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Digitize your AP processes to optimize results
Thank you for joining us today. For those of you who've been cooped up in their homes for a long time because of the pandemic like us, we're going to give you something else to think about in terms of payables automation. So in today's session, we're going to cover our product that we call AP Optimizer. What AP Optimizer does is it automates your payables process from invoice through payment and reconciliation.
We're going to get into the details. But basically, it eliminates paper. It digitizes the experience from capturing that paper invoice to the approval workflow, the payment, the reconciliation back into your ERP. And we're going to walk you through the details and the components of what makes that best in class. But before we do, Brian, what sorts of things during this crazy year have you seen in terms of industry trends?
Well, one of the first things that jumps out at me-- it's not only from the conversations that we've been having with our clients. It's also from a number of the different analyst reports that we've been covering over the past year. So first and foremost, it relates to productivity and efficiency. Strategic Treasurer in a recent poll had identified 60% of those that they'd reached out to identified productivity and efficiency as the number one challenge, with a second being cost. And I think those around 18%. So 80% of priorities over the past year have focused around productivity, efficiency, and cost.
If I had to throw a couple of others in there, just because they do tend to come up on most of our client conversations, fraud would be at the top of the list. And I would also say just optimization. So there's the bigger macro trends. And then there's the need to fine tune that more.
So I think the fraud piece, and then also you touched on it as well. It's the systems integration component that's often a challenge and creates some stress and anxiety for the folks that we've been talking to.
And I would say fraud-- I saw another article today about how it's moving up on the list in terms of highest priorities. And we see, particularly in the government sector, a big rise in email compromise. And certainly when we're talking to clients about AP optimizer and automating their payables process, fraud is very much on their minds. What sorts of things do you think this new solution provides in terms of benefits? And what are some of the challenges that customers have in implementing it?
So in terms of the challenges that we see most often, the integration component is where our clients and the folks that we've been talking to have seen most of the frustrations. The great news now is, with technology, with listening to the clients and identifying ways to shorten the cycle time, if you will, so that our clients don't have to spend added hours and working through that integration-- so we provide much more of a white, if you will, cloud service, where we've done a lot of heavy lifting so that, for our clients, when we go to integrate, regardless of the payment type, we're looking at a much shorter, much more compressed integration timeline.
And a lot of that's built on the fact that we've done so many integrations with the different ERP platforms that we're able to leverage what are called connectors, APIs. And even if it is a file-based integration, we're able to really drive the time and the resources needed on that front. So for us, there's the challenge. And then in terms of our ability to deliver on value add for our clients, it truly does get back to more of that turnkey integration that we're able to bring to the table.
I know particularly because I focus a lot on the card side, rebate and revenue sharing is always a big topic of conversation. What do you think the reaction is from clients when you talk to them about, hey, your cost center today-- because of some of the rebate programs associated with this new solution, you could actually be turned into a profit center?
Yeah. Great point. So within our platform, not only are we supporting really all the core payment types. With respect to rebate, we're able to help drive a much more significant return for our clients. So when you look at, let's say, a business that's had 80% plus in checks, an organization like that is going to see a huge shift in terms of their cost, so to your point of cost center more towards a profit center.
If we're able to move a significant number of those clients across to a digital payment method-- ideally the virtual card being number one. We also offer differentiator in terms of what we call a premium ACH, so the ability to send an ACH. But a vendor is willing to pay a premium so that we're sending the file in the format that they're wanting. And we'll also do a direct transmission. So we're also helping to compress their cycle time in recognition of that payment.
So those first two categories-- they eliminate transaction costs completely. So if you were at a $5 per check today and you're able to move that to zero, when you're talking tens of thousands of transactions, that costing alone is significant. And then you set on top of it the rebate. So the combination there is huge.
And we'll talk more about the network here in a minute because that's another key component of a differentiator for us, of being able to show day one lift and not just finger in the wind promise. We're able to really look into the network, look at the current interaction for our client and, at the end of the day, deliver on what we see as fairly conservative estimates.
And so you touched on some of the things that make the solution best in class. And before we jump into that, I think, when we talk to clients about automating their payables process, there's a lot of concern around resources and how is the implementation going to work, and how much of my people's time is going to be required? And what we've learned out of the gate is that the ERP integration tends to be the most concerning or the longest pole in the tent.
What we've done in response to that-- as you know because you work with these folks a lot-- is we've added some solutions engineers to the mix. And their primary role is really to work with the clients, scope out the technology needs, help the client navigate that part of the implementation. So that said, what are some of the key differentiators that really stand out in the crowd in terms of our AP Optimizers solution?
So this is a fun conversation. It's exciting in terms of our ability to, number one, mitigate fraud. And that happens at multiple levels. So our clients are able to sleep better at night, have a lot less stress around a fraudulent payment going out the door.
So we're doing a number of things, one of which is to do an ongoing validation of the vendor. So not only do we provide a white glove service to onboard the vendor. But any time there's an update, we're going to validate that that information is accurate and that that vendor's account is, in fact, their account. Behind the scenes, we're also doing IP address matches, Sim card matches. There's a number of other technologies, including multi-factor authentication, that we're deploying to help ensure there's no fraud across our network as we facilitate payments.
In fact, over the past couple of years, we've made over half a trillion dollars in payment with zero fraud on the network. And that that stands--
--above the rest of it by quite a bit. So fraud's a biggie. The network's another huge differentiator. So if you look at our network, we have over 450,000 vendors already on the network. Well, that's great. That's a big number.
The other important part that our clients are most interested in is, OK, great. But how does that really matter to vendor vase? And that's where we sit down with clients-- you actually touched on this earlier. We'll sit down with clients. We'll take in a vendor history file or spend file. And we'll be able to look at existing interaction. What vendors are already in the network? And we see somewhere on the order of around 30% to 50% of vendors already being within the network.
So what does that mean? It's a lot faster conversion from paper to electronic. We know that those vendors are already accepting electronic forms of payment. We also have that additional insight into, hey, are they accepting card? Are they accepting premium ACH? What's the likelihood we're going to be able to help drive conversion toward, let's say, a zero transaction cost payment rail that's also going to drive rebate? So that's the payment side.
One other piece that I like to talk about on the payment side relates to some of the roadmap components that we have for later this year. So we'll be looking to add more about business to consumer payment because we also have clients across many different verticals and spectrums, and there could be rebates that are going out to consumers. Maybe it's a patient refund. A lot of different examples of how businesses are also making payments to consumers. So we really want to make that a one stop shop, one point of contact, one file that our clients can hand off to us from the ERP. So fraud, network, and the different payment rails are huge differentiators for us in the marketplace.
Yeah. So let's touch on your favorite subject now, invoice. I don't think anybody gets more passionate about optical character recognition and artificial intelligence. How about if you spend a few minutes just touching on why our invoice solution is so different and what that means for our customers?
Sure. So first of all, as you pointed out at the beginning, we offer a true end to end solution-- invoice to pay. So what does that mean? With respect to invoice, that's the ability to receive the invoice in however that might be. In many instances more and more companies are receiving that via a PDF or email, for example. They may be still getting in some paper invoices, which can be scanned into the platform.
So beyond the receiving, and perhaps even an EDI transmission, the next piece is the capture of that information, junk in, junk out. If we don't capture that information accurately, then we've created another instance where we've got another exception. And at the end of the day, we're really trying to drive towards 100% straight through processing. So we do have unique capabilities. And we are leveraging machine learning, AI, robotic process automation, a number of different technologies, including another-- I'll throw another piece of jargon out-- what we call line item capture. And so that's actually pulling the information not just from the image, which can be inaccurate, but also to pull the information from behind the image because there is data that often travels with the PDF. So those are areas certainty of differentiation.
And then all the other classic components we wrap around. So beyond receiving and capturing, we handle the GL coding. Automating that for that non-PO process is a critical component to really get away from another manual step or manual keying. And then also touch on the routing and approval. So all the classic hierarchical-- get this invoice out to the right folks. There's tolerances within the system that our clients can set to really help streamline and align the platform with how they want to operate.
And then the last piece that I'll touch is another-- it actually touches on the fraud side. And that's with a scoring that we're able to do. And our clients are able to actually see, well, is this potentially a fraudulent invoice? So that's just another level of going above and beyond within our platform and another area of differentiation to help our clients be safe, secure, and be able to make their payments with a lot less stress.
Yeah. And I think it's important people understand in terms of scoring the invoice and the supplier, we flag things like, the supplier's never been paid before, or this is the first time of payment's being made. This invoice-- the amount is very out of pattern. Things that are really meaningful when someone has to approve an invoice and they have to make a decision on whether or not the invoice is legitimate.
I think the other thing that's really resonating with our clients, particularly when they're dealing with their suppliers is that there's very often an interaction between buyer and supplier about where-- what's the status of my invoice? Has it been approved? Is it waiting for payment now? Is the payment been approved?
And AP optimizer provides visibility to both buyer and supplier in terms of, whether it's a real-time email alert or their ability to go in and actually see the status of an invoice or payment, it eliminates a lot of that back and forth and friction between buyer and supplier. So I find when we started talking to clients about this in the beginning, what clients were often responding with was, wow, this sounds like a lot of great automation and a lot of great functionality. But it sounds expensive. Can you touch on what sort of our ROI can clients anticipate when they take on a solution like this?
Sure. It's going to depend, of course, a bit on the spend volume that they're putting through the pipe, so not only in dollar volume but also in transaction items. So I would say, in general, it's going to help clients move from that true cost center. You're typically going to see somewhere on the order of a hard dollar-- we call it a net benefit of, let's say, in the hundreds of thousands of dollars, or even potentially to the millions of dollars. Again, it really depends on the spend amounts.
And in getting back to OK, why is that the case? Well, when we're able to help drive a significant amount of the spend and transaction count towards these rebate-- payment towards rebate-driven payment rails, we're not only eliminating transaction costs, but we're now driving rebate. So we're truly able to help our clients shift away from a cost center towards a profit center and see higher dollar returns.
One of the things we don't talk about as much but it's equally beneficial-- and we do hear this from our clients. And that's the soft dollar benefit. So it's the freeing up of the resources, the fact that these folks don't-- they'll no longer have to manual key multiple FTEs decked against manually keying in information, dealing with exceptions, dealing with distractions during the day when a vendor calls in and just says, hey, where's my payment?
Now, with, to your point, the vendor portal, the ability to do a lot more of self-service, the fact that we can-- we actually stand in the middle and help facilitate even rejection returns. We take that on. So our clients are not distracted during the day. It allows them to focus on a lot more core strategic initiative and really helping to get back towards more effective forecasting, getting that information back into their system more quickly, and just an overall much, much better experience.
And I think that's reflected. The very first client that we implemented was generous enough to give us a quote for our press release. And what they really focused on was-- one of the key benefits they saw was that U.S. Bank did a lot of the heavy lifting. And I think that really, when you looked at everything that we deliver in terms of the pieces of the puzzle that get automated, it provides for a very compelling value proposition.
And I laugh when clients-- we present the ROI and they say, well, this sounds too good to be true, or we talk about it at a high level. I think what clients really need to take away is that, if they give us a file with just a few key data elements-- their suppliers name, what their address is-- we can legitimately do an analysis and show them what the ROI could potentially be for them.
So we've covered a lot of ground today. What would be the three things that you would want people to take away from this session?
So number one, we provide a truly flexible platform. It's truly a one stop shop. So we'll handle soup to nuts, from the ERP integration all the way through supporting the different payment types. If our clients want to just, let's say, leverage the payment component because they really enjoy and have a great process for how they're moving an invoice through the organization, no problem. We can just work with them on the payment side. If they do need that true end-to-end invoice to pay, we're able to support that as well. So that's the first one.
Second, the fraud mitigation piece is significant. I'd say over half of our clients that we speak with are making their decisions on our platform based on the robust fraud mitigation capabilities. So that's helped me learn a lot. So we could see what the reports are saying-- the analyst report. But a number of our clients have said, this is critical. This is important.
The last is our unique network, so the fact that we can, to your point and what we've talked about is-- we can take in a file-- and I encourage any of you out there that haven't done this yet. Throw a file over the fence to us. Let us analyze that for you. And let us come back to you with real numbers to show what the hard dollar benefit can be to your organization. And then also, subsequently, I would say, take us up on an opportunity to take you through a demo of the platform.
Yeah. Great point.
Having your operational folks join us, walking you through what that experience looks like, and addressing a lot of those core question. So those are key differentiators and areas that I definitely want folks on the call to walk away with today.
That's great. It's very exciting.
So take us home. Wrap us up.
Yeah. Yeah. We've covered a lot of ground, and we should probably wrap things up. So thank you all for joining us today. We're going to have a webcast coming up in a month. It's going to be focused on SinglePoint-- April 15. And we'll be talking about some of the innovations around our SinglePoint platform. So again, thank you.
Learn how digitizing AP can drive efficiencies and productivity, and mitigate fraud risk, as we break down the key components and consideration for choosing a best-in-class AP automation platform.