2014 Microsoft Dynamics Report Completing P2P with Cloud Technology

Q4 2014 | Featuring insights on... »» Current Market Trends in Microsoft Dynamics ERP Usage »» Common Pains Resulting from Microsoft Dynamics ERP Usage »» Benefits of Cloud-Based Software »» Guide to Leveraging Third-Party Solution Providers with Microsoft Dynamics

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Contents

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Introduction

3

ERP Market Game-Changers

5

The Missing Links in Microsoft Dynamics ERP

7

Completing Microsoft Dynamics with the Cloud

12

Calculating Success With Care and Consistency

16

Selecting a Solution

18

Creating Opportunity for Success

20

ReadSoft

22

About PayStream Advisors, Inc.

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Introduction Since the 1970s, Microsoft has been a prominent name in the technology industry, providing consumers and businesses alike with revolutionary computer hardware and software products. In 1984, the company purchased Navison, thus launching a new line of ERP software, Microsoft Dynamics. The Dynamics ERP applications are designed to improve organizations’ business processes by connecting the supply chain and automating non-value-added business tasks, among other functions. The ERP includes five leading products originally gained from acquisitions: Microsoft Dynamics NAV (formerly Navison), GP (Great Plains), SL (Solomon), AX (Axapta), and C5 (Concorde). While Microsoft Dynamics AX is built for larger, enterprisewide implementations, the remainder of the Dynamics suite (especially GP and NAV) is geared towards small and mid-sized enterprises (SMEs). While Microsoft’s offerings are useful and versatile, most of the changes and customizations to the Dynamics system must be executed through one of Microsoft’s resellers. This can cause difficulties and high costs for MS/Dynamics users.The complexities of Microsoft Dynamics’ system, like other large ERPs such as SAP and Oracle, can lead to additional processing difficulties. However, unlike SAP and Oracle, Microsoft’s ERP only has a small collection of key AP processing solutions. As a result, its users often encounter gaps in the system’s processing abilities, preventing a fully holistic automated AP lifecycle. Fortunately, P2P automation is transforming to make room for powerful, versatile software innovation. Non-native solutions—those not directly maintained by Microsoft Dynamics—bring more value, scalability, and functionality than MS/Dynamics’ native applications. This cloud-based software can address inefficiencies in today’s business world that larger database systems like Dynamics are not as equipped to handle. PayStream Advisors’ 2014 P2P for Microsoft Dynamics report explores the landscape of AP and financial applications as seen by MS/Dynamics and other ERP users. Results from a survey of financial professionals across several industries reveal market trends in the use of AP automation by users of different ERPs, as well as the major pains for Dynamics users compared to those of non-Dynamics users. In addition, this research shows how today’s cloud-based financial software compares with Microsoft Dynamics’ native applications. This report also includes best practices for companies wishing to leverage third-party solutions with their MS/Dynamics ERP.

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ERP Market Game-Changers In the AP and business process automation industry, two of the oldest providers of ERP software are SAP and Oracle. Both companies’ applications have seen great success and wide adoption, and with SAP in use by almost a quarter of the world’s organizations, it is the leading ERP provider in the global business sphere today, see Figure 1. 6%

Sage 6%

6% 12%

Figure 1

Infor 6% Microsoft 5%

5% 2%

Global ERP Software

2% 2% 2% 1%

24%

Kronos 2% Concur 2% IBM 2% Totvs 2% Yonyou 1% Others 37% SAP 24% Oracle 12%

37%

(Source: Gartner, “Worldwide ERP Software Market Share,” 2013.)

However, newer software companies are closing in on these industry giants, and the market share is shifting to make room for Sage, Infor, and a host of other ERP providers—including a large number of gamechanging, cloud-based technology vendors. The use of cloud-based, SaaS (Software as a Service) platforms is growing in large part because of their highly configurable design; they are built to accommodate many kinds of businesses and adapt quickly to those businesses’ growth and needs. Microsoft Dynamics is currently being used by 5 percent of the world’s organizations. Although this is a relatively low portion of the market, the company’s adoption rate is increasing rapidly. Between 2011 and 2012, Microsoft achieved 4.2 percent revenue growth, increasing from $1B to $1.1B1. In addition, Microsoft is currently second on the Forbes list of the World’s Most Valuable Brands2.

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Dynamics’ growing popularity is partially due to the similarities between their implementation and design and that of cloud-based software. Like cloud-based solutions, Microsoft Dynamics’ ERP offers relatively short implementation periods, low degrees of process disruption during implementation, and high resulting functionality. However, in many areas of AP and P2P processing, Microsoft’s offerings are lacking. Much of the difficulty in using Microsoft Dynamics’ applications lies in their complicated design. The ERP’s complex technological framework makes its solutions difficult to customize without the help of expensive Microsoft resellers. Moreover, while the Dynamics ERP products provide some valuable components of AP automation, they do not offer all that is available in current P2P technology. Overall, Microsoft Dynamics, while diverse and promising, is unable to meet customers’ changing expectations of faster, versatile, and affordable customization, as well as more holistic automated processing. In contrast, cloud-based solution providers focus on offering dynamic, integrated capabilities at a great value, making them increasingly vital for back-office efficiency.

1 Gartner, “Market Share Analysis: ERP Software Worldwide,” 2012. 2 Forbes, “The World’s Most Valuable Brands,” 2014.

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The Missing Links in Microsoft Dynamics ERP For businesses that already use Microsoft Dynamics as their database, it is the next logical step to move towards full processing efficiency by automating their AP and P2P processes. However, Microsoft offers little in terms of complete invoice receipt-to-payment functionality. Survey results show that among electronic methods of invoice submission, most MS/Dynamics users report low use of more modern entry methods—EDI, web portal, and eInvoicing network, see Figure 2. Figure 2 MS/DYN users show low usage levels of some electronic invoice receipt methods

98% 99%

96% 80%

“Which of these methods does your organization use to receive invoices?”

2011 87%

2014

55% 45% 35% 24% 9% Paper

Fax

Email

EDI

8% Web Portal

1% eInvoicing network

Despite this low level of electronic invoicing receipt methods, MS/ Dynamics users have high levels of automation in other areas of the AP process. Survey results indicate that MS/Dynamics users send more POs electronically than non-MS/Dynamics users, see Figure 3.

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45%

MS/DYN Users Non-MS/DYN Users

37%

27% 20%

20% 15%

15%

12%

9%

Figure 3 MS/DYN users send more electronic POs “What percentage of POs does your organization send electronically to suppliers? “

0% None

1-10%

11-25%

26-50%

More than 50%

MS/Dynamics users also have a healthy amount of electronic integration, at a competitive level with non-MS/Dynamics users. Results show that MS/Dynamics users’ invoices are related to purchase orders almost as often as non-MS/Dynamics users, see Figure 4. 44% 45%

MS/DYN Users Non-MS/DYN Users 30%

Figure 4

23% 24%

21%

MS/DYN users have healthy PO and invoice integration “What percentage of your invoices are related to a PO? “

1%

4%

We do not use POs

3% 1-10%

5%

11-25%

26-50%

More than 50%

However, in other areas of their AP, Dynamics users’ integration is not as strong. Most MS/Dynamics users report that a low percentage of their incoming invoices are paid electronically, see Figure 5. This is primarily due to a disconnect between Dynamics users’ invoice receipt and their payment systems.

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35% 30%

17%

8%

Figure 5

5%

MS/DYN users pay few invoices electronically “What percentage of your invoices do you pay electronically?”

Figure 6

2% None

1-10%

11-25%

26%-50%

50-75%

More than 75%

These inefficiencies in the payment process are unusual, considering that Microsoft Dynamics users report a high level of automation in this area. Survey results show that Dynamics users have a substantially higher level of electronic payments adoption than non-MS/Dynamics users, see Figure 6. 93%

97%

MS/DYN Users 84%

MS/DYN users use high levels of electronic payment methods

Non-MS/DYN Users

40%

“Which of the following technologies does your organization currently use? “

50% 34%

40%

40%

37% 25%

Purchasing Cards

Electronic Payments

Automated Workflow

OCR /Data Capture

Front-End Imaging

The main reason MS/Dynamics users are having difficulty in their payments process is inefficient invoice management. These companies report that the top reason they miss discounts is the manual routing of invoices, see Figure 7.

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Manual routing of invoices Missing information on invoices

75% 23%

Large numbers of exceptions Lengthy approval cycles

Figure 7 MS/DYN users miss discounts because of inefficient invoice procedures “What are the prevailing reasons for missed discounts in your organization?”

43% 30%

Lost invoices

37%

Decentrailized invoice receipt

34%

Inefficient invoice management is also apparent as a problem in survey results revealing the benefits MS/Dynamics users would most like to achieve with AP automation. Most respondents hope to achieve fewer lost, missing, or duplicate invoices, see Figure 8. Fewer supplies inquiries

20%

Reduction in FTE/ processing costs Figure 8 MS/DYN users want an improved invoice management process “What are the greatest benefits you hope to achieve from an eInvoicing solution? “

Increased ability to capture discounts Improved vendor satisfaction

Reduction in exceptions /discrepancies

Quicker approval times Increased on-time payments Fewer lost or missing invoices

Q4 2014

24% 20%

Fewer duplicate invoices

Better visibility across the transaction

9

40%

57% 33% 37% 45% 39% 70%

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In all, this survey’s findings show that while Microsoft Dynamics users report a decent amount of integration across many areas of their AP processing, users are experiencing breakdowns in efficiency—primarily in their invoice management and payments procedures. PayStream has found that these problems often occur when companies use a business solution incapable of dealing with the complexities of their ERP. Issues also arise when a provider’s set of offerings is incomplete. In this case, Microsoft lacks a truly robust set of AP tools to streamline the full invoice receipt, management, and payment lifecycle. Although Microsoft Dynamics is a reputable provider in the software market, the missing links in their products’ offerings are keeping them from fixing common AP problems—pains their competitors’ flexibility and advanced design enables them to conquer.

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Completing Microsoft Dynamics with the Cloud While Microsoft Dynamics is an established and reliable ERP and a valuable component of many organizations’ business structures, this report’s findings show that their business applications are not complete enough for productive and efficient P2P processing. However, the advantage of cloud-based technology is evident in organizations’ ability to leverage third-party solution providers and fill in the key functions that Microsoft’s system misses. Among the things Microsoft Dynamics users are looking for is a connected method of invoice ingestion—they want a streamlined way to receive invoices in different formats and from different locations, and to automatically transfer those documents to the Dynamics ERP system. This fully automated process would grant them a faster turnaround time, increased ability to capture early payment discounts, and more efficiency in other many AP areas. Essentially, Microsoft Dynamics users want the seamless integration of the reliable Dynamics ERP and a holistic set of AP and P2P solutions. By picking and choosing from today’s best-in-breed cloud solutions, companies can optimize their purchasing and payables to create organizational synchronization that results in ROI and company growth. These new solutions offer the benefits of configurability, scalability, and value. Before organizations decide how they wish to implement cloud-based solutions, they need to fully understand an efficient P2P process. Once they are familiar with the necessary components of streamlined processing, they will know how to create an optimized framework of AP and P2P applications, see Figure 9. Procurement Management

Purchase Order Delivey

Invoice Receipt

Data Extraction

Invoice Matching

Approval Workflow

Payment & Remittance

eProcurement & Supplier Collaboration Electronic Invoice & Workflow / Matching Payments & Working Capital

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PayStream has identified 17 areas that impact automated accounts payable processing from the point of receipt all the way to payment. This list is comprised of the various checkpoints companies should evaluate and compare with their own departments and processes. Some of their automation tools may be functioning optimally, while others may be causing more problems than they are worth. Other tools may be completely foreign to a company, or may be considered unnecessary or too expensive. While business needs vary across industries, PayStream recognizes the value in each of these functionalities for the enhancement of P2P. 1. Invoice Submission – The system should facilitate the exchange of invoices between buyers and suppliers by supporting several methods of supplier-submitted invoicing including PO flips, blank e-forms, standard templates, and direct integration (Electronic Data Interchange [EDI]) with a supplier’s ERP system. 2. Document Scanning – Having all invoices sent to a single location for scanning is preferable, but not always practical. In decentralized organizations, the best practice is to receive paper invoices in regional scanning centers and then scan to one central repository. 3. Compliant and Secure Storage – The ability to capture and then maintain both structured and unstructured data must be accomplished within a secure environment that is not only compliant with all relevant regulatory and industry standards, but also extends to the integrated process. 4. Invoice Recognition – It is very important to be able to capture line items and not just header data. Without line item details, automated systems must forego the use of advanced matching and business rules to decipher apparent exceptions. The use of freeform ICR or IDR can provide a greater level of automation compared to a template-driven OCR process. 5. Invoice Validation – The system must check every invoice for duplicity and mathematical integrity. In a portal environment, checking invoices against a set of buyer-defined criteria and requiring suppliers to correct any errors before the invoice is accepted provide an additional layer of validation. 6. Invoice Matching – This involves matching invoices with purchases, goods receipt documents, and/or contracts based on

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criteria configured in the system. The system should also route any match exceptions for review and resolution. 7. Workflow Configuration – Administrators need the ability to configure and change the business rules that determine how invoices will be routed to appropriate users for review and approval. 8. Alerts and Notifications – The system should notify approvers of invoices pending their review and escalate invoices to managers if no action is taken within a specified period of time. 9. Payment Processing – The steps that buyers take to initiate, post, and execute payment—including preparation, processing, and submission of the payment file to the financial institution—need to be seamless. 10. ERP Integration – Besides the exchange of transactional data between the invoice automation solution and the ERP, this stage also includes integration with and posting of the payments to buyers’ GL and accounting systems. 11. Remittance Management – Sending the remittance information to suppliers via the portal in a format of the suppliers’ choice is critical so that they can easily transfer the remittance advices into their receivables systems. 12. Travel & Expense Receipts – Capturing paper receipts, either scanned or via a mail service, and matching those items to submitted expense reports or credit card downloads (in addition to providing confirmation to the employee), must be integrated with workflow to provide approval, exception/discrepancy handling, and delivery to AP. 13. Card Management – The ability to capture complete details on all card transactions is a necessary step in order to support workflowdriven cost allocation and expense reporting activities, as well as monitor usage compliance. 14. Contract Management – Leading-edge firms are implementing automated contract management capabilities (typically for handling non-PO invoices related to leases, utilities, and other recurring bills) to further reduce manual processing.

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15. Mobile Apps – Delivering tasks and supporting documents to a mobile device facilitates approval by executives who travel regularly. Most solutions on the market today provide mobile functionality. 16. Business Intelligence – There is a wealth of information gleaned fromthe P2P process, which can be used not only to comply with regulatory requirements, but also to provide valuable business intelligence for strategic spend analysis. 17. Supplier Network and Portal – The relationships companies have with their suppliers are vital in many areas of productivity and efficiency. Supplier portals give vendors power and freedom in the process, as well as reducing time and money spent on support issues. Implementing a robust supplier-focused solution is one of the greatest strategies when building optimized P2P.

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Calculating Success With Care and Consistency When a company is implementing new technology, they must keep in the mind that the AP process comprises a number of moving parts. To ensure that nothing falls through the cracks, they should also implement a number of key performance indicators (KPIs). This will smooth the transition from Microsoft Dynamics’ native apps to thirdparty solutions, and it will further ensure that the company is leveraging additional software to their greatest benefit. Here are several KPIs to track: Average Cost to Process an Invoice (by Invoice Type) – Calculating processing costs can provide valuable insight, and while this includes salaries and benefits, facilities and hardware, software and IT support, and managerial overhead in cost calculations, invoice processing costs are one of the most basic to measure. Processing costs by type of invoices should be calculated (e.g., clean vs. exception), as well as cost of the steps involved in each process (e.g., data entry vs. exception resolution). For Microsoft Dynamics users hoping to reduce processing costs, measuring these metrics is important to determine how much value can be derived from a new invoicing solution. Exception Invoices as a Percentage of Total Invoices – Exception invoices cost much more to process than clean invoices, and can drive up the overall processing costs for AP. Microsoft Dynamics users reported that missing invoices was a big problem for their organizations, and understanding and addressing the sources of exceptions is critical to reducing their occurrence. Companies should track the number and dollar value of invoices that land in the exception queue and compile details for further review (e.g., expense type, vendor information, and type of exception). Average Time to Approve an Invoice from Receipt to Payment – Knowing how long it takes an invoice to be paid can help identify bottlenecks in data entry, approval processing, and exception handling. Accelerating the processing cycle can help reduce late-payment penalties and increase the capture of discounts offered by suppliers. Electronic Invoices as a Percentage of Total Invoices – Electronic invoices take less time and are less expensive to process than paper invoices. Tracking the percentage of electronic invoices vs. paper

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ones is important, as revitalizing this part of AP will directly impact processing times and costs. Suppliers Participating in eInvoicing as a Percentage of Total Suppliers – The best eInvoice solution will not deliver ROI unless a critical mass of suppliers participates. Companies should develop a supplier recruitment and onboarding plan in conjunction with the solution implementation, and then periodically track the percentage of targeted suppliers that have migrated from paper to electronic invoicing. If the number is too low, then it is time to change activation campaigns and supplier communication methods. Today’s cloud-based solutions offer robust supplier networking tools to fit with diverse supplier groups and company needs.

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Selecting a Solution While the overall benefits of P2P software are well known, companies must select a vendor that is a good fit for their organization in order to receive the best value and results from an automation initiative. If a company is already using Microsoft Dynamics as their ERP and primary automation provider, the success of leveraging third-party providers depends on the new applications’ integration with Microsoft Dynamics. There are several vendors who have taken steps towards improving their connectivity with Microsoft Dynamics to ensure they are able to meet all their clients’ needs. Companies should be sure to evaluate the level of compatibility between the provider and their Microsoft Dynamics ERP. Apart from how well third-party systems work with Microsoft Dynamics, a thorough, critical analysis of the various functionalities and capabilities is essential—and this analysis must be carried out with the organization’s own business needs in mind. Vendors’ levels of expertise and product scope vary across the market, and companies must be aware of the areas in which a provider excels and of the products for which they should search elsewhere. Along those lines, organizations will want to find out if payables automation is a core application or a peripheral product for the vendor, as well as the growth plans and vision for the future of the vendors. Some core questions P2P automation seekers should ask: Company Overview »» How long has the vendor been in business? When did they begin offering payables automation solutions? »» How many customers does the company have and who are they? What is their experience in the organization’s own industry? »» Does the company have any upcoming mergers or acquisitions planned? »» Does this company have history or experience with MS/Dynamics? »» Is this vendor a partner or subsidiary of MS/Dynamics?

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Automation Solution Overview »» How does the solution integrate with MS/Dynamics? Can it be implemented without MS/Dynamics customization? What is the level of MS/Dynamics certification for the solution? »» What features of MS/Dynamics does the solution use and what features does it replace? »» Does it allow suppliers to receive and send attachments (e.g., PDF, CAD files) to and from MS/Dynamics? »» Does the solution provider partner with any other vendors to provide elements of their overall solution? »» What security measures are incorporated in the solution? »» How does the solution accept invoices and other transaction documents into the system? Does it provide for distributed capture? »» What invoice formats or data standards (e.g., EDIFACT, ANSI, XML) is the solution able to capture and process electronically? »» How are validation and indexing handled? Does the solution prevent unapproved invoices and other invalid transactions from entering MS/Dynamics? Does it allow suppliers to correct invalid transactions before the data is sent to MS/Dynamics? »» What workflow features are available as part of the solution? Can the workflow be implemented outside MS/Dynamics (to avoid customizations)? »» Does the solution have the flexibility to support the customer’s existing organizational structure, role hierarchies, and business rules? »» Does the solution deliver a shared supplier network or portal where suppliers can submit invoices? »» How easily can suppliers onboard? Does the solution support multiple methods for supplier connectivity (e.g., web portal, print to cloud, B2B integration)? »» How is the solution’s expense reporting process conducted? »» Does the solution include a reporting module? »» What out-of-the-box payables-related metrics/KPIs does the solution provide?

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Creating Opportunity for Success Among PayStream’s research findings, there is evidence that organizations using Microsoft Dynamics are often stuck with inefficient processes because they don’t have the resources to replace their system, see Figure 10. When asked why they are not considering an AP solution, Microsoft Dynamics users were primarily concerned with two things: the belief that current processes are working and the lack of budget to handle an automated solution. The latter reason was only a concern for 15 percent of non-Microsoft Dynamics users, reflecting that costs are a higher priority for Microsoft Dynamics users. Non-MS/DYN Users

Figure 10 Purchase-to-Pay MS/DYN users are concerned about costs “What is the reason your organization is not considering an AP solution?”

Lack of technical resources to manage an automated Lack of understanding of current available solutions No executive sponsorship We do not think there will be ROI Lack of budget

MS/DYN Users

9% 0% 1% 0% 9% 0% 12% 20% 15%

45% 39%

Current processes work Other

45% 14% 10%

Microsoft’s ERP system is largely built upon the work of resellers and partnerships, and software updates and customizations usually require the costly intervention of these resellers. As a result, companies often choose to forego improvements that could benefit their overall process. These companies may fear that the technical preparation necessary to incorporate AP automation is not worth the cost of Microsoft’s involvement.

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In addition, Microsoft Dynamics GP and NAV are primarily built for small and medium-sized companies with much smaller budgets. These companies often feel unable to afford any automated processing system at all, much less expensive customizations for their ERP or the addition of third-party offerings. With today’s diverse financial solution market, there is little reason for businesses of any size to hesitate when exploring options that could change their organization’s entire process. Cloud-based solutions are designed to integrate directly into existing ERPs without the need for developmental adjustments. Their power lies in their flexible and intuitive configuration, which allows for simple adoption and does not require expensive consulting services. What’s more, these solutions are made to be affordable, offering next-generation customization and speed at very economic prices. Microsoft’s Dynamics ERP products are just as their name suggests— dynamic. They are moving up among the leading software providers in the ERP market for a reason, but the addition of cloud-based solutions beyond the Microsoft Dynamics ERP can truly enhance a company’s interaction with the system. The combination of cloud versatility and Microsoft Dynamics innovation optimizes and globalizes organizations’ business processes. To help PayStream readers make the right choice, the following profile highlights a solution provider that shows particular efficiency with the Microsoft Dynamics’ ERP. This provider is a prime example of the innovation and collaboration possible with cloud-based financial automation software.

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ReadSoft Founded in 1991, ReadSoft is a global corporation on a mission to bring customer value by providing software solutions that simplify and automate business processes. The company has over 12,000 customers with more than 1 billion invoices processed per year in the cloud and on premises. ReadSoft features two main solutions with different deployment options for the Microsoft Dynamics ERP: their AP Automation Suite (which encompasses OCR, data capture, and workflow) and ReadSoft Reach (their cloud-based business network that provides eInvoicing, supplier onboarding, and supplier portal functionality). Both of these ReadSoft solutions are designed for direct integration with the Microsoft Dynamics ERP. In addition, ReadSoft offers financial process automation for SAP and Oracle E-Business Suite, among other ERPs. ReadSoft’s self-learning functionality brings a high level of expertise to their product development and to their diverse customer base. The integration between ReadSoft and the Dynamics ERP provides seamless AP processing, filling in procedural gaps to create full productivity and customer success. Integration capabilities cover Microsoft Dynamics AX, GP, and NAV. Website Founded Headquarters Other Locations

Customers Key Clients Target Verticals

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www.readsoft.com 1991 Helsingborg, Sweden Amsterdam, Berlin, Copenhagen, Frankfurt, Hamburg, Helsingborg, Helsinki, Johannesburg, Kuala Lumpur, London, Madrid, Oslo, Paris, Santiago, Sao Paolo, Stockholm, Sydney, Wroclaw, New Orleans, Raleigh 12,000 Lockheed Martin, Sony, Time Warner Cable B2B market segment, applicable to all verticals (users of SAP, Oracle E-Business Suite and Microsoft Dynamics ERP)

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Awards / Recognitions PayStream Advisors’ Excellence in AP award (2014); Huntington Innovation Award; Oracle User Group ISV Partner of the Year (2012); Document Management’s “Environmental Product of the Year” (2012); ERP Executive’s Best of SAP SAPPHIRE NOW - Best Green Initiative (2010); ECM Connection’s ACE Award in Compliance (2007) Solution Name AP Automation for Microsoft Dynamics, ReadSoft Reach Solution Functionality ReadSoft’s solutions are sold either as a licensed or a hosted service, depending on the modules required and customer infrastructure strategy. ReadSoft’s AP Automation for Microsoft Dynamics interfaces with the Dynamics ERP through a native integration or through the cloud, while ReadSoft Reach is available solely through the cloud. ReadSoft utilizes best practice recommendations from Microsoft— such as the use of AIF (Application Integration Framework) and eConnect built-in Microsoft integration points—for a secure, seamless connection. The on-premise solution for Dynamics has security capabilities, from the application itself to an integrated single sign-on through Microsoft’s Active Directory. This creates the ability to log individuals that have verified invoices for audit trails in the process flow. The cloud solution for Dynamics has recently achieved its SOC1/ SSAE-16 security compliance, and resides within the Microsoft Cloud (previously Microsoft Azure) infrastructure, protecting the system using Microsoft’s security compliance and data governance. It is also SSOcapable with the use of Microsoft’s Active Directory, utilizing SAML 2.0. Lastly, all transmissions between the cloud instance and Dynamics ERP systems are secured by an HTTPS secure protocol, complying with SSL and TLS encryption and authentication methods. Invoice Receipt ReadSoft’s AP Automation for Microsoft Dynamics is designed as an entry point for all invoices and invoice feeds coming into an organization, and is compatible with all image formats. Depending on the implementation parameters, clients have the flexibility to

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scan at many locations or a centralized shared services center. The solution’s capabilities are compatible with scanning, email attachments, fax servers, digital senders, and any other third-party applications. Different modules determine the routing of invoices depending on their format. Paper documents are scanned and converted into OCR-optimized invoices, then enhanced as needed for the highest level of data capture success with the least amount of human intervention. AP Automation for Microsoft Dynamics provides a validation user interface to confirm and correct extracted data, and verify-operators have the ability to key in any necessary data for use in the workflow process. In addition, there is also straight-through processing functionality for documents that meet a predefined confidence level of accuracy. The solution is designed to operate with a combination of free-form, advanced logic, and learning capabilities that enable it to identify any specific document type or supplier. It also recognizes line item data automatically, regardless of page formatting, and from any and all pages of a single or multi-page invoice. Document & Data Storage After documents are scanned and uploaded to the verification interface, the ReadSoft system flags fields using a traffic light system: green for complete, yellow for warning or soft errors, and red for hard errors. The system focuses on the yellow and red fields, allowing documents to be swiftly routed into the workflow for processing. ReadSoft’s OCR uses contextual logic and learning capabilities to identify specific criteria and associated data that is analyzed to ensure validity. ReadSoft solutions provide a storage and archive feature residing on the Microsoft Cloud Invoice images, and supporting documents can be stored with the full audit trail, comments made from the transaction, and more. The solution also offers the ability to upload additional supporting documents after the transaction has been posted. For onpremise projects, ReadSoft can store the images within the workflow configuration complete with search capability and audit trail. For document retrieval, MS Dynamics users can access the image via document handling services.

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Approval Workflow Invoices with 100 percent matches are posted in the Dynamics system immediately, with no manual interaction. Unresolved PO-based invoices are automatically sent into workflow for discrepancy handling, while non-PO-based invoices are auto-routed for coding, approval, and posting. Images of all invoices and their processing status are readily available throughout the entire process via the system itself, a web interface, or a mobile device. Additionally, the solution registers the outstanding liability in the Dynamics system (even while being routed via workflow) for full visibility into financial data at any time within the customer’s system of record. ReadSoft’s solutions for Dynamics provide an integrated workflow component for approvals and exception handling. This is established through configurable, user-friendly setup and access methods. Approval routing is structured using existing organization models, role hierarchy, and business rules. Invoice data is routed according to invoice details, PO information, or pre-determined business rules. Invoices that meet the criteria for a two-way match are automatically posted, while those containing discrepancies are flagged for additional information. Notifications are handled via email, mobile apps, website, or a workflow inbox. Escalations are easy to configure, and are usually contingent upon organizational hierarchies. Basic and complex workflows are integrated with Microsoft AX, GP, and NAV. GL accounts and financial dimensions are leveraged from Microsoft Dynamics, although all workflow functionality is developed internally within the ReadSoft solution. ReadSoft uses integration features (AIF, eConnect) to create transactions with Microsoft Dynamics ERP systems. Vendor Portal ReadSoft Reach is a cloud-based business community for buyers and vendors to interact and exchange financial information. It includes a self-service vendor portal hosted inside the customer’s solution, allowing suppliers to make inquiries regarding invoice status, view POs, update their master data profile, flip valid POs into invoices, and add notes and attachments to an existing invoice. Suppliers can also enter invoices directly via a web portal interface, send through standard integrations and formats, or send by virtual printers. The recipient receives the invoices converted to their specified format and compliant with their business rules. Complete eInvoices are routed for automated coding and approval in their ERP system without human intervention.

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© 2014 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]

The portal performs automated checking and sends incorrect invoices back to suppliers for correction. Business rules for validation are configurable to any customer-specific request. The solution displays status icons and visibility into invoice processing statuses and payment details, and vendors can receive email alerts on changes. The portal also offers fast payment and dynamic discounting capabilities. ReadSoft’s user-friendly supplier onboarding tool, included in its outof-the-box offering, allows buyers to perform and stay up-to-date on their onboarding activities and savings potential with an intuitive dashboard. Buyers can send invites and reminders to their suppliers with the solution’s ready-to-use, customizable email templates. Some customers prefer to use the tool provided to perform onboarding with internal resources, while others rely on ReadSoft’s onboarding services; many use a combination of both. Regardless of the approach, buyers can always monitor the onboarding status, potential savings, and ROI in real time. The same tool is available to be used by suppliers to onboard other trading partners. Reporting & Analytics ReadSoft’s applications provide detailed data on the handling of incoming invoices in the form of pre-formatted reports, data models, and extractors. Detailed reports offer high-level visibility into status, cash flow analysis, payment details, discount analysis, accuracy statistics, workflow processing, audit trail data, and cycle times. Vendors can create reports through the vendor portal. Audit trails with a date and time stamp are facilitated on all activities, as is SarbanesOxley compliance, and users also benefit from the security features incorporated in ReadSoft’s solutions. Implementation & Pricing Typical implementation time of ReadSoft solutions integrated with a Microsoft Dynamics system is approximately 10-15 business days. If workflow is configured as part of the solution, implementation time can vary due to the complexity of the workflow structure. Customers are assigned a Project Manager to work with them throughout the implementation process, from the kickoff workshop to the post-implementation review. The process is designed to supply mutually-defined deliverables, role responsibilities, and project timelines, and ReadSoft’s Best Practices Solution Deployment provides a predictable and measurable outcome.

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© 2014 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]

Fees are based on the number of annual transactions processed in the system, and the solutions can be purchased on a perpetual or subscription basis. ReadSoft and its partners offer a full support team for their customers during the duration of the business relationship.

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© 2014 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]

About PayStream Advisors, Inc. PayStream Advisors is a technology research and consulting firm that improves the way companies plan, evaluate, and select emerging technologies to achieve their business objectives. PayStream Advisors assists clients in sorting through the growing complexities of IT applications related to business process automation with the goal of making objective, analytical, and actionable recommendations. Wherever business process automation technology is an issue, PayStream Advisors is there to help. For more information, call (704) 523-7357 or visit us on the web at www.paystreamadvisors.com.

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© 2014 PayStream Advisors, Inc | www.paystreamadvisors.com | [email protected]