Electronic Invoice Presentment and Payment (EIPP):Streamlining the Payment Process... Presented by: Scott Hesse August 9, 2010
Post Lunch wake up…. Old McPayments had a farm. EIPP-O And on his farm he processed invoices EIPP-O Paper was here and paper was there.. here a paper there a paper everywhere was paper paper Old McPayments had a farm. EIPP-O On his farm he wrote many checks EIPP-O Write them up, stuff them in. stamp them up, mail them out Old McPayments had a farm. EIPP-O Old McPayments saw the light EIPP-O He knew ‘lectronics was the way to go EIPP-O E-Invoice here, Present and pay there, invoices gone, checks no more, ACH came through the door Old McPayments had a farm. EIPP-O
Agenda • Payments: Today • Electronic Invoicing… A brief history. • What is EIPP? • What does EIPP offer organizations? • Who needs EIPP? • What is the cost of paper? • How might EIPP integrate with a state’s current systems? • How does EIPP work? • Questions
Payments Today • 2003: U.S. Federal Reserve cuts check-processing offices in half; shrinkage continues. • 2003: Check 21 Act: Stop the flow of paper checks. • Digital images of checks • Substitute checks • 2004: Electronic payments outpace checks • Electronic payments have doubled since 2000. • Contactless technology • Car key, camera, watch, mobile phone • Go-Tags • Digital wallets • Are cards needed? • Embossed letters no longer needed • No account number on card eventually • Goals: Speed up payments and reduce societal dependence on paper.
History • Electronic Invoicing began in the early 1960’s in the US. • The first iteration of EIPP came from the railroad industry in the form of EDI. • Retail leads the way. First UPC Code scanned in Troy, OH in 1974. • First EDI standards developed in early 70’s with ANSI X12 standard being adopted in 1981 • Emerging technologies… imaging, Internet, collaborative networks
What Is EIPP? Online Bill Pay For Organizations
What Does EIPP Offer? • A collaborative web-delivered payment network • Online bill pay for business transactions • Participants: • Buyers (State/Agencies) • Sellers (Suppliers) • Third Party Stakeholders • All parties review and manage their transactions over the Internet • Program benefits equitably applied to all parties
EIPP Benefits • Eliminate no-value touch points in the invoice receipt process • Control over same day invoice receipt and faster processing (maximize touch-less processing and routing) • Eliminate/reduce exception handling with Pre-payment Audits • Expand front-end discounts • Faster payment processing best positioned for card product payment, rebate and/or dynamic discounting • Earn Procurement’s negotiated discount terms • Generate incremental discount terms and rebates to become profit center • Value Add: Exception reporting for core resolution Source: The Accounts Payable Network (TAPN), August 2010
Who Needs EIPP? • Economic downturns/ Short-staffed/Budget shortfalls • High percentage of paper (Invoices and/or Checks) • Legacy Accounting/Finance systems • Planned or currently implementing new ERP • Multiple locations • Limited or dated reporting capabilities • High volume of transactions • Complex Transactions: Data Capture • Line Item Detail (GL Account Number) • 3-way matching (Order/Invoice/Receipt)
Fast Facts 1: The Cost of Paper • Paper is The Rule • 79% of invoices received manually • 63% of payments made manually • Significant Performance Improvement • Cost to process an invoice • 2004: $34 • 2006: $22 • 2008: $14 • In the past 2 years, role of A/P has become more strategic in 56% of agencies. 18 months ago, 40% of agencies believed A/P was playing a “more strategic” role. Source: The Aberdeen Group A/P Strategies for Success October, 2008
Fast Facts 2: The Cost of Paper • Paper invoices cost 74% to 89% more to process than electronic invoices. • Over 60% of agencies lack visibility into primary A/P spend and invoice data. • • 40% of agencies indicate they have the budget and intent to invest in A/P automation solutions in the next for 12 months. • Specifically, research by Aberdeen estimates that fully automated operations can save $10.87 per payment – approximately $1.1 million in savings for agencies processing 100,000 B2B payments per year. Source: Aberdeen Group: The E-Payables Benchmark Report Advancing Accounts Payable Automation, March 2007
Exception Collaboration A/R Data to Supplier ERP A/P Data Electronically to State ERP Supplier Trade Documents Invoices State/Agency Trade Documents Contracts, P.O.s, Receipts Automated Prepayment Audits State Business Rules State Accounting Policy Compliance How Does EIPP Integrate? Online Collaborative Network On Demand, Networked, Internet Access Solution
1- Orders for Goods or Services 1b – Reference Doc Audits (e.g. orders, receipts) 4 – Invoice Approval 2 – Invoices (electronic or paper) 5 –Posting data To ERP system 6- Payment with Detailed Remittance data 3 - Audit EIPP Process Flow example Buyer State or Agency Seller Shared Serviceor EIPP Network 7 - Analysis
Where’s the puck??? A reporter was interviewing Wayne Gretsky and he asked: "Why are you always where the puck is?" Wayne answered: "I'm not. I'm where the puck is going." Electronic Invoice Presentment and Payment is where the “Payment Puck” is going!
Questions U.S. Bank Scott Hesse, Corporate Payment Systems Public Sector email@example.com 240-420-1992 Electronic Invoice Presentment and Payment (EIPP):Streamlining the Payment Process...