Going Green in Accounts Payable

1. Going Green in Accounts Payable Presented by: Chris Doxey, CAPP, CCSA © BUSINESS STRATEGY INC.

2. Going Green in Accounts Payable • Introduction • The Green AP Department • Where are the “Piles of Paper?” • Green AP processes as best practices • Impact on vendor satisfaction and productivity • Implementation: Going for the Green • Impact on IT and asset disposal © BUSINESS STRATEGY INC.

3. Introduction © BUSINESS STRATEGY INC.

4. Why Green? Driven by escalating energy prices and consumer demands for environmental awareness and social responsibility, more companies are undertaking the hugely ambitious task of greening their supply chain from start to finish on a worldwide basis. © BUSINESS STRATEGY INC.

5. Has Your Company Implemented a “Green Strategy”? © BUSINESS STRATEGY INC.

6. What Companies are Doing to “Go Green” - Starbucks Starbucks has a quadruple bottom line approach: • Quality • Social responsibility • Environmental Sustainability • Profits © BUSINESS STRATEGY INC.

7. What Companies are Doing to “Go Green” - Wal-Mart Wal-Mart CEO Lee Scott stunned the business world three years ago when he told a meeting of 1000 suppliers and other partners, “Environmental sustainability must become a part of the company’s formidable supply chain operations.” • Eliminate 30% of energy use in stores. • Evaluate suppliers on the environmental acceptability of their packaging. • Using supplier packaging acceptability to make buying decisions. © BUSINESS STRATEGY INC.

8. What Companies are Doing to “Go Green” - IBM • IBM started working collaboratively with suppliers to determine ways to consolidate shipments. • IBM is also getting together with manufacturers to determine targets for reducing carbon emissions. © BUSINESS STRATEGY INC.

9. The Green AP Department © BUSINESS STRATEGY INC.

10. The Green AP DepartmentPaperless AP • Paperless AP cuts costs, increases productivity, speeds up approvals (allowing organizations to take advantage of early payment discounts), and improves controls. The result is AP managers who do more with less. • This approach transforms AP from a back-office, paper-pushing operation into a department that can bring real strategic value to the company. © BUSINESS STRATEGY INC.

11. The Biggest AP Headaches © BUSINESS STRATEGY INC.

12. Where are the Piles of Paper? • Vendor Master File Maintenance • Vendor Statement Handling • Vendor Resolution • Expense Management • P-card Payments and Auditing • Manual Check Requests • Invoice Processing • Invoice Exception Handling © BUSINESS STRATEGY INC.

13. Where are the Piles of Paper? • Vendor Master File Maintenance • Vendor Statement Handling • Vendor Resolution • Expense Management • P-card Payments and Auditing • Manual Check Requests • Invoice Processing • Invoice Exception Handling © BUSINESS STRATEGY INC.

14. Invoice is determined to need vendor set up or vendor change Information is sent to vendor file maintenance Vendor maintenance employee contacts vendor for required documentation, including W9 Vendor information is received and invoice is released for payment Invoice is placed on hold until the appropriate documentation is received and vendor file is updated Vendor Master File“Green AP” Solution © BUSINESS STRATEGY INC.

15. When invoice is received, the system looks for required documentation and W9 If required documents are not available, vendor maintenance is notified and the vendor is notified of the requirements Vendor Master File“Green AP” Solution Note: The invoice is traceable © BUSINESS STRATEGY INC.

16. End user receives statement or fills out expense report Documents get sent to Accounts Payable for processing P-cards“Green AP” Solution Recommended audit of at least 25%of transactions If additional information is required, the documents are sent back to end user Documents get sent for approval © BUSINESS STRATEGY INC.

17. Electronically sent to Accounts Payable for processing P-cards“Green AP” Solution P-card statement is received via email to end user or expense report is filled out via e-form Note: Audit conducted electronically End user scans to file supporting documentation Electronically forwarded to approver © BUSINESS STRATEGY INC.

18. Electronically sent to Accounts Payable for processing Manual Check RequestsAutomationSolution Manual check form is filled out via e-form Note: Audit conducted electronically End user scans to file supporting documentation Electronically forwarded to approver © BUSINESS STRATEGY INC.

19. Are “Green AP” Processes Able to Have an Impact on Vendor Satisfaction and Productivity? © BUSINESS STRATEGY INC.

20. Implementation: Going for Green © BUSINESS STRATEGY INC.

21. 10 Steps to a Greener AP Office • Shutting off lights • Powering down PCs and monitors • Using coffee mugs instead of Styrofoam cups • Encourage carpooling or mass transit • Only print emails and other documents when necessary • Ramp up recycling efforts (Cell phones, PDA’s) • Rethink travel • Use Web and Teleconferencing when possible • Order office supplies wisely • Order from suppliers that use recycled materials • Use Eco-friendly business cards • Go paperless! © BUSINESS STRATEGY INC.

22. Other “Green AP” Considerations • Vendor portals • Invoice uploads to ERS • Business rules for processing manual checks • EFT • Establish “Green AP” pilots with vendors • Team with Internal Audit to determine requirements for “hard copy” documentation What else? © BUSINESS STRATEGY INC.

23. Eight considerations for your it department • “Lights-out” policies • Monitor power consumption carefully • Server consolidation • Avoid duplication of data • Modify floor layouts to avoid concentrating heat • Replace old equipment with energy efficient equipment • Server virtualization • Server virtualization is the masking of server resources, including the number and identity of individual physical servers, processors, and operating systems, from server users. The server administrator uses a software application to divide one physical server into multiple isolated virtual environments. • Thin provisioning • Thin provisioning (TP) is a method of optimizing the efficiency with which the available space is utilized in storage area networks (SAN). TP operates by allocating disk storage space in a flexible manner among multiple users, based on the minimum space required by each user at any given time. © BUSINESS STRATEGY INC.

24. Dead PC WalkingQuestions to Ask When Working With an Organization for Asset Disposal • Is data destroyed according to Department of Defense Specifications? • What kind of documentation is provided? • What materials are reused and recycled? • How are hazardous materials disposed of? • What is the cost of disposition? • Is compensation provided for metals and other materials mined during the process? © BUSINESS STRATEGY INC.

25. Dead PC WalkingE-Structors Process 1. Collection: E-Structors sends trained employees to collect and securely transport your materials from your place of business to our 95,000-square-foot processing facility. 4. Recycling: Each separated container is processed to create repurposed materials, including steel, glass, plastic and precious metals. 2. Receiving/Tracking: Once received, E-Structors uses a bar coding system to track your material from arrival to destruction. To ensure timely disposal, we destroy all materials within 24 hours of receipt. 5. Documentation: Your organization receives a Certificate of Destruction from E-Structors certifying the complete destruction and proper disposal of your materials. 3. Processing: Using our state-of-the-art destruction system, your material is mechanically shredded into pieces no larger than 1.5”. The resulting material is then separated into processing bins for 100% recycling. http://www.e-structors.com/main.asp?page=1160 © BUSINESS STRATEGY INC.

26. References • http://latimesblogs.latimes.com/emeraldcity/2008/02/green-workpla-6.html • http://www.e-structors.com/main.asp?page=1160 • http://blog.170systems.com/?Tag=Paperless+AP • “What is Your Green Strategy?” by Anne R. Field, Treasury and Risk, October 2008 • “How Green IT Measures Up” by Cameron Sturdevant, eWeek, October 27, 2008 © BUSINESS STRATEGY INC.

27. Thank you for your time ! http://www.businessstrategy.com/ © BUSINESS STRATEGY INC.