Sam Ahuja Chief Solutions Architect OPTURA [email protected] (480) 488-3040 x203 Best Practice...
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Transcript of Sam Ahuja Chief Solutions Architect OPTURA [email protected] (480) 488-3040 x203 Best Practice...
Sam Ahuja
Chief Solutions Architect
OPTURA
(480) 488-3040 x203
Best Practice WorkflowBetween Procurement and A/P
Session Code: 4707
Chris Callahan, Procurement Sys Mgr
Tim Thomas, VP Purchasing
Jim Tunnell, CIO
PILGRIMS PRIDE
(972) 290-2651
Examples of Efficiency Gains from A/P Initiatives
ERS
EDI
P-Card Imaging
&
Workflow
Focus of This Presentation:
Best Practices in Imaging and
Workflow
• Best Practice Tenets:
• Centralizing Invoice Receipt
• Removing A/P from Manual Invoice Resolution / Follow-up
• Analyzing Process Data for Continuous Efficiency Gains
• Developing the Business Case for a Project
• Pilgrims Pride Case Study
Agenda
Centralizing Invoice Receipt
Vendor A Vendor B Vendor C
Requisitioner
Approvers
Project Manager
Receiver
Buyer
A/P
Vendor A Vendor B Vendor C
A/P
Workflow
Receiver Buyer
Approver
Vendors Send All Invoices Directly to A/P
Centralizing Invoice ReceiptCentralizing Invoice Receipt
PaperlessPaperless
ImagingImaging
FaxFax
OnlineOnline
Benefits
• Immediate visibility to total liabilities
• Improve internal efficiency
• Reduce duplicate payments by
• eliminating lost invoices
• eliminating receipt of same invoice multiple times
• automated duplicate checking
• Improve vendor service
• on-time payment
• quick status response
• Centralize control
Centralizing Invoice Receipt
Nearly 7% of large companies (5,000 employees) report
that more than 0.5% of invoices are paid twice.
Nearly 3% of firms with 500 – 5,000 employees “border on
the unacceptable” 0.5% of invoices paid twice.
Duplicate Payments
Source: IOMA’s A/P Department Benchmarks and Analysis 2003
Imaging
Automatic Duplicate
Check
AutomaticParking Approval
Workflow
“Intelligent”SAP Inbox
Pre-populatedSAP
Transaction
P.O. Box Setup
Doc. Prep.
Scan
In-house or Outsourced Scanning
Best Practice:
Early Imaging (“Early Archiving”)
SAP
OCR or Manual Indexing
Fax Invoice
“Intelligent” SAP Inbox
Step 4: Pre-populated Transaction
Transaction appears with indices pre-populated in red
Pre-populated SAP Transaction
• Best Practice Tenets:
• Centralizing Invoice Receipt
• Removing A/P from Manual Invoice Resolution / Follow-up
• Analyzing Process Data for Continuous Efficiency Gains
• Developing the Business Case for a Project
• Pilgrims Pride Case Study
Agenda
Removing A/P from ManualProblem Invoice Resolution / Follow-up
CreateSAP
Document(MIRO, FB60)
Imaging
Okay
Post
Invoice in SAP
Exception
Invoice Exception Invoice Exception WorkflowWorkflow
SUSPENDED
Invoice
PARKED
Invoice
BLOCKED
Invoice
Removing A/P from Manual Problem Invoice Resolution / Follow-up
Remove A/P from Manual Problem Invoice Resolution / Follow-upRemove A/P from Manual Problem Invoice Resolution / Follow-up
Identify All Exception ReasonsIdentify All Exception Reasons
Benefits
• Improve internal efficiency
• Focus A/P on more knowledge-based work such as analysis
• Capture early payment discounts
• Eliminate late payment charges
• Standardize business processes – build rules into the system
• e.g. let system verify signature authorities
• Negotiate better terms with vendors
Pre-define Process StepsPre-define Process Steps
Keep Workflow Inside SAPKeep Workflow Inside SAP
Automatically escalate inactionAutomatically escalate inaction
Moving from a low to a medium level of automation will cut
the cost to process a vendor payment by 30% - 60%.
Moving from a medium to a high level of automation will
cut this cost by another 20% - 35%. Also, it will enable an
A/P department to more than double the number of PO
invoice payments made per A/P staffer.
Increasing A/P Efficiency
Source: IOMA’s A/P Department Benchmarks and Analysis 2003
Removing A/P from ManualProblem Invoice Resolution / Follow-up
CreateSAP
Document(MIRO, FB60)
Imaging
Okay
Post
Invoice in SAP
Exception
Invoice Exception Invoice Exception WorkflowWorkflow
SUSPENDED
Invoice
PARKED
Invoice
BLOCKED
Invoice
Removing A/P from ManualProblem Invoice Resolution / Follow-up
Defined
BLOCKED Invoices
• Sufficient information IS available to post invoice
• Invoice is posted
• SAP Blocks invoice automatically based on pre-configured tolerance(‘R’ block)
Scenarios
• Price Variance
• Quantity Variance
• P.O. Exceeds
• Partial Receipt
• No G/R
• Date Variance
• Price-Quantity Variance
PO G/R Inv.
Q
P
4 42
$2,000 $2,000-
Blocked Invoice
Blocked Invoice Scenario
A/PExceptionHandler
Buyer
Receiver
A/P Processor
Example Blocked Invoice Process Flow
See the demonstration during the ASUG presentation, or
contact [email protected] to receive a copy of the files
containing the demonstration via e-mail. Thanks.
Best Practice Workflow Demonstration
1. No nuisance workflow is started if vendor sends invoice early
2. Dashboards allow for a quick, accurate decision
• Provide snapshot of problem
• SAP Documents + Invoice Image readily accessible
• Available options are based on the user’s role
• Actions are performed on behalf of user
• Comments can be entered
• History log of this workflow is accessible
3. Allow for ad-hoc capabilities within a structured process.
4. Background simulation of 3-way match
• Ensures corrective actions have taken place
Workflow Best Practices
5. Unit of work: Line item to header-level consolidation
• Header-level dashboard for A/P
6. Clean up inbox automatically
• Correcting PO, GR, or Invoice from outside workflow automatically clears inbox items
7. Controlled override of next “agent”
8. Parking Reasons: Flexible routing by parking reason
e.g. Non-PO Invoice Approvals
• Auto-park invoices for approval
• Auto-post in background or route to A/P for QA
• Auto detect posting period change
• Controlled routing of errors such as blocked vendor
Workflow Best Practices
Removing A/P from ManualProblem Invoice Resolution / Follow-up
CreateSAP
Document(MIRO, FB60)
Imaging
Okay
Post
Invoice in SAP
Exception
Invoice Exception Invoice Exception WorkflowWorkflow
SUSPENDED
Invoice
PARKED
Invoice
BLOCKED
Invoice
Removing A/P from ManualProblem Invoice Resolution / Follow-up
Defined
PARKED InvoicesScenarios
• Sufficient information is NOT available to post invoice
• Invoice is manually or automatically Parked
• “Parking Reason” is selected
• Non-PO Invoice Approval Required
• Service Approval Required
• Unable to Match PO Lines
• PO is Closed or Not Released
• Freight Charge Analysis
• Special Tax Treatment (Wrong tax code from PO)
• Unit of Measure mismatch
• Invoice and P.O. currency are different
• Invoice and P.O. vendor name or # are different
• Vendor Master Maintenance
• Request more information from Vendor
Parked Invoice
Parked Invoice Scenario“Unable to Match PO Lines”
Example:
PO contains only one line-item for $2000
Invoice arrives with one line-item for $2000,
but also a second line item for $1500.
Example Parked Invoice Process Flow
A/PExceptionHandler
External Vendor
Buyer
A/P Processor
See the demonstration during the ASUG presentation, or
contact [email protected] to receive a copy of the files
containing the demonstration via e-mail. Thanks.
Best Practice Workflow Demonstration
1. Keep the A/P Processors’ Inbox clean – touch each invoice only once
2. Parking Reasons: Flexible routing by parking reason
3. e.g. Non-PO Invoice Approvals
• Have vendor specify routing info
• Auto-park invoices for approval
• Allow for separate coding (account assignment) step
• Allow for ad-hoc approval routing
• Allow for parallel approvals by multiple cost centers
• Auto-post in background or route to A/P for QA
• Auto detect posting period change
• Controlled routing of errors such as blocked vendor
Workflow Best Practices
Removing A/P from ManualProblem Invoice Resolution / Follow-up
CreateSAP
Document(MIRO, FB60)
Imaging
Okay
Post
Invoice in SAP
Exception
Invoice Exception Invoice Exception WorkflowWorkflow
SUSPENDED
Invoice
PARKED
Invoice
BLOCKED
Invoice
Removing A/P from ManualProblem Invoice Resolution / Follow-up
Defined
SUSPENDED InvoicesScenarios
• Unable to even park an invoice
• No SAP document is created
• “Suspension Reason” is selected
• Image is routed for resolution
• New Vendor Master Required
• Service Entry Required
• Rescan Required
• Contact Vendor
• Unable to Match PO Lines
• Currency Mismatch
• Special Tax Treatment Required
• Freight Mismatch
• Unit of Measure mismatch
• Vendor Master Maintenance Required
See the demonstration during the ASUG presentation, or
contact [email protected] to receive a copy of the files
containing the demonstration via e-mail. Thanks.
Best Practice Workflow Demonstration
• Best Practices:
• Centralizing Invoice Receipt
• Removing A/P from Manual Invoice Resolution / Follow-up
• Analyzing Process Data for Continuous Efficiency Gains
• Developing the Business Case for a Project
• Pilgrims Pride Case Study
Agenda
Analyzing Process Data for Continuous Efficiency Gains
Analyze Process Data for Continuous Efficiency Gains Analyze Process Data for Continuous Efficiency Gains
Eliminate BottlenecksEliminate Bottlenecks
Benefits
• Identify common exception reasons, and problem vendors
• Analyze process cycle time to identify process bottlenecks. Which regions / roles / individuals take the longest time to process?
• Share metrics with internal stakeholders and perform root cause analysis
• Analyze trends over time – problem occurrences and the $ value of those occurrences.
Use Online Audit TrailUse Online Audit Trail
Use actual workflow data from SAP
Use actual workflow data from SAP
See the demonstration during the ASUG presentation, or
contact [email protected] to receive a copy of the files
containing the demonstration via e-mail. Thanks.
Best Practice Workflow Reporting Demonstration
• Best Practices:
• Centralizing Invoice Receipt
• Removing A/P from Manual Invoice Resolution / Follow-up
• Analyzing Process Data for Continuous Efficiency Gains
• Developing the Business Case for a Project
• Pilgrims Pride Case Study
Agenda
Developing the Business Case for a Project
Hard Savings
1. Reduce/redeploy A/P resources
2. Reduce duplicate payment
3. Reduce Late payments
4. Capture more early payment discounts
Soft Savings
1. Improved productivity for Buyers, Requisitioners, Receivers…
2. Visibility to total liabilities
3. Improved customer service
4. A/P focuses on more knowledge work rather than chasing problems
5. Online audit-trail
6. Eliminate papere-mail [email protected]
for ROI spreadsheet
• Best Practices:
• Centralizing Invoice Receipt
• Removing A/P from Manual Invoice Resolution / Follow-up
• Analyzing Process Data for Continuous Efficiency Gains
• Developing the Business Case for a Project
• Pilgrims Pride Case Study
Agenda
PILGRIMS PRIDE Case Study
Click on the presentation above
Sam Ahuja
Chief Solutions Architect
OPTURA
(480) 488-3040 x203
Best Practice WorkflowBetween Procurement and A/P
Session Code: 4707
Chris Callahan, Procurement Sys Mgr
Tim Thomas, VP Purchasing
Jim Tunnell, CIO
PILGRIMS PRIDE
(972) 290-2651