“Exploring AP best practices & trends for improved processing in Oracle E-Business Suite”

1. “Exploring AP best practices & trends for improved processing in Oracle E-Business Suite” December 15, 2011

2. The challenges of efficiently processing invoices Invoice automation benefits Maturity of AP automation Automation best practice recommendations End-user experience with AP automation Agenda Mike Ventrella Director of National Oracle Sales and Cliff Autin Manager of Oracle Consulting Services ReadSoft North America

3. Purchase to Pay and Order to Cash Purchase to Pay: Invoice processing Buyer areas Various departments Demand, need or requirement Create a requisition Supplier areas SALES PURCHASING Process incoming PO Create purchase order Purchase order Create a sales order Process incoming confirmation Order confirmation Logistics executioN Logistics executioN Deliver goods or services Process incoming delivery notes Delivery note ACCOUNTS RECEIVABLES ACCOUNTS PAYABLE Invoice Create outgoing invoice (bill) Process incoming invoices Process RA and find open items Remittance advice Create remittance advice Clear open items Pay invoice Payment

4. Top pain points for AP processes Source: PayStream Advisors Financial Automation Survey http://www.paystreamadvisors.com/

5. What are the business issues we see? AP Management • Repetitive manual data entry • Line item matching • Low quality of data caused by human error • Cost control / high AP operational costs • Inefficient invoice storage & retrieval • Lost & fraudulent invoices, duplicates • Penalty for late payments • Poor supplier service levels • Challenges with financial reporting • Cash management • Corporate compliance / Sarbanes-Oxley

6. There is a lot you can do Manual keying: Eliminate Verification & validation: Reduce costs dramatically Registration & allocation: Reduce costs Personal copies: Eliminate Archiving: Reduce costs dramatically Late payment penalties: Eliminate Write-offs: Reduce Early pay discounts: Get them

7. Better control and security Fast and simple electronic distribution Full control of your document flow Electronic account coding & payment authorization Easily accessible information High security SOX compliance support 40-60% cost savings

8. Quantifying the benefits of approval workflow

9. The use of electronic integration, messaging, reconciliation & reporting solutions in AP reduced transaction cost between 63% and 67%. • Most companies have moved to a shared services model to improve policy and process compliance. Yet, only 3% of AP processes reported having a high-level of automation. • 79% of AP managers see "automation" as the key enabler to future success. • The invoice reconciliation and payment solution framework addresses invoice receipt, approvals, reconciliation and payment considerations for solution selection. (From the Electronic Invoicing Solution Selection Report) research shows…

10. Automation Adoption Rates Climbing “Almost 80 percent of the executives surveyed said they had either already launched an invoice automation initiative or planned to within a year.” - Invoice Automation Adoption Survey Report

11. Enable Automation • Across Inbound • Channels for Maximum • Efficiency & Savings • (mailed, faxed, • electronic, e- • mailed, P-Cards, etc…) • Supplier Self- • Service • Supplier On- • Boarding • Dynamic • Discount • Management • Integrated • Purchase-to-Pay • Business • Intelligence/Analytics Strategic Efficiencies (Exponential ROI) Accounts Payable AutomationMaturity Model • Automated • Matching & • Exception • Handling • Conversion of • Invoices from • POs • Dispute • Resolution • Management Tactical Improvements (Immediate/Tactical ROI) • Key Invoice from • Image • Online Manual PO • Matching • Automated • Approval • Processing • Activity • Reporting Maturity of Processing Automation • Invoice Scanning • Manual Indexing • Manual Approval • Processing Optimized Discount Capture & Improved Use of Working Capital

12. Best practice recommendations for streamlining AP • Centralize invoice receipt • Establish imaging early in the AP process • Capture data from the images • Leverage existing Oracle infrastructure and business rules • Auto matching capability PO-based invoices • Improve cycle times with integrated workflow/account coding • Take advantage of early pay discounts • Centralize visibility, control and reporting to manage and improve processes

13. Upgrading to EBS R12 • EBS R12 is the bridge to Fusion Applications. • If you are considering or in the process of an R12 upgrade, be sure any vendor applications are validated through Oracle. • While still on EBS11i, consider adopting an R12 compatible AP solution. • R12 upgrade in your near future? Consider implementing AP automation simultaneously.

14. Oracle integration AP Best Practice Solution BusinessNeeds Oracle Integration • Oracle validation for PO, supplier, site, duplicate invoice, contact person etc. • Use of E-Business Suite components such as legal entity, GL code combinations, users, employees, responsibilities, hierarchies, AP/PO options, Oracle standard workflow engine, profile options etc. • More accurate information, using existing Oracle set-up: • Automatically assigns organization code • Automatically assigns supplier/site • Prevents duplicate invoices • Checks for valid PO • Uses existing COA, code combination, Hierarchies etc. • Uses Oracle standard workflow engine • Uses standard Oracle validation rules & hold codes

15. Single source vendor BusinessNeeds AP Best Practice Solution • Single OCR to Oracle solution for automated AP processing • Support provided for all areas of the solution One Stop Shop • Adopt document recognition and Oracle workflow components from the same company: • Call one vendor for support • Same solution across the world, software, implementation & support • Upgrades guaranteed to work • No risk with multiple vendors • Product roadmap known

16. Invoice Automation Experiences World leader in fluid handling systems and components • Pain Points: • Too much time wasted keying invoices • Too many lost discounts • Couldn’t locate invoices • Low visibility Goals: • Increase processing speeds • Capture more discounts • Gain visibility & control over invoices in the AP process

17. Invoice Automation Experiences • Implementation • Customizations around outdated, pre-existing legacy system prolonged implementation • Dropped customizations in the end since the • system was going away in the future • Advice: Do your due diligence of what you really want & hope for beforehand Results: • Initial goals set for two years were met within the first six months • More efficient use of people resources within the first four months • Average invoice processing time dropped from 24 days to 9 • 70% of invoices are not touched by staff • Faster and improved visibility over existing liabilities

18. Invoice Automation Experiences • “We have really partnered more with buyers & planners in purchasing.” • “Another thing is that all the controllers are able to go in and look at the expense reports & invoices. At the end of the month they’re no longer calling us, and it doesn’t take any of AP ‘s time.” JewalsUbl, AP Manager, Graco Inc.

19. What can you LEARN from Graco’sexperience? • AP process automation can pay big benefits with… • Thoughtful preparation • Identifying needs and goals • Assigning & empowering staff resources • Consider implementation phases & schedules • Be prepared to adapt and adjust, but… • Always keep the scope of each phase as a touchpoint

20. AdditionalAutomation Achievements • Vodafone • Processed 50% more invoices in 2nd month after automating • Kellogg’s • 50% of PO-based invoices go from Scan to Post untouched • Green Mountain Power • Enabled to take early payment discounts, greatly reduced vendor calls, &majority of top vendors are now enabled to send PDFs instead of paper • Alcan • Significant reduction in manual processing, data entry, filing and retrieval; majority of PO-based invoices automated • Sheridan • 3-month installation, including testing and go-live; able to negotiate significant discounts; able to process more invoices with fewer people; able to report in real-time on vendor spend

21. When Considering AP Automation… • Know the difference between “it can” and “it does” • Questions & dialogue with potential vendors • Was it designed to work in your environment? • Know yourself • Are you hands-on ready or do you expect turn key? • How involved in detail planning & process implementation can you/do you want to be? • Start with an assessment • Don’t underestimate the culture fit • Know where you are today and where you want to go

22. www.readsoft.com888-READSOF(T) mike.ventrella@readsoft.comcliff.autin@readsoft.com