A closer look at U.S. Bank AP Optimizer

Hi. Welcome. Thank you for joining us today. Today we'll be diving into AP Optimizer, U.S. Bank's AP automation platform.

I'm Bryan Schneider. I'm Working Capital Consultant here at U.S. Bank. And with me, I have Darin Armbrecht who is a solutions engineer. I'm excited to have Darin here.

This is the third in a series of three webcasts focused on AP automation. And Darin brings a great deal of expertise, both having sat on the corporate side and also obviously here on the banking side. So a tremendous background on ERP integration, procure-to-pay, really that end-to-end lifecycle. And Darin's actually going to be a pivotal component here today to take us through the demo.

So a lot of the feedback that we've gotten from the previous two webcasts where we really covered some of the classic challenges as well as best practices was, hey, we'd love to see the platform. We'd love to see a demo. And so that's what we're going to focus on here today. So without spending too much more time on really more of an intro, I do want to help frame the conversation today.

Darin, I know you and I have talked about this a bit. But for those that are new here with us today, I just want to, again, set the stage. So if we think about what AP Optimizer is, it's again an end-to-end invoice-to-pay solution. So the platform integrates really seamlessly, easy integration back to the ERP both for invoice and the payment. And it really supports the entire flow of an invoice coming in to the organization all the way through receipt capture, geocoding, routing and approval, all those classic components in an invoice process.

The next part are the payments. And we dove into the powerful component of our network of over 450,000 vendors and how they're already receiving digital forms of payment and our ability to really help our clients optimize those flows. So we can take in one file and process cards, wires, ACH, premium ACH, a host of different payment types. So that's, again, really the framework just again setting the stage for what AP Optimizer is.

And with that being said, Darin, I want to get you here engaged because I want to understand-- I know everybody here, it's helpful just to understand, what are you going to show us today? What are the different components? What can we expect here over the next 20 or so minutes?

Certainly, Bryan. Well, there's a lot of content here to capture within 25 minutes. But I'm going to walk through four agenda items or categories of the system. And so I'm going to start off by obviously demonstrating quickly the interface and how easy and flexible it is to use, but then also as part of that the invoice capture process. I'm then going to roll into the workflow around POS and non-POS.

From there, we'll discuss a little further invoice approval as well as governance. Before we roll into the other module of the AP Optimizer, you have the invoice. But that's the payments module as well. So we'll quickly demonstrate our dashboard on that front, the payments approval process to you-- a glimpse.

Again, there's a lot of content within 25 minutes, but we're going to roll it through quick as a teaser. Again, we invite you to reach out to us any time after this should you have further questions along with see a demonstration of our system. But, Bryan, before I get started, are there any questions or comments that you have for me?

No. I'd say let's dive in. Don't feel like you've got to give the history of the world in a short period of time. Let's really make sure we just focus in on the high level and encourage folks here on the call today to schedule some time to really do a much more customized demo specific to their process. So, yeah, let's dive right in.

I'll do that. I have a passion around automation and streamlining processes, especially AP. So I certainly have the ability to get really in the weeds, but I'm going to do my best not to do so.

So let's go ahead and get started. I'm going to go ahead and log in and show you the landing page for the main screen of our invoice module. As you can see here, this is a clean and easy-to-use interface. This system is extremely flexible and configurable.

What you have in the top part of the screen are obviously a number of menu items that show the capabilities of AP Optimizer around invoices, but then payments, vendors, et cetera. But then the current invoice buckets here, you see a number of buckets around needs separation, correction, awaiting coding, approval assignments, match exception, for approval, and those invoices that have been rejected. In an invoice system, you typically have two steps. That's around capture, one, where we're receiving invoices that come in via email, mail, fax, or potentially even EDI.

As those invoices come in, they need to be digitized. One of those has already been digitized in the EDI. And then they need to be processed or go through a workflow, and which includes approval.

So as we are going through or capturing these invoices, we're leveraging multiple technologies around machine learning and AI. The ultimate goal of invoice automation is straight-through processing, but that's almost impossible to achieve. So what we have here are a number of these categories of buckets, queues, however you want to call them, where invoices are dropped in. And we provide you the tools to get those invoices through that process quickly and efficiently and even learning over time.

The bottom half of this screen that we're looking at is a customizable view for an AP team member to determine what they want to see every day logging in, the invoices that need to be worked, et cetera. So again, customizable, a lot of flexibility around this interface. So that captures at a high level a little bit of the user interface. We'll obviously see more here in a few minutes as well as the capture experience. Any questions or comments, Bryan, for me before I continue?

I think just a comment that it is helpful. Thank you for helping us orient to this dashboard. And it sounds like it's customizable, really customizable based on your role.

So if you're focused in the weeds versus maybe being a little bit more high level, and you want to really have a more administrative view, the platform offers that flexibility. Yeah, no. So let's just continue on with the invoice capture piece.

That sounds great, Bryan. Yeah. So I'm going to show a couple of the invoices that dropped in a few of the buckets that I mentioned, needs correction and needs separation specifically. So I'm going to go ahead and start off with an open invoice that was in the needs correction section.

I'm going to open up that invoice. And it's going to give me a screen where I see the actual invoice to the right, an image of that. And then I see to the left the fields that we're trying to capture or pull off of that invoice.

So here in this example, I'm going to select a field, in this case invoice number. And when I highlight that field, I can click the image to the right and where that data resides. And that will automatically make the mapping between what's on the image to the field within the system. As I go through this step or these steps for all these additional fields, the system is learning how to capture this invoice, particularly handy devices, for-- the next time it comes in, it's going to automatically capture the data and map the fields appropriately. So this is an example of a needs correction invoice where again we're mapping the fields or the data off of the invoice, pulling that, and mapping it to fields within our system so that it could be continued to work.

The other bucket or example that I want to demonstrate quickly is a page separation queue bucket. And that is where we receive invoices with multiple pages. It'd be nice if invoices came in in one standard format from every vendor, but that's not the case. We have invoices come in with multiple pages, sometimes marketing slicks, et cetera.

So in that scenario, I'm going to go ahead and open up an invoice. And I'm going to separate the multiple pages that we have here. So as you can see-- and this is a utility invoice-- I've got multiple pages.

We want to identify, what is the main invoice page as well as what is potentially a trailing page or something that can even be deleted? As you can see here on my screen, we have the ability to view it further, mark some trailing pages, or even delete the pages if they're not important. We also have the ability to make something a supporting document. And then, when we've separated the pages, we can go ahead and continue. And that will drop that invoice quickly out of that needs separation bucket.

So while, again, our goal is straight-through processing and invoices, but we have all these buckets, our goal is to get them through these buckets or these queues and through the workflow as quick as possible. So what I just demonstrated I could probably accomplish in 15 or 30 seconds. So, Bryan, now that's an example of needs separation and as well as needs correction invoices. Any questions for me or additional comments before I continue?

Well, that's very helpful just to understand some of the classic scenarios. I know there's other potential exceptions. Again, it sounds like one of the powerful components or differentiator is how we capture that information off of, let's say, a PDF through the line item capture. Not all platforms out there have that.

Of course OCR's been around a long time, optical character recognition. But the ability to really pull that more exact data off of behind the PDF, it does help with the straight-through processing. And as you pointed out, the customization around roles is-- we've heard a lot of feedback from other demos I know I've been on that that's very helpful for most companies that we've spoken to. So maybe we transition a little bit into another classic component in an AP process, which are, how does the system work for, let's say, a non-PO-driven invoice versus a PO-driven invoice?

Absolutely, Bryan. Yeah, while demonstrating non-PO and a PO environment, in a PO environment we're going to support two-way and three-way matching as well. But let's go ahead and get started on a non-PO invoice that comes in.

So I'm going to go ahead and click, again, the buckets that I mentioned at the start of this webcast. We've got a bucket called awaiting coding. That's a non-PO invoice.

I'm going to go ahead and review that invoice. It's going to bring open the screen. Then again it shows me the invoices on the right, and on the left, the fields that need to be populated.

Again, our goal is straight-through processing. However, that's not something we can accomplish or achieve on every invoice. There's always going to be exceptions. We give you different tools to set up the system configure to help things move through the process of workflow quicker. For an example, those with the workflow automation profiles, which again can be set up and move invoices quicker through an invoice, like for example automatic cost allocation per a vendor, a specific vendor.

We also have, as you see on the screen, approval assignments. And we've got approval paths. They could be sequential. They could be in parallel.

We have a lot of flexibility around configuring the system on that front. Or you can assign just an individual approval. So that's another tool that we have to pre-configure the system to allow invoices to move through the process quicker with less touches.

We have the ability to allocate line items by percentage and amount, as you can see here. So what I'm going to do is quickly allocate and assign the coding to this particular invoice. We're going to load the capture up to 10 dimensions from your ERP system. We're going to work closely with that ERP system to capture what the geocoding strings are. We're going to load that.

As you see here, I'm going to capture and quickly capture the coding for this particular invoice and line item. I'm then going to assign a percentage to it, the sales tax group. And then I can even add an additional line item here and assign a certain percentage of it to it as well. So that quickly summarizes a non-PO invoice.

But an additional feature I want to demonstrate off to the right is our audit and tracking capability of every invoice where you can see the workflow of the invoice, when it's been received, when it approved to that process and moved on. We also have the ability to have a vendor discussion. So if we have some questions regarding this invoice, we can initiate a conversation. And that dialog is going to be captured by the system. We then can do the same internally and have comments back and forth between ourselves and maybe the buyer.

We have the ability to add supporting documents to this invoice and the workflow. And then ultimately, we are auditing or tracking the entire history of this invoice through received, coded, approved, and rejected. So that's a quick glimpse into additional capability of an invoice management process as it relates to non-PO. Before I jump into the PO, any additional comments or thoughts, Bryan?

Yeah. I guess to summarize, so essentially we provided the technical tools to really automate what have been manual processes, right? So once an end user flags, if you will, an invoice and has coded it appropriately, the system then recognizes it moving forward again pointing more towards true straight-through automation. And the other piece that I heard were related to tolerances that, again, within the system, the end user can dictate what are the tolerances within given areas so that the system will either choose to continue to hold it or let it pass through to the next stage of the process. Is that fair to say?

Yeah, absolutely. And with respect to tolerances, you're probably focused there talking mostly about POS. And our system fully captures the PO process. We can capture POS out of your system as well.

POS also give you the best opportunity for that straight-through processing. But as we all know, that's not an ideal world, and there's always going to be exceptions. So let's walk through some examples of how a PO does not move through full approval in that straight-through processing and actually has some exceptions. So I'll give you a couple quick examples here.

I'm going to go ahead and open up one invoice here. And in this invoice that you're seeing up on the screen, you're going to see that the three-way policy of a purchase order and receiving those goods has not been met. So as a result, we are making note of that so that you can continue to work or wait for this to be received in the system if you are strictly enforcing your three-way policy.

I'm going to show another example here, is I'm going to open up another invoice. And when I open up this invoice, you're going to see that there's an exception on a line item here. So because this is a PO invoice, we've got all the data mapped from the invoice to the right. But we see that it's got some warnings on line items. In this specific example here, the invoice unit price exceeded the PO unit price and is above the specified tolerance of 10%.

So we're flagging this so that it can be further reviewed. So I am going to then go ahead and just send a review request of this. I'm going to select who I want to review. I'm going to send that request, put in a reviewer, the review reasons, and the comment as to why this needs some further attention on the invoice.

So once I send that request, it will then send that notification to the reviewer. And we'll have some internal dialogue as to why again or how we can proceed with this PO invoice that had an exception that was outside of tolerance, et cetera. So that gives you an example of how PO invoices are handled in the system. But any questions or comments before again I continue?

No. I'm thinking perhaps we transition into the routing and approval, which is often a great stage in the process, meaning it's about to get back to getting through the system and out the doors for payment.

Yeah, thank you, Bryan. So I mentioned there's really two steps to invoice management. One, there's that capture part which we talked about early, and then there's the workflow. We just talked about PO and non-PO. But then, obviously, the invoice routing approval and even governance is an important part of the invoice management. So I'm going to go ahead and demonstrate quickly an approval process.

I see I have that bucket of approval assignments. I see I got one invoice here. I'm going to select that invoice. That's going to open up my invoicing screen where I see the invoice, the field. I'm going to select the actual approval path.

Again, I've got the ability to set up and define groups of team members as part of an approval path. I have a lot of flexibility around whether there's sequential or parallel approvals. Or I could just select an individual approval. And I go ahead and select that individual or the approval path, hit continue, and that will move it out of the approval assignment.

On the back end and while I do that, an approval email is sent to the approver or approvers. They have the ability to accept or reject or even comment on that invoice from an email so that we can continue moving forward with the invoice in the process. So that's an example of an invoice approval.

I'm going to talk quickly about the approval governance. Again, from an administrative perspective or based on some particular users and their set of permissions within the system, they can have a view of all the invoices, who or where those invoices sit or reside with, particular users or groups of users, how many invoices they have, how many days they're outstanding, et cetera. And through this functionality that I'm showing and demonstrating on the screen, I have the ability to nudge the approvers.

I can remind them. I can send them an email quickly and put that back in front of them. I also have the ability to reassign approvers should somebody left the company or is out on vacation, and I need to get an invoice processed quickly. So that gives you a quick glimpse of the approval routing and governance capability of the system, Bryan.

One other component we have is invoice scoring. Fraud mitigation is a huge part of AP Optimizer. As you can see here on my screen, we also score invoices. The lower the score, the better. The higher the score, not so much.

In this case, we're now seeing an invoice with a score of 700. More specifically, we're seeing that this is a new vendor within the system. So that's a flag in the system. We're configurable as well within our system.

In addition, we see that this invoice is over our $10,000 threshold. So that bumps the score up on the invoice scoring. So that just gives us the proper attention to an invoice. So that wraps up approval governance and invoice scoring, Bryan. Any questions, comments for me?

Having sat in a lot of the demos, Darin, some of the feedback that we've had is really that simple ability to approve an invoice within an email, as simple as that sounds, really makes a lot of people happy. The feedback has been, oh, I don't have to go log into another system in order to approve. So a powerful functionality.

Clearly, the platform's been around 15 to 20 years. A lot of thought's going into a lot of evolutions in this platform to really make it much more user friendly and reduce time in what has been, frankly, a very paper manual process throughout history. So with all this automation, these are great steps.

And to your point, the fraud piece is another powerful component. Certainly on the payment side, there's a lot of work that we do to ensure that we eliminate or mitigate fraud, I should say. And so obviously, we've talked about that in some of the previous webcasts. So thank you for touching on that. Maybe touch on quickly-- I know we're limited on time-- the payments dashboard and what that approval process might look like.

Yeah, this is a great feature of the system. So we're moving on to the payments and the payments dashboard here. I'll go ahead and log in and just give you a glimpse of some of the capabilities of the dashboard or the widgets that we have. So here, I'm demonstrating a number of payments and those payments awaiting certain action.

We've got full approval process from a file level as well as an individual payments perspective. We're going to leverage multifactor authentication for additional pools that are done through the system. Obviously, approvals on payments can be done through your ERP as well. But we've got this additional capability here to approve a payment and have some of the security features that we leverage to secure those payments.

In addition, you'll see a number of other widgets around the number of payments, approving them, the status of payments are awaiting processing, in process, processed successfully. And perhaps there are some exceptions that we need to work. In addition, we've got a robust reporting capability. We've got some widgets that show charts and what types of payment types are being made and where those payments or how they're being made. But ultimately, we're going to wrap up and show some of the robust reporting capabilities around the payment and remittance, bank account reconciliation, even some of the dividends that we pay out on a few of the payment types.

But that's quickly, Bryan. I know we're limited on time, but that's our payments dashboard. Again, reach out to us if you have any questions or comments or need a further more detailed demonstration of what I was able to do here.

Thank you, Darin. And I know it was a challenge to even touch the surface of such a complex, sophisticated, and powerful platform. But the good news is, from everything that I've seen, it's really a platform that's intuitive. It's easy to use. And it's got all the capabilities built in to really ensure security along the way as well, so the admin, the audit functions, and just the information that's moving through the system.

So with that being said, I'd like to say thank you to those that joined us here today. And I'd also like to leave you with a couple of thoughts. So number one, we're going to be reaching out proactively to talk to you about your specific AP processes, where this particular application might be the right fit, but also to think about things like where are the bottlenecks within your own organization, identifying those. And then secondly, looking at, what's the cost to move an invoice through your business? Because one of the things that we can also help with is really to sit down and, let's say, look at a 12-month spend file and come back to you with, really, a spend analysis and an ROI analysis that helps calculate, what's really the return on investment for deploying or leveraging a solution like AP Optimizer?

The other component is-- and just to leave you with this because we do have, I would say, half of our clients making decisions around going forward with AP Optimizer related to fraud-- be super mindful. With the pandemic and the things, unfortunately the fraudsters are more active than ever. This platform helps on all fronts, be it on the invoice side or on the payment side. So just be mindful of that.

Reach out sooner rather than later. Unfortunately, we've had some clients reach out that were holding off a bit in their process and had a fraud event happen. So definitely reach out sooner rather than later.

And then speaking of fraud, we hope you'll join us next month to join us on the webcast for related specifically to fraud. So again, thank you so much. And we'll see you next month.