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.

Procedures and Fixes for Vendor File Management,  AP Journal Online, January 2012.
Sherry DePew, Lavante’s vice president of product management, outlines the value of vendor files and an ongoing process for vendor-file cleansing.

Best Practices for Ongoing AP to AR Reconciliation in the Supply and Demand Chain, Accounting Software 411, January 2012
In this piece, Lavante CEO Joe Flynn shares valuable best practices to help companies drive a successful statement audit with their supplier base.

Finding the Dollars in the Haystack, Institute for Supply Management, December 2011.
Here, Henry Ijams, an analyst at PayStream Advisors, offers real world advice on statement auditing, with best practice methodologies in selecting a technology solution to conduct a comprehensive recovery audit that maximizes results. He outlines effective methods to uncover missing credits while reinforcing positive communication and liaison with valued suppliers.

Creative Credits – How Vendors Can Use Your Credits to Their Benefit if You’re Not Looking, Financial Operations, December 2011.
This article, written by Lavante’s vice president of product management, Sherry DePew, gives readers a unique view into the risks associated with leaving vendor credits on the books.

In addition to these resources, you’ll find a wealth of best practices and real-world guidance by joining an upcoming Lavante event or on-demand webinar.

Lennox selected Lavante, in part, because of our ability to deliver: comprehensive statement audit process;  patented, SaaS technology allowing seamless access to all results through a web-based portal;  speed and ease of deployment which delivers fast, continuous results, and; vendor file management and data cleansing as part of the recovery process.

Lavante’s patented SaaS technology continues to drive a differentiated offering for companies looking to maximize recovery dollars.  Because of our automated processes, Lavante Recovery is able to reach out across the breadth of a company’s supplier base vs. a small sampling which manual process-based services are limited to.  Our web-based portal also provides our users with seamless access to real-time reports and a view of every aspect of the recovery process.

The speed and ease of deployment are other important criteria to Lavante customers.  Our solution does not  require on-site personnel nor extensive, complex data collection procedures, making it fast and easy to deploy.   And in today’s business environment, where companies are forced to take on more and more task with fewer resources, our customers recognize that Lavante Recovery deployment has minimal impact on both AP and IT staff.

Another important feature noted in this announcement is the inclusion of vendor file management and data cleansing as part of the entire recovery process.  Our outreach to the majority of suppliers combined with over 2  million suppliers in the Lavante Supplier Network means that we update and cleanse your vendor contacts, which also helps to identify potential duplicate vendors.

We are excited to be working with Lennox Industries, a leading provider of customized home heating, cooling and indoor air quality products.   Click here to read more about this recent announcement.

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.

His next post, Lavante Recovery – A Risk-Free Way to Segue Into SIM  expands the conversation to discuss Lavante’s Recovery Audit solution, which has built-in SIM-type capabilities.  And, the article continues to cover how Lavante works to “identify omissions, errors, and inconsistencies in your supplier data.”  What I saw as the vision of the two posts is the clear connection Michael makes between clean supplier data (and the ability to keep it updated on a continuous basis) and the ability to drive the maximum recovery effort.

“The benefits of good supplier data and multi-channel reach-out cannot be underestimated where recovery audits are concerned…. With respect to the former, cleaner supplier data makes for more complete transaction data, which not only increases the chance of finding a duplicate, incorrect, or fraudulent transaction — but improves your follow-on spend analysis efforts (and results). As a result of its supplier data cleansing effort, Lavante is typically able to process at least 95% of spend through its recovery audit solution, which maximizes the chances that it will find the majority of your recovery opportunities.”

Our company’s founders, Joe Flynn and Tom Flynn, saw the connections between clean supplier data and maximum recoveries when they built out Lavante’s solution set.  Our SaaS-based solution set starts with an automated outreach to the breadth of our client’s suppliers, and then continues to update records through our supplier network database, now with over 2.3 million suppliers.  The continuous communication with suppliers results in very high compliance, which keeps our client’s vendor records current, driving the maximum amount of credits possible.

Michael is very astute in his observations and analysis.  I have been in supplier management business for 25+ years and very few are able to connect the dots between Supplier Audit Recovery and Spend Analysis.  In a future post I will dig further into Doctor’s comments on how Recovery leads to cleaner supplier data resulting in improved spend analysis, which in turn provides better sourcing and more effective supplier management.

If you are interested in this connection of vendor file management and data cleansing processes, as well as statement audit please visit our website.  And, click here to read more about Michael Lameraux and his Sourcig Innovation.  The two blog postings referenced here can be found at: Recovery Audits – Are they Worth It, Lavante Recovery – A Risk-Free Way to Segue Into SIM .

Statement Audits: There was considerable interest in the presentation by one panelist who presented how automating the statement audit process using Lavante Recovery has delivered a steady stream of credit recoveries, beyond what was anticipated – in the first year over 1% of auditable spend was recovered. He covered how his company had moved from an inherited manual/paper based system to Lavante’s automated, web-based solution, which has provided seamless access to results through the online web portal. Lavante’s ability to automatically connect to and audit the breadth of suppliers vs. a smaller subset that a traditional recovery process would target, had an added benefit of improving communications and the overall relationship with vendors.

This focus on the importance of supplier relationships spilled over into the next hot topic the panel uncovered:

Supplier Management Portal: The need for an easy, transparent way to connect with suppliers and improve the supplier service function was another hot discussion topic. There were several presentations focused on this topic. One presenter focused on the process now underway to implement a vendor portal to the organization, leading with the findings that internal development of a supplier management portal would be cost prohibitive. Important issues in selecting a vendor were identified as: data integrity, eliminating duplicate vendors, and maintaining an accurate active vendor file. Ease of use, workflow approvals, and an increased turn-around time for approvals were also important elements cited. Questions about what incentives would drive vendors to join the network centered on the benefits vendors would enjoy and the possibilities of customizing the approaches for different types of providers.

I applaud the conference organizers (this was the first IFO conference in Toronto) in including this along with many other technology-oriented sessions at the event. Thank you to all of the panelists and audience members for a thought-provoking session. And, please check our website for more information about Lavante Recovery.

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.

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.

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.

The same innovation and fearlessness that was present in Joe’s Irish ancestors are apparent in him today. Joe’s achievements in technology are a simple matter of identifying an opportunity and being undaunted in the pursuit of his goals. Joe grew up in the recovery audit industry and recognized a massive opportunity for large corporations to recover credits that are sitting unrecognized at their suppliers. He also realized that the manual processes used in traditional recovery audits were not going to scale to support an ongoing, full-scale review of supplier AR records, leaving a significant percentage of these dollars undiscovered. Joe founded Lavante (originally Audit Solutions) in 2001 with the vision to build the processes, technology and applications to help companies find these untapped dollars and drive them to their bottom line. From Joe’s original vision, Lavante has grown to not only a well-respected solution but one that has fundamentally changed the recovery industry, with solutions that help Fortune 1000 companies across industries find more dollars, with near immediate results.

Joe was just one worthy recipient in the ITLG ceremony, surrounded by a many others who have all descended down from a proud and hard working culture. Lavante thanks the ITLG for creating this award, for shining a well-deserved spotlight on Irish and Irish-American leaders, and for recognizing our fearless leader Joe.