Transforming AP Through Technology and Automation

Fran Hammer ± Manager, Disbursements & Travel - Global Shared Services | The Hershey Company Fran Hammer is the Manager of Disbursements & Travel at The Hershey Company. She joined Hershey 22 years ago as a Secretary in the International Division. She joined the Disbursements Department in 1999 and has been the Manager since 2006. The Department currently has 14 employees and 6 temps; with approximately 4 of those people dedicated to Travel, including the expense reimbursement process for approximately 4,500 employees in the U.S. and Canada. Since becoming the Manager, she has been involved with an SAP version upgrade, upgrade of the travel & expense report system, implementation of the Vendor Invoice Management System, and a change in their corporate card provider and travel management company after over 20 years with the same vendor.

Kathy Sharp - Executive Director of Accounts Payable at MGM Resorts International. .DWK\¶Vresponsibilities include oversight of the Accounts Payable division, a 44 employee unit responsible for vendor payments of $1.33 billion annually across the company. Kathy has been instrumental in implementing the Lean Six Sigma methodologies within the AP department resulting in savings of $2.7 million through various process improvements. Additional process improvements have resulted in generating $2.2 million in revenue by increasing the earned discount capture rate from 50% to 90%. Kathy has been with MGM Resorts since 1989, opening the The Mirage as an Inventory Control Staff Accountant. She has held has held various positions throughout her 21 years with the company. Previously, she was employed DW+DUUDK¶V&DVLQR+RWHO.DWK\KROGVDEDFKHORU¶VGHJUHHLQ%XVLQHVV 0DQDJHPHQWIURPWKH8QLYHUVLW\RI1HYDGD/DV9HJDVDQG0DVWHU¶V Degree in Business Management from the University of Phoenix. She is also Lean Certified and is currently working toward her Six Sigma Green Belt certification. She is a sustainer member of the National Charity League ± Green Valley Chapter.

Terri Dunn ± Operations Manager, Transactions at Jones Lang LaSalle Terri has been with Jones Lang LaSalle since 2007. She has more than 17 years of experience in Finance. Terri began her career at Jones Lang LaSalle as the Corporate Accounts Payable Manager and has progressed to Operations Manager during her tenure within the Client Accounting Services organization. Responsibilities include: Corporate Accounts Payable, Corporate Card Program, T&E, Property Accounts Receivable and Lease Input. The team consists of 28 full time employees. Prior to joining Jones Lang LaSalle in 2007, Terri served as AR, Billing and AP manager as well as Project Lead for a global roll out of PeopleSoft during her 10 year tenure with Heidrick & Struggles.

Jennifer Barnett - Former System Manager, Accounts Payable, Summa Health Experienced Controller and Accounting Manager with 16 years of experience in hospitality and healthcare. Hands-on manager with expertise in accounting systems development, fiscal management and financial reporting. She is currently working for Walmart in their Foundation department as a finance manager. With a degree in Paralegal studies and a BA in Business, Jennifer has worked for multiple companies handling audit procedures and payables. She holds a BA, Business Administration (Walsh University, Canton, OH).

³'RQ¶WEHDIUDLGWRWDNHDELJVWHSLIRQHLVLQGLFDWHG 6 months

(

Y = f

Business Quality Council Project Idea Status 300

278

250

9  318 Hrs in Processing Time 9 29 Days in Cycle Time

200 150

104

103

100

44

27

50 0 Total

Closed

WIP

Rejected

On Hold

Closed Projects

Open Projects (WIP)

77 80 70 60 50 40 30 20 10 0

17

27 0

Lean

Quick Hits

18 16 14 12 10 8 6 4 2 0

9

1

Lean

Six Sigma

21  

Quick Hits

Six Sigma

How a Process Transformed by Lean Looks Improves Throughput

Creates Customer WOW PRE

Cycle Time

Cycle Time

- Work time (value add)  

  - Wait time (non value add)

POST  

Ability  to  sell   more  value   added   services    

Reduces   Manual  Touch   points    

22  

Reduction in Exceptions (x3) Define

Problem Statement:

Measure

50,000 of 80,000 invoices/month are being resolved manually by A/P processors leading to delay in payment, lost of validity of the discount, and

18000

100%

16000

90%

76%

12000

vendor dissatisfaction.

by 20% by the end of November 2011.

50%

40%

37%

6000 4000

60%

49%

8000

This project aims at reducing the inflow of invoices for manual resolution

70%

68% 59%

10000

Goal Statement

80%

80%

14000

COUNT 30%

CUMM  %

20%

20%

2000

10%

0

0%

Expected Business Impact ŹReducing the number of exceptions will lead to capacity creation & productivity, by reduced instances of invoice reconciliation.

Top Issues: 80% (graphical analysis) ‡Currently addressing SW & RE Duplicate checks ‡GL coding will be resolved as a separate project post P Card implementation ‡Quantity and Price variance is being resolved by purchasing team

ŹReducing the number of exceptions will increase straight through invoice processing leading to increased discount capture.

Analyze and Improve Mail Room

Preparing Documents

Manual Duplicate Check

NO

Indexing

Remote Expense Validations (15 parameters)

Control

RE Duplicate Check

YES

YES

Shred

Processor to Investigate

SW duplicate verification step is NVA step ‡Incorrect logic ‡All valid duplicates caught in robust 15 point RE checks ‡No duplicates found

Valid Duplicate

YES Remove From WF

NO

NVA Steps 1. Incorrect logic 2. All valid duplicates will be caught in manual and RE system checks 3. No duplicates found

PO Exception Volumes 60,000

50,741

50,000 NO

SW Validation (1 parameter)

SW Duplicate Check

NO

INFINIUM Validation

Valid Duplicate

42,060 32,152

30,000

YES Processor to Investigate

50,479

40,000

35,453

27,365

30,096

Complete

25,868

20,000 10,000

YES NVA Step Remove From WF

Testing improvements suggested ‡SW Dup check eliminated ‡Testing passed successfully ‡3URGXFWLRQ³JROLYH´

0

Aug

Sept

46 % Inflow Reduction Post Go-Live (PO)

 

Oct

Nov

Dec

Jan

Feb

Mar

Thank You

benefits

Electronic Invoice Processing for  Corporate  Payables  

May 2012

Electronic Invoice Processing (EIP) EIP is an electronic workflow and paperless invoice management tool to streamline the invoice and accounts payable process throughout JLL. This solution will provide a cost effective solution with the ROI in the first 6 PRQWKVZKLOHVXSSRUWLQJWKHFRPSDQ\¶V*UHHQVWUDWHJ\ and most importantly provide system enforced controls ensuring adherence and consistency. Benefits include but are not limited to: » Reduce invoice processing time 5-7 business days » Approvals captured via workflow

» Potential cost savings by having the ability to capture early payment discounts » Eliminate the need for paper copies, cover sheets, audit sheets, storage and offsite scanning » Significantly reduce the cost of overnight packages to Corporate » Images of invoices available immediately » WIP can be queried for accruals ± currently not available

26  

EIP Savings/Costs

Savings

)7(¶V  

Headcount   Reduction  

$106,100  

Savings Imaging,   Overnight  Shipping  

$64,500  

Costs Invoice   Processing  

$0  

Costs Labor  

No Start-up Cost. No Transaction Cost

Temporary  Help   Regular  Full  Time  Staff  

Costs Training   and  Start-­up  

Net  Savings  

‡ As we grow, ISA costs per

transaction will remain the same.

Additional labor cost in Q1 of 2011: ‡ We will need to maintain our

$22,500   $26,525  

existing staff level through the quarter to facilitate the transition and training. ‡ Additionally we will require temporary help during the quarter to support this transition.

$10,000  

ISA  

2011  

$111,575  

2012  &  Beyond  

$170,600  

27  

³7R%H´3URFHVV± Corporate Accounts Payable On-site teams will scan and code invoices into ISA. ‡ Today, they are creating a voucher form, including vendor information and account coding, which acts as a coversheet to the invoices and physically routing the invoice for approval.

The invoice would then be routed electronically for approval. ‡ Users will have the ability to select approvers from a drop down indicating their approval level. ‡ The approvers shown in that drop down will be specific to that cost center in accordance to the GEM Market Alignment initiative.

Once completely approved, the voucher will post into PeopleSoft. ‡ The local offices will retain the original invoices for a defined period, maybe 30 days, and then destroy the original invoices as the imaged invoice will be our document of record. 28  

&RUSRUDWH$3³7R%H´9RXFKHU3URFHVVLQJ:RUNIORZ- 2011

Vendor  send  invoices  to  JLL   Office

Local  office  Xerox    opens,   scans  image  to  folder

Office  Finance  enters  into  PS   from  image.

If  New   Vendor

W9  requested,   vendor  data  entered,   support  provided  to   Vendor  team.

DAB  reviews/enters   vendor/notifies  user

Flagged   as   potential   duplicate

Duplicate

Voucher  Deleted

Not  Duplicate-­‐override  warning  ʹ  save   voucher

Data   Complete

Retruned  for  correction Denied  by  approver Approval   workflow   begins

29  

Voucher  Deleted

Electronic  approval  received

Posted  for   payment/run   pay  cycle

&RUSRUDWH$3³7R%H´3D\&\FOH3URFHVVLQJ:RUNIORZ- 2011

UPS

Special   Handling

Checks  Printed  and   delivered  to  Corp  AP

30  

Return  to   Requestor Include   Remittance Over  100K? Over  $25K  

Under   $25K 100K

Create   Label

Manual  2nd   Sig

Mail  Check

Electronic Invoice Processing (EIP)

Decision Points: Vendor Setup Process Approval Thresholds and Workflows Centralized vs. Decentralized invoice capture Transition Plan

31  

Electronic Invoice Processing (EIP) Timeline   Approval ± July 2010 Vendor Setup Process ± DAB - Aug 2010 Approval Thresholds and Workflows - Aug 2010 Centralized vs. Decentralized invoice capture ± Aug 2010 Training: Internal - Dec 2010 Training: External ± Feb ± March 2011 Transition Plan ± ‡ Initial entry at Corp AP ± Jan 2011 ‡ Phased to offices during ± Q1 & Q2 2011

32  

4XHVWLRQV"«

Copyright  ©  Jones  Lang  LaSalle  IP,  Inc.  2008  

About the Presenter Jennifer Barnett: Former System Manager, Accounts Payable, Summa Health

Experienced Controller and Accounting Manager with 16 years of experience in hospitality and healthcare. Hands-on manager with expertise in accounting systems development, fiscal management and financial reporting. Jennifer is currently with WalMart Foundation.

About Summa Health Summa Health System, headquartered in Akron, Ohio, is one of the largest Integrated Healthcare Delivery Systems in the state. Formed in 1989 with the merger of Akron City and St. Thomas Hospitals, this nonprofit system now encompasses a network of: Hospitals Community-based health centers A health plan (SummaCare) A multi-specialty group practice An entrepreneurial entity Research and medical education Multiple foundations Summa Health System serves more than one million patients each year in comprehensive acute, critical, emergency, outpatient and long-term/homecare settings and represents more than 2,000 licensed beds.

Supplier Portal Benefits Process improvements ‡ Assistance in root-cause analysis of payment errors ‡ Benchmarking with industry norm ‡ Reduction in ad hoc Vendor inquiries

Continuous cleansing of supplier information ‡ 24/7 availability: No worries about time zones or voice-mail tags

Suppliers to be able to update once and notify all customers ‡ No extra cost for suppliers

Improved collaboration and communication ‡ Electronic submission of information „

Reduction in time lag

‡ Customers to be able to broadcast to all suppliers ‡ Audit trail for dispute resolution

Reduction in supplier risk ‡ Regulatory compliance

Supplier Dashboard ± Major Healthcare Provider

Supplier Dashboard - Spend

Real-Time Supplier Updates Parent

Subsidiary

MTI-MEDICAL TECHNOLOGY INDUSTRIES, 3655 W NINIGRET ST, SALT LAKE CITY, UT 84104-6511 (#R02766527) MEDICAL TECHNOLOGY INDUSTRIES, , 00000 (#100371981) NAVILYST MEDICAL FORMERLY BOSTON SCIENTIFIC CORP, 10 GLENS FALLS TECHNICAL PK, GLENS FALLS, NY 12801-3864 (#100006437) BOSTON SCIENTIFIC CORP, PO BOX 512638, LOS ANGELES, CA 90051-0638 (#R02567727) Boston Scientific Corp, PO BOX 512638, LOS ANGELES, CA 900510638 (#R01126129) BOSTON SCIENTIFIC CORPORATION, ONE BOSTON SCIENTIFIC PLACE, NATICK, MA 01760-1537 (#100069219) BOSTON SCIENTIFIC, NEUROMODULATION CORP, PO BOX 54598, LOS ANGELES, CA 90054-0598 (#R07967530) BOSTON SCIENTIFIC, ONE BOSTON SCIENTIFIC PLACE, MAILSTOP A2, NATICK, MA 1760 (#100078627) NAVILYST MEDICAL INC, 10 GLENS FALLS TECHNICAL PK, GLENS FALLS, NY 12801-3864 (#100006437) NAMIC VA INC, CHURCH STREET STATION, PO BOX 6793, NEW YORK, NY 10249-6793 (#R00322626) NAVISYST-FKA-BOSTON SCIENTIFIC CORPORATION, NAMIC TECHNOLOGY CENTER, CHURCH STREET STATION, PO BOX 6793, NEW YORK, NY 10249-6793 (#R03632926) BOSTON SCIENTIFIC CORP, PO BOX 512638, LOS ANGELES, CA 90051-0638 (#R08074829) BOSTON SCIENTIFIC CORPORATION, NAMIC TECHNOLOGY CENTER, PO BOX 6793, PO BOX 6793, NEW YORK, NY 102496793 (#R06119227) GUIDANT SALES CORP/BOSTON SCIENTIFIC CORP, 1 BOSTON SCIENTIFIC WAY, NATICA, MA 01760 (#R00389331) GUIDANT SALES CORP, 75 REMITTANCE DR, STE 6094, CHICAGO, IL 60675-6094 (#R00389332) NAVILYST MEDICAL, FOMERLY BOS SCI NAMIC, PRUYNS ISLAND, GLENNS FALLS, NY 12801 (#000006058)

Statement Reconciliation Process

Recovery Weekly Claims Presented Page

Additional Lavante Sponsored Sessions

Date: Thursday, May 17, 9:15 - 10:15am Supplier Portals 101: What You Need to Implement Effective Supplier Information Management Systems, Moderated by Aloke Bhandia

©  2012  Lavante,  Inc.  and  Mary   S.  Schaeffer