Improving your net cash cycleAutomation from purchase request to customer payment

Mark MacLeod, Computershare

Computershare

Business process outsourcingMulti‐channel communications

2

Operational statisticsCountries 17

Group Revenue US$1.6 billion

Group IT R&D investment $US66 million

Outbound documents 520 million

Inbound documents 120 million

Documents archived 440 million

Australia Revenue (AU$)

33% Registry maintenance

$128m

17% Corporate actions

$65m

12% IT & other

$46m

38% Communication services

$144m

Our solution

Software‐as‐a‐service (cloud) – exceptions management, content management

Your organisation

Order‐to‐cash Procure‐to‐pay

Your customers

Your suppliers

3

Invoice generation

and delivery

Supply chain messaging

Remittance processing

Invoice Processing

Our partners

4

Banking Solution

Net cash cycle

5

CaseWorking capital management•Reduce days in Net Cash Cycle without negatively affecting business activities•Days sales outstanding•Supply chain messaging•Payments and allocations

Computershare

Sales revenue $1,600m

Cost capital 12%

Opportunity cost per DSO $526,000

Mid‐tier client

Sales revenue $250m

Cost capital 15%

Opportunity cost per DSO $102,000

Cost efficiencies

CaseCosts•Labour costs•FTE payroll and on‐costs•Infrastructure costs•Hard costs

Efficiencies•Eliminate paper•Process automation•Cap‐ex to Op‐ex

Volume (invoices processed) 1,000,000

Number of FTEs 50

Labour costs

Cost per employee $35,000

On costs at 20% $7,000

Infrastructure costs $7,000

Total labour cost $2,450,000

Hard costs

Rental ‐ scanners $6,300

OCR Software and infrastructure $52,000

Floor space ‐ $425/m2 $15,300

Physical storage, secure shredding $17,200

Total hard costs $90,800

Total costs $2,540,800

Current cost per invoice $2.54

Outsource fee per invoice $1.00

Remaining FTEs (20%) $0.49

Saving $1.05

Total $1,050,800

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Accounts receivable Case: B2B client

2005 2009

21

821

71

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Accounts receivableSame day allocation and value through our banking partners

3 way matching and validation

Remittance invoice line item

1

Cheque MICR line + valueEFT, CC, BPAY data

2

Debtor Ledger Open Items

3

Email/Fax Remittance

Phone/Counter

National locked box

EFT/CC/BPAY

Journal fileAllocated payments

Exception processing portal

8

Accounts payableCase B2B clients

Most clients have some degree of automation...

Efficient

› Paper AP processing (25%) ‐ $0.79 (labour only)

› EDI AP processing (75%) ‐ $0.33 (labour, exceptions only)

In‐efficient

› Paper AP processing (100%) ‐ $10.40 (labour only)

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Accounts payable Integration of workflow, B2B messaging and paper processing

ComputershareYarra Falls452 Johnston StreetAbbotsford VIC 3067

Payment Details

Please send Payments to:

Computershare LimitedAccounts ReceivablesGPO Box 2975EEMelbourne VIC 3000

ABN 2234 3333 3333

452 Road Runner Way SEQUOIA ARIZONA 43067

Phone +61 (0)3 9415 5000Fax +61 (0)3 9473 2500

Invoice Date Invoice Numbers Amount Paid

29/04/20081/05/2008

00010383439498474300

$100.00$82.77

Sub Total $182.77

GST $18.28

Invoice Total $201.05

Message

Direct Deposit:

Account Name Computershare LimitedBSB 999 764Account Number 9999 99999

Bank XYZ Bank 2002 Collins St Melbourne Vic 3000

Remittance

Invoice

Email/Fax Invoice

National locked box

Approve payment

Exception workflow‐ Refer/approval flow‐ Raise PO

Matching/validation‐ PO master file‐ Vendor master file‐ HR master file‐ Proof of Delivery

B2B messages/EDI

Purchase order

Proof of delivery‐ GPS/RFID‐ Barcodes‐ EDI

10

Invoice and bill deliveryMaximise customer communications

Trans‐promo (bill messaging)

› Pro‐actively target slow pay / no pay customers

› Cross/up sell

Variable colour output

› Variable colour at equivalent cost to base black laser

› No base stock management, same day SLAs

Multi‐channel delivery

› Electronic bill payment and presentment (eBills)

In‐house office‐mail aggregation

› Low volumes via mail house to maximise postal discounts

11

Invoice and bill deliveryMaximise customer communications

Trigger X‐sell

Trigger Up‐sell

Purchase behaviour

CRM + Transactional data

Paper challenge

On‐premise solutions institutionalise paper within your organisation

Core strategy to reduce paper volumes and increase STP

Economies of scale institutionalise volume

On‐premise capability requires volume to amortise costs

13

Computershare’s experience

2007

Volume: 14 million• 11 million paper• 3 million electronic

Transaction cost: $1.20 unit• 57% fixed / 43% variable costs

Investments• IT and infrastructure• Scanning equipment• OCR / ICR software• Workflow

Paper

Electronic

14

Computershare’s experience

2010

Volume: 14 million• 4 million paper• 10 million electronic

Transaction cost doubled to $2.40• Fixed costs amortised over less volume• Under‐utilisation

Investments• EDI • Enterprise content management• Auto‐learning – capture, classification, indexing

Paper

Electronic

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Paper challenge

Outsource solutions provide the flexibility to purchase only what you need today and then add (remove) scale overtime as necessary

Core strategy to reduce paper volumes and increase STP

Outsource paper‐intensive processes actively reduces paper volumes

Changes low value cap‐ex equation to op‐ex aligned with business benefit

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Considerations

Improving your net cash cycle

› Talk to your bank regarding payment solutions

› OCR + real time look‐ups greatly reduces exceptions

› Leading solutions integrate paper and B2B gateways

› Maximise the communication potential of our bills

› Focus on eliminating paper but avoid on‐premise cap‐ex

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Thank you