but blue and then a flash of wing and then the earth below me.  Arms spread, wind in my face, man yelling in my ear…  I felt nothing.

So what does this have to do with IAPP?  Next week I challenge us all not to do what I did.  Do not detach, do not go into “play it safe” mode, do not spend time in the safety of your room or at dinner with only the people you know.  IAPP works around the calendar to put together one of the finest trade events in any industry and they absolutely pack the schedule from Monday to Thursday to delivery quality.  There is so much available to financial professionals at all levels at next week’s conference and I strongly encourage all attendees to experience every bit of it.  Be as present as you can, attend as many session as you can, and start conversation with strangers.  Every person in every room at the Gaylord Texan next week has something of value to offer and the information is only a hand shake away.

View next week as an opportunity to advance you career and to meet experts that ave been through all of the business problem you are facing.  Expand your personal network and jump in with both feet.

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Supplier Information Management (SIM)

Thursday, April 29th, 2010

A week ago I blogged the answer to some questions about a recent press release regarding our Q1 growth… in the blog I let slip a teaser about a new product…  after a few more queries…  I will reveal the following:

Powered by the underlying Lavante ConnectTM platform which is hands down, the premier tool for driving communication compliance across a supplier population of any size, Lavante has unified their development team of 13souls under one game changing goal: Supplier Information Management (SIM)

This is not what you have read about anywhere else, this is not vaporware, this is not one way.  This is the soup and the nuts.  This is hard ROI…  You get both the industry leading recoveries and the supplier information together.  Pays… for… itself…

This is connection to all suppliers… for all of your departments with workflow and automation and two way communication with the click of a mouse.  This is data and docs and proactive updating based on your needs and controls.  This is much more than you have seen anywhere else but you need to hold on for a few more days…

Blast off is on May 11th in Dallas.

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Recovery Auditing Misconception #4

Wednesday, April 28th, 2010

Recovery Auditing Misconception #4:   I don’t have the time or resources to support this process

The Short Answer:

It takes very little of your time or resources to support a Lavante recovery audit.  All you need do is send a basic vendor file and dedicate one employee for typically an hour per week.

How is this possible?

To begin an audit: Lavante can get started working from a data file that in many instances requires less than an hour for clients to generate. AP typically can create the data file Lavante needs and client IT does not need to get involved.  This is all that’s required for a full recovery audit.

To support an ongoing audit: Clients working with Lavante typically require less than one hour per week to receive and upload verified claims and vendor file updates into their system. No onsite Lavante personnel are ever needed to support the effort.

Clients who wish to save additional time can work with their Lavante Account Manager to integrate claims directly into their ERP system.  Lavante will automatically match claims against an internal credit listing, thus pre-checking the credits and enabling clients to upload credits directly as ledger entries with no manual intervention.

Lavante InSight™

For companies concerned about the time commitment or skeptical of the potential benefits of performing a recovery audit, Lavante offers a way for clients to test and sample the service before fully engaging. 

Lavante InSight™ gives you a view of the recovery audit you might have. It generates an estimate of the likely cash recoveries and vendor updates you will receive if you choose to engage in a Lavante Strategic Recovery audit. Utilizing your master vendor file, InSight leverages Lavante’s extensive database of historical audit detail, a proprietary, on-demand software application and our Supplier Network of over two million companies to develop a comprehensive vendor and recovery analysis. InSight previews potential cash recoveries, duplicate and related vendors, recovery projections over time, vendor updates, and more.

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Days Credits Outstanding – a new metric for managing cash flow

Saturday, April 24th, 2010

Days Sales Outstanding (DSO) and Days Payables Outstanding (DPO) are important, widely used metrics to manage working capital.  Financial managers monitor these statistics very closely and regard them as key performance indicators as they work to maximize overall cash flow as well as transactional efficiency.   Through our audit work communicating with extremely large numbers of vendors for Fortune 1000 enterprises, we have begun delivering significant value to our clients based on a new metric that measures and standardizes an important aspect of accounts payables financial efficiency – Days Credits Outstanding (DCO).   

DCO focuses on open credits that are typically not visible to your internal accounting personnel.  Specifically, these credits are aging on your vendors’ and suppliers’ receivables ledgers and, for a variety of reasons, may be outside of your books, or at least not specifically identified with the vendor.  DCO measures the amount of time that outstanding credits are open and available on your vendors’ accounts receivable records before you are able to actualize them as cash to your bottom line.  Allowing your DCO to grow means your cash inflow is being delayed. Given the time value of money, this represents lost cash, even if eventually you do recover the credits.

While aged vendor-side credits are sometimes known to your company, more often they’re not; they’re essentially unseen or lost dollars.  In fact, based on over a million data points, Lavante research indicates that after an open credit has aged over 90 days, you have less than a 20% chance of recovering that credit without third party intervention.   These “lost” dollars add up and can grow to a staggering one and a half million dollars per every billion dollars spent.  Tracking DCO enables your company to bring the management of these dollars in line with your existing standards for managing working capital.

In addition to cash timing implications, it is also important to consider the financial exposure that increased attention to DCO can reveal about your company.  A growing DCO is an indicator of risk because there is a proven likelihood of vendors using unreturned credits to offset unearned discounts and disputed invoices, or otherwise disposing of them as they age beyond a reasonable period.  Ultimately, unclaimed credits that are not used by the vendor are escheated, that is, turned over to the state.  In all of these scenarios, you are losing the cash forever.  A focus on DCO will help bring visibility to the dollars outstanding while driving the age of these items as low as the aging scope cut-off of your audit will allow.

The introduction of DCO as a key performance indicator is significant because it adds a new measurable element to cash management.   It encapsulates the fact that not only is it important to actualize all open credits, but it is also important to realize these dollars in the fastest time frame possible, thus maximizing cash flow.  The cash flow implications of DCO are as relevant to cash management as preventing early payments, or even taking all of your discounts. 

Lavante, with our unique ability to comprehensively collect and analyze vendor-side AR records and thus uncover these “lost” credits, is calculating the DCO metric as part of our audits.  Our clients use it to help them manage their cash flow and as a key indicator of the transactional efficiency of their accounts payables process.

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JPD Financial

Saturday, April 24th, 2010

P2P Industry – Service Providers - Roll Call 2009

#13 of 30 – JPD Financial

General Information: 

In business since the 80’s JPD Financial is a private firm in the recovery audit space that focuses on vendor credits.  They work off site, away from their clients’ facilities and drive their recovery by communicating in mass with their clients’ vendors.   They are compensated on a contingency fee of their recovered claims.   They serve F1000 and F500 clients across multiple industries. Well established in the industry, JPD Financial is a frequent attendee at many different industry events such as IAPP’s annual conference and IQPC/SSON Shared Service events.

IQPC /SSON is the largest and most established community of shared services and outsourcing professionals providing the roof under which key industry experts and organizations share their experience, knowledge and tools.

Analyst’s Note:  JPD’s offering has similar functionality as Lavante’s Strategic Profit Recovery application.  Departments considering JPD’s product are recommended to compare Lavante’s software.

  1. BancTec
  2. American Express
  3. Paystream
  4. Deloitte
  5. Read Soft
  6. Approva
  7. PRGX
  8. Oversight
  9. Basware
  10. Winshuttle
  11. Cast Iron
  12. Coupa
  13. JPD Financial
  14. Scan-One
  15. Ariba
  16. Emptoris
  17. SAP
  18. Oracle
  19. Lavante
  20. OB10
  21. IOMA
  22. Kofax
  23. IAOP 
  24. Interplx
  25. IAPP
  26. AP Now & Tomorrow
  27. Apex Analytix
  28. Y6Sigma
  29. HorsesforSources
  30. ACS

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Posted in AP Industry, Shared Services | No Comments »

Vendor Credit Recovery

Saturday, April 24th, 2010

Vendor credit benchmarking from the front lines.

Every industry has its fair share of reports, surveys, data points, and sound bites.  The Profit Recovery industry is no different.  In the last few years we have performed quite a bit of analysis and benchmarking to uncovered some compelling data  about recovering credits from your vendors and suppliers.

From a survey of over 100 clients and prospects we have discovered that most traditional recovery providers sample only the top 5-20% of your vendor population when reviewing vendor-side credits?  Our survey elaborates (based on feed back from AP professionals) that without the aid of a communication compliance engine (Lavante is the only firm with such an app.)  traditional statement audit reviews, whether they are done by third party firms or by internal efforts simply cannot support indepth vendor penetration with manual methods and cap out at 20%. 

Our vendor credit recovery benchmarking demonstrates that 61% of vendor credit opportunity resides in the lower 80% of your vendor file.  To put it another way, traditional manual methods, will find, at most, 39% of credits available to you.

Another fact you may not be aware of is that 37% of vendor-side claims come from product returns.  This category is by far the largest we are tracking.  And it has huge implications not only to the existing process you have for returns transactions, but also on where your profit recovery audits should focus.  In contrast, we’ve found that only 9% of vendor-side claims are the result of duplicate payments.  Keep in mind that hese numbers vary depending on industry.   

Some other interesting metrics indicate that the average claim amount from a vendor credit recovery review is $817.  (with a range of about $400-$1200)  We have also discovered that the actual recovery potential for vendor credit recovery is $600,000 -$900,000 per $1Billion in addressable spend volume. Although we are the only recovery provider to project recoveries below the typical industry benchmark ($1M per $1B in spend) we feel confident that this carefully calculated metric passes both the scientific test and a gut test as well.  When we approach new prospects and we explain that depending on their industry they stand to recovery within this range that data is always well received based on what they have actually seen from other firms and not what they have been promised.

Based on our discoveries, we have also determined that for every month you do not perform an in depth automated vendor credit review you risk  losing $63,000 per billion dollars of spend with no chance of recovering it.  While $63,000 may not be a huge amount for you, if you spend multiple billions of dollars, and delay just a quarter’s time, that $63,000 figure becomes a large sum of money.

If you have any more questions about our benchmarking survey please join the conversation…

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Our Latest News: Recovery Audit Technology Leader Lavante Continues Record Growth

Saturday, April 24th, 2010

On Wednesday, we released a straight forward news story about our Q1 success: Recovery Audit Technology Leader Lavante Continues Record Growth.   The story reported that we are growing quickly and that we are moving to a new larger facilty in San Jose.  The story was very direct and did not elaborate on too many details.   I was suprised by a volume of incoming emails and calls asking for more details.  On Wednesday alone I heard from three clients and three reporter/analysts.  More emails and calls continue to make there way in… 

I’d like to elaborate a little bit more on the story for the Lavante watchers in the audience.   Our new grade A facility is in the Santa Teresa area of San Jose and the property manger tells me it is over 26,000 square feet!  I do not want to risk a blister trying to walk through and measure it myself.  We plan to have our entire operation moved over in a couple months, but we are in the middle of three major trade events in the next month and we are rolling out a brand new product in three weeks so some of us are having a hard time packing our boxes.  (uh-oh… more phone call and emails from that “new product” teaser I am sure)

Regarding new business… how do I put this?  As the articles inicates, Q1 was a record quarter, but we’ve nearly already beat it in April alone.  Yes you read that correctly.  Clients are closing more quickly and they are growing larger in size…  In 2010 we have begun workng with three of the largest private companies in the U.S. and our new public clients are averaging a Fortune rating of F297.

I hope that answers any questions, but I am always available to discuss further.

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Recovery Auditing Misconception #3 of 4

Friday, April 23rd, 2010

Recovery Auditing Misconception #3:  Profit Recovery is not a current Priority and I can afford to wait. 

The Short Answer

You may not be aware of it, but credits age and disappear over time. Once gone, they can’t be recovered. Our results show that delaying Lavante’s review could cost your company $62,500 per month for every billion dollars of your annualized spend. That’s for every month you delay. 

Why?

Lavante’s core product focuses on the AR balances of your vendors and discovers credits that you didn’t even know existed.  However, vendors are constantly reconciling and cleaning their AR records.  Unapplied credits have a “shelf-life:” as they age and go unclaimed, they’re applied by the vendor to offset unrelated disputed invoices or unearned discounts, or eventually written-off.  Unlike client AP records, there often isn’t a historic database that preserves ledger entries after they have been removed.  Thus, if a vendor removes a credit from their AR record, then it’s usually lost with no possibility of recovery. 

Lavante’s exhaustive benchmarking metrics point to a number of reasons why it is vital to begin the review immediately. 

  • Based on over a million data points, Lavante research suggests that after an open credit has aged over 90 days, you have less than a 20% chance of recovering that credit without third party intervention.  This subset of credits that age beyond 90 days accounts for potentially millions of dollars on an annual basis and should be part of your existing standards for managing working capital.
  • Lavante recovers for clients a consistent range of between $600,000 and $900,000 per every billion dollars in addressable spend. If not audited, this is the amount lost annually (see the figure below) due to vendor aging activity. This recovery history suggests that every month you delay reviewing these dynamic vendor records, you stand to lose $63,000 per billion dollars you spend (1/12th or 8% of your potential annual recovery opportunity).  

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Accounts Payable Best Practices Closer Than You Think!

Sunday, April 11th, 2010

Accounts payable best practices are closer than you think.  Recently I was asked to help review a handful of workshop presentations that are going to presented at an upcoming association event.  I am not exactly an expert like the folks that submitted the presentations, but I could be counted on the make sure the proper format was being used and I spotted a couple typos along the way.  In my review I was struck by the high quality of material that was submitted (and will be presented).  My sample of presentations covered avoiding fraud; enterprise software upgrades, p-card programs, profit recovery auditing, staff development, among a few other items.

A thought occurred… it is very common for associations to sponsor events where a large volume of workshops are presented for pure peer-to-peer education purposes.  Sadly these presentations are one-time events, but the value they present is relevant for many months or years beyond the show at which they are featured.  I think folks in the AP field that are looking for answers and resources to help solve business problems can  rely on large associations.  Any person looking for material need only call into their preferred association and ask for the person that oversees education for the association and you will likely be connected with the person that oversees workshops, panel discussions and presentations.  That person will be connected to a number of professionals with very insightful things to say about nearly unlimited business issues.  In addition, that person will also know what the feedback is like about the speakers and can point you in the right direction.

Even if you do not attend national or regional events and you have not been exposed to peer-to-peer educational seminars you are still only a couple phone calls away from someone who has not only accomplished what you are attempting to do at work, they have become an expert on the subject and they are now trying to educate others.    Just remember that when you become the expert to return the favor.

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