Tuesday, December 11, 2012 Invoice Automation Today and Tomorrow Mel Steals Director of Invoice Automation Solutions PNC A/P Advantage

Agenda  Payment Automation Context  Invoice Automation 101  Future State Thinking  Summary  Q&A 2

What is Payables Automation?  A Holistic Procurement-to-Payment Solution includes: –Eliminating paper from payable processing –Enabling efficiency and continuous improvement –Bringing visibility to outstanding work and liability –Accelerating approval and optimizing working capital –Enhancing financial control and regulatory compliance –Improving interaction and relationships with vendors Centralized Document Receipt Foundation for Invoice Paper Elimination E-Invoicing (e.g. EDI) integration including a Vendor Portal (free to suppliers) for status updates and invoice submission Invoice Match & Exceptions Purchase Order Purchase Request Invoice Workflow Analysis & Alerts Delivery Receipt Discounts & Payment Imaging Index & Archive OCR Keying & GL coding Invoice Receipt 3

Anecdotal Evidence: Paper in Payment Processes 4

Empirical Evidence: Paper in Payables Processes 5 Source: Paystream Advisors AP Department Benchmarks and Analysis 2011Source: Credit Today Benchmarking Survey: Electronic Billing and Payment Trends, Part II InvoicingPayments

6 Electronic Payment is Setting the Pace of Change

Vendor Management Automation Constrains Change 7

Common Challenges Processing Payment 8 ProcurePay Paper Handling Missing Invoices Errors Lack of Visibility Vendor Management Limitations Technology Constraints No Dominant Public B to B Network

Transforming Procurement to Payment Trends 9 ProcurePay OCR / IDR Maturity Cloud Computing Adapter Technology Flexible Architecture Electronic Networks

Strategic Value LowHigh Low High Spend Size Supply Chain Finance P-Card Discount Realization Enhancement Strategies 10

End Game: Make the “effective” cost per invoice zero 11 $- $1.00 $2.00 $3.00 $4.00 $5.00 $6.00 Accounts Payable and Approval Costs “Before Automation” Central Receipt, Front End Imaging and OCR savings E-Invoice, Matching, Workflow and Reporting savings Dynamic Discount, Supply Chain Finance or Unrealized P-card Assumptions: 10,000 Invoices Per Month $20 million Spend Base for Incremental Discounts 1.2% Discount Rate ≈ 22% APR

Invoice Automation 101

Multi Tenant Architecture a Must for Complex Organizations Using Cloud Computing Solutions 13 Roles and users Warrant Registers Environment default Storage Language Operation Licensing Master Client X Environment Company Client Y Environment Company  Each customer is housed in a distinct Environment  Each Environment has data in its distinct SQL Server database  The database contains pointers to images in the file system  Each environment contains its own set of web pages  The Master database contains higher level configuration information like transfer schedules

A/P Automation Building Blocks 14

Centralized Receipt via “Reverse” Lockbox 15

Invoice Data Capture (assisted by OCR) 16

The Inclusion of (Human Readable) E-Invoices 17

The Paperless Invoice Hub (Invoice Log) 18

Accessing Invoices via the Cloud 19 Data Capture Workflow GL Coding Presentation

Using the Vendor Portal to Improve Interaction 20

Implementation: Accounts Payable SME Facilitated Implementation Consultation PNC will assign a payables automation consultant to coordinate your experience, gather requirements, provide invoice processing advice and advocate for you. Planning and Documentation PNC will ask you for samples of current invoices, sample inbound/outbound files, record layouts, approver hierarchies, legal code definition. PNC will also gather business rules, special handling processes and reporting needs. Bi-directional file mapping will begin. System Setup and Configuration After reviewed by PNC’s technical team, a requirements document will be submitted for your approval. In addition, a Project Plan and a Test Plan will be finalized. PNC configures your rules and hierarchies. Your feedback on content, appearance and workflow is sought. Testing and User Acceptance PNC works with you to identify scenarios to test prior to going live. Training and Change Management PNC uses a train the trainer approach and can provide insights from other implementations. Go Live: Application placed in Production After the roll out is complete, a transition is made to a post implementation support model. Implementation typically takes between 75 to 120 days from sign off of requirements. 21

Implementation: Initial Configuration for Roles, Workflow, and GL Coding are Uploaded into Tool 22

Implementation: The Primary Implementation Dependency on IT is in Transmission Establishment 23

Future State of Payment Automation

Status and Validation Tables Approved Invoices Suppliers Invoice Receipt Outsourcing Buyer System of Record Invoice Data Supplier with < 100 invoices / month or Fax (Lockbox Operations) Invoice Data Supplier sending paper by mail Post Office (Lockbox Operations) Invoice Data File Integration (E-commerce Ops) Supplier with > 100 invoices / month Supplier using Web - entry Invoice Data Web Entered Data (Supplier Portal) The Future of Payment Automation Bank Portals Payment Platform Buyer ERP Client System of Record Buyer ERP Client System of Record Supplier Portals Self Service Administration PO Delivery PO Flip Invoice Validation Approval and Pay Status Reporting and Data Export Available Discounts Financing Options Vendor Master Integration Buyer Portals Exception Archive Invoice Log PO / Contract Matching Approval Routing Dashboards, Reporting and Data Exports Requisition / PO Creation Catalogues* Discount Options* Buyer Portals Exception Archive Invoice Log PO / Contract Matching Approval Routing Dashboards, Reporting and Data Exports Requisition / PO Creation Catalogues* Discount Options* Emerging Cloud Based Invoice Interface Products * Third party dependencies 25

Mobile Approval and Invoice Receipt 26 APAMobile Invoice Approval from a Smart Phone:  Aimed for the people “On the run”  What one can do: 1)Log into APA via web browser 2)Pick one (or more) invoice(s) 3)Review key details Invoice basic information Posting Invoice image Workflow 4)Sign or send as Unknown  Not an app! Works with “any” smart phone that can access the web via a browser  Mobile Invoice Input / Receipt:  Take a picture  it to your local Expense adress For example: company.com company.com

Summary

AP Automation: Back office payables automation combined…. 28 ERP Status & Validation Tables Approved Invoices Suppliers Archiving, Matching, Workflow and Reporting Platform Invoice Data Supplier sending paper Paper invoices (Boston Lockbox) Invoice Data Supplier with < 100 invoices / month and Fax (Boston Lockbox) *All suppliers have ability to track invoices through the Supplier Portal Invoice Data Supplier on other networks Through B to B networks Receiving Operations System of Record A/P Automation Technology Invoice Data Direct supplier integration Supplier with > 100 invoices / month Optical Character Recognition (OCR) Platform Supplier using Web - entry Invoice Data Web entered invoice data Supplier Portal Supplier Portal File Mapping Platform

Payment Optimization: ….with front end payment optimization. 29 ERP Consolidated Payment File Card Check Print/Mail CDA/ARP Wire ACH Payables Advantage platform separates check from card payments Checks printed and mailed to suppliers Cards loaded and notifications To suppliers Export File / Reports Control Totals Information Reporting Check Register Balance Reporting Special Reports ACH Platform Sent to Fed or SWIFT for settlement Feeds ARP, Positive Pay and Payee Positive Pay Check Image Funds Transfer Card Platform Sent to EPN clearinghouse Print Platform ARP Platform Wire Platform Status & Validation Tables Approved Invoices

The benefits of invoice automation parallel the benefits of payment optimization 30 Centralizing Invoice Document Receipt Easing Electronic Invoice Enablement Automating A/P Workflow Process Providing Visibility and Intelligence Optimizing Working Capital Usage Procure PAYMENT OPTIMIZATION Outsourcing Check Printing Consolidating File Types and Formats Standardizing Payment Process Accessing Information via the Web Maximizing Card Revenue Share APAUTOMATIONAPAUTOMATION

All Organizations Face Pressure to Drive Down Invoice Processing Costs to Best-in-Class Levels 31 Source: The Hackett Group

Material differences in the economics of the various payment alternatives create the opportunity to pursue an optimum payment mix and a winning proposition. Payment Optimization – Working Capital Value Add 32

Q&A 33