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.

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.

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.

The webinar focused on the following:

* Minimizing the impact and time required to access real-time SAP Financial data
* Leveraging access into your supplier records to drive dollars back to your company’s bottom line
* Improving the accuracy of financial data and supplier records in your ERP System
* Using the Winshuttle/Lavante solution to self-fund the joint-installation of both technologies

Click here to see a short video with an overview of what we discussed in the session.

And, to view the webinar, please click here.

I’d love to hear your thoughts about the material presented.

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.

“Lavante is the leader in technology for recovery auditing.  Its unique recovery solution automates the traditionally manual process of vendor statement audits, delivering multiple times the results of traditional approaches to customers in near immediate timeframes.”

Andreas also states, “Lavante’s supplier information management solution, combined with its recovery auditing solution, is the killer application to drive rapid adoption of the Lavante Supplier Network.  SAP Ventures sees a massive market opportunity for Lavante.”

This is great validation of our strategy!

The strategic investment will help Lavante continue our market momentum and customer acquisition, as well as accelerate investments into product development.  We will continue to grow our ground-breaking on-demand supplier management solutions – including recovery auditing, supplier information management and TIN management and to drive adoption of the Lavante Supplier Network™.

We are excited by the confidence SAP Ventures demonstrates in Lavante’s ability to deliver meaningful technology advancements for the supplier information management and recovery markets.

I welcome your thoughts about this announcement and your ideas about how you feel technology can be applied to the recovery and supplier information management markets.  Please send me your ideas, thoughts, questions and comments!

To read the full Lavante press release about this funding announcement, please visit: http://www.lavante.com/news/lavante-series-c-funding

The Article features conversations with executives from Lavante and Ariba discussing how their firms are creating new cash flow metrics that are helping financial executive watch there bottom line a little more closely.

Joe Flynn, CEO of Lavante discussed how Lavante’s DCO metric (which measure the weighted average of days that a credit is outstanding until it is collected by an enterprise) has become an important tool for companies to maximize the cash flow associated with recovery auditing.  The article includes the following quote from Flynn, “Everyone’s saying, ‘Wow, I didn’t know you could actually track that.  There’s a whole host of line items of credits you’re not aware of out in your supplier population. It’s like your working capital trapped in your supply chain.”

The article also highlights a conversation with Peter Lugli, senior director of working capital management and business development with Ariba.  Lugli discusses the “cash conversion cycle” in depth and adds,  “There’s this renewed emphasis on the cash conversion cycle.  The CFO and controller are looking at their operations through the lens of cash flow more than they did before.”

READ MORE HERE

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Lavante Recovery is the industry’s premier statement audit product.  The Lavante Recovery application and services are built on the industry’s most powerful platform for communicating with suppliers, collecting AR data, discovering credits and delivering recoveries to clients.  Lavante Recovery targets the entire addressable supplier population without bias and commonly achieves compliance rates above 90%.  It is systematically impossible for any other competitive statement audit process to out-recover Lavante’s process.

Lavante’s outreach includes initial and ongoing requests for AR data as well as follow up requests for non-compliant suppliers.  Follow-up requests alternate by email, fax, mail and phone to maximize exposure and response rates.   Lavante electronically archives all incoming documentation and data per supplier per client for retrieval at any time. Dedicated auditors review all documents for potential credits and communicate directly with the supplier to secure written verification of all claims.  Recoveries are delivered to clients via an on-demand application in weekly batches accompanied by supporting documents and communication detail.

Based on ten years of benchmarking, Lavante has determined that 61% of credit-generating suppliers are distributed throughout the lower 80% of a company’s addressable vendor master file.  Through their expansive review, Lavante delivers clients between $600,000 and $900,000 per every $1 Billion audited.  In addition, Lavante delivers a complete suite of supplier reports and best practice recommendations for vendor file management.

A statement audit, done correctly, should include a review of all addressable suppliers and will uncover 10–20 times the statement audit claims of a traditional recovery audit.  A specialized statement audit firm focuses their attention on nuances of the vendor master file as well as the AR records of the individual supplier.  A proper statement audit includes a thorough review of supplier relationships and should also provide some mechanism for patching the missing and/or inaccurate data that commonly plagues a company’s supplier records.

Specialized statement audit firms must perform two-way communications with a massive volume of companies and should demonstrate an automated method for soliciting, tracking, re-soliciting (if necessary), collecting, archiving, retrieving, and performing workflow for supplier AR records.  An ideal system will also include consideration for leveraging many different forms of outreach (email, phone, fax & mail) to maximize compliance.

Considering the communication and work flow demands of a proper statement audit, it is understandable why traditional firms cannot perform the large scale review.  Traditional methods for reviewing client-side data simply do not translate into a successful statement audit.   Only a firm specializing in statement auditing should perform the review.