Many suppliers are willing to agree to discounts in exchange for earlier payment of their invoices.  But for scores of companies, the financial supply chain is just not equipped to take advantage of the opportunity – missing out on early pay discounts because it is too difficult to change payment terms, or the accounts payable tools simply aren’t in place to offer or accept a change in payment terms. 

Without automation and real-time process visibility, it is extremely difficult for businesses with high invoice volumes to take advantage of early payment discounts. The process can be complex, requiring alignment between purchasing, liquidity management, accounts payable and suppliers. And often accounts payable processes are highly structured and lack the flexibility to process invoices with non-standard “dynamic” payment terms.

The process is called Dynamic Discounting and allows buyers and sellers of commercial goods and services to change the payment terms for an individual invoice or group of invoices to accelerate payment based on a sliding discount scale.  The process is specifically designed to allow buyers and sellers to manage early payment discount offers easily and seamlessly.

Incorporating Dynamic Discounting into our Dolphin AP solution offers our customers a host of additional benefits. It allows buyers to convert a large number of their suppliers to slide scale payment terms and to enable their suppliers to opt for an earlier payment of approved non-discount invoices against a discount. Dynamic discounting functionality enhances supplier relationships, improves the AP department productivity, and facilitates effective cash flow management that can benefit the bottom line.  A win win for both buyer and seller.

It would be interesting to know how many companies are actively using dyanamic discounting, or are looking into it, and what their experience has been.   http://bit.ly/bb7P5c

Attended IAPP, IARP, and TAWPI Fusion conference this week in Dallas.  Over four days, 1,600 attendees attended 200 breakout sessions, heard four keynote speakers and browsed the offerings of more than 125 vendors.

One of the keynote speakers confirmed what we’ve been hearing for the last year.  There continues to be cost pressure on businesses, despite the somewhat better economic news, and “finance and AP are being asked to partner with the rest of the business to help drive efficiency and effectiveness”.

As Dolphin’s solutions optimize business process, they continue to meet the objectives of management by cutting costs, managing cash flow, and mitigating risk. Dolphin had 3 sessions at Fusion specically for organizations using SAP as their ERP system – a first for this conference which has focused on the process without regard to the ERP application. The well-attended break-outs  were on:

1. Accounts Payable: Case study on bringing an outsourced shared services ‘home’ and how the new solution optimized the process so that management gained visibiltiy as well as control. The savings were in the milliions of dollars.
2.  The importance the having procurement and accounts payable on the same team when looking at procure=to-pay automation
3.  Opportunities for optimization within the order-to-cash process including order management, cash application, and lockbox processing for those using SAP Lockbox.

Lockbox processing turned out to be one of the hot topics of discussion at both the session and the conference.  While certainly facilitating many aspects of collecting payments and applying cash easier and faster, it also includes some challenges. Not infrequently payments don’t match invoices one-for-one. The handling of this kind of exception can be time and labor intensive process and that adversely affects DSO.  Learn more here.

What’s risk?   Wikipedia defines risk as ‘the expected value of one or more results of one or more future events’. Technically, the value of those results may be positive or negative; general usage tends to focus only on potential harm that may arise from a future event, which may accrue either from incurring a cost or by failing to attain some benefit.

One of the 5 Key risks identified in 2009 by the Institue of Internal auditors Research Foundation was cost/expense reduction and containment risks. Identified in this area are the presence of weaker controls, lack of control oversight and lack of segration of duty controls.  Specifics include not having real-time visibility to information upon which decisions are made.  This is especially true when it comes to financial process such as accounts payable and accounts receivable, order management, and the supply chain. ERP solutons such as SAP  help to mitigate this risk.  Add on solutions that enhance and provide visibility into processes go even farther in removing risk factors.

We attended a presentation last week at SAPinsider Financials 2010 given by Monte Nuckols, supply chain vice president at Johnson Controls Automotive, an $18B JCI business unit. They implemented Dolphin’s accounts payable solution suite to automate, and then optimize, their two shared services centers that service the unit’s 180 plants globally.

 They process 2,500,000 invoices per year, most of which are more than 5 pages with 100 items per page. Before they automated invoice processing, it took hundreds of people just to enter the data. Nuckols said that he had little or no visibility into what was going on with the approval and payment process until the invoices were posted. Some of the results he mentioned were: 

• Lower invoice-processing costs
• Shorter process cycle time down from 10 to 7 days
• Fewer late payments
• Less time responding to inquiries
• Savings totaling millions of dollars

The invoice to pay automation project earned The Chairman’s Award, which is the highest company-wide recognition for Johnson Controls employees.

Glad we were there.

Interesting article this month in Financial Executives magazine on “Whatever Happened to the Paperless Society?”  Predicted in 1978, we clearly are not there, yet the case for going paperless offers a long list of benefits most of which will result in cost savings as well.  It’s a moving target and it is moving forward.  Chaz Miller, director of state programs for the Environmental Industry Associations in DC, wrote that it is doubtful that society will ever become paperless “…but a less-paper society is inevitable”.  Automating paper-intensive operations is a core part of business today and the benefits of improving performance and reducing costs go hand-in-hand with a company’s green initiative.

Expect the Accounts Payable process to run lean and green.  It should diagnose bottlenecks in seconds, generate minimal waste, and keep vendors and partners happy with fast inquiry response and timely payments.   Dolphin makes lean-and-green a reality with an SAP-certified combination of technology, best practices, and expertise.  Get the whitepaper.

Dolphin and Brainware Deliver SAP® Invoice Automation Solution
to Global Manufacturer

Accounts Payable Solution Allows Users to Capture, Process, View and Analyze Invoice Information

WEST CHESTER, Pa and ASHBURN, Va. (February 25, 2010) — Dolphin, a top provider of business process optimization and information lifecycle management for customers using SAP solutions, and Brainware, Inc., a leading provider of intelligent data capture and enterprise search solutions, have announced a collaboration on an accounts payable automation solution for an international manufacturing company running SAP.  The solution will automate the processing of several hundred thousand invoices per year for the customer’s European Operations.  Dolphin will provide the customer with its unique SAP-certified invoice ingestion and process tracking platform along with implementation and ongoing support services.    

The customer, who has worked with Dolphin on other solutions, partnered with Dolphin and Brainware to implement imaging, invoice processing, workflow and analytics for its shared service centers. The data capture solution from Brainware will be a critical part of the project. The customer expects data entry automation to allow them to process invoices faster and more accurately and to generate a quick return on investment by enabling its shared service centers to become more profitable.

Dolphin will seamlessly integrate Brainware Distiller with its SAP-certified Process Tracking System for Accounts Payable (PTS-AP), which resides within the SAP application. Under a multi-year agreement, the customer will leverage Brainware’s intelligent data capture solution to automatically extract and validate complex header and line-item data from invoices, which complements Dolphin’s PTS-AP and the customer’s workflow process.

“Dolphin began this partnership with Brainware because of the natural synergies between the two organizations,” said Art Smithson, Director of Imaging Applications at Dolphin. “Our respective solutions allow organizations to quickly recognize the benefits of business process automation, and in this case, invoice processing. This end-to-end solution from Dolphin and Brainware will help organizations increase profitability by reducing costs and uncovering cash that was hidden in accounts payable.”

The Order-to-Cash process is at the heart of your business.  And yet, it is often surprisingly inefficient and difficult to track.  Even the smallest error can make the process inefficient, quickly draining available capital and resources. Automating O2C processes and linking documents improves cash availability by decreasing the number of touch points at each step of the cycle.

This is the kind of thing Dolphin does best — find smart solutions to take the time and cost out of critical processes like order to cash, accounts payable and ILM for SAP customers. We’ve put together a recorded webinar that highlights opportunities to increase cash flow, reduce costs and gain control over the Order-to-Cash process.

Click here to get the webinar.  Or, download our new Order to Cash solution summary here.