1. Prepared by: Session ID: “Best-in-Class” AP Processing A How-To Guide Tom Steinhagen Senior Account Executive, Financial Process Automation Lexmark Enterprise Software 103370

2. 2 Meet Lexmark

3. We process over 2 billion invoices annually We automate the lifecycle of financial processes, start to finish We have over 12,000 customers globally

4. Visualizing top AP performance Three approaches to top AP performance Recommended key performance indicators The four key benefits of AP automation How to meet your organization’s needs AP automation customer success stories Questions and answers Agenda

5. 5 Visualizing top AP performance

6. Visualize your goal See things as you would have them be instead of as they are.” Robert Collier

7. Visualize top AP performance Source: Aberdeen Group: From the Shadows to the Forefront – AP Automation and the Strategic Vision 2013 3.7 days to process an invoice $4.0 average cost to process an invoice 65.8% capture rate for available early-payment discounts Best-in-Class

8. Visualize top AP performance Source: Aberdeen Group: From the Shadows to the Forefront – AP Automation and the Strategic Vision 2013 74% faster invoice processing 83% lower costs 86% greater capture rate for available discounts Best-in-Class Bottom 30% Point of comparison: Best-in-Class vs. bottom 30% of performers

9.  Two combined strategies  Lower costs through operational efficiency  Collaborate with suppliers How do the Best-in-Class do it?

10. 10 Three approaches to top AP performance

11.  Three approaches How do the Best-in-Class do it? What to stop doingWhat to continue doingWhat to start doing

12.  Operate decentralized AP operations  Instead, centralize at single location  Or, centralize through a shared service center  Pay invoices blindly  Institute a “No PO, No Pay” policy where possible, and integrate invoice-to-PO matching  Reduce paper and physical routing What to stop doing

13.  Measure AP performance  Once a month or more  Enable dashboards What to continue doing

14. 14 Measuring with key performance indicators

15.  What can KPIs really tell you?  How you stack up against your peers  The strengths and weaknesses of your system  If there are significant gaps in your AP process  Where you should focus process improvement  In which areas automation can be applied  Which gaps should be addressed prior to an automation project The benefits of key performance indicators

16.  AP cycle time / total invoice cycle time  Number of POs opened after invoice date  Number of internal check requests  Number of utility and freight bills  Number and percentage of invoices received electronically, if any  Number of mismatches (by cause)  Number of audit errors  Number of payments (by type)  Cost per invoice  Number of and dollars of duplicate payments  Number of invoices processed per AP associate  Number of customer service calls and emails  Number of discounts missed  Tax fines and penalties  Paid-on-time rate and number of invoices paid late  Number of invoices with a purchase order Recommended key performance indicators

17.  Standardize invoice processes  Across all locations and units  Eases difficulty of identifying root causes of errors What to continue doing

18.  Integrate AP solutions with PeopleSoft applications  Invest in automation of invoice receipt and workflow processes  Ensure that data are shared between solutions and all stakeholders  Work with suppliers  Increase discounting opportunities  Institute collaborative technology, such as a vendor portal What to start doing

19. 19 Four key benefits of AP automation

20. I. Efficiency  Shorter processing and payment cycle times  Shorter response times; productivity is improved by reducing time wasted on low- value activities  Streamlining of major AP sub-processes  Invoice receipt  Approval and inquiry  Validation and reconciliation settlements II. Visibility  Into the entire flow of AP processes  Into liabilities and operational expenses  Into billing discrepancies and overpayments, unclaimed negotiated discounts, contracted payment terms, early payment discounts, and late penalty fees Four key benefits of AP automation

21. III. Cycle time  Opportunity to negotiate better terms with partners  Lower transaction costs  Discount capture IV. Control  Simplified management of invoices and workflow  Improved forecasting and management of near-term cash management requirements  Decreased financial risk  Better coordination and information flow among key stakeholders

22. 22 Worthwhile AP project considerations

23. Emerging trends worth noting  Growing interest of SMEs  Senior IT executives have growing influence on core business  Companies are taking a holistic approach:  Technology  Companies are finding greater success by combining electronic invoicing and automated workflow  Organizational  Reasons for adoption are now strategic rather than tactical Before you start

24.  Technology (capture and workflow)  A static electronic invoice isn’t much better than a paper one  Successful companies are assimilating invoice data into accounting systems and management workflows  Integration of electronic invoicing and automated workflow yields the best ROI The advantage of a holistic approach

25.  Organizational (AP, IT and Finance)  Earlier, faster executive endorsement  Cross-departmental ‘buy in’ during and after implementation  Faster ROI  Guarantees long-term success of project  Greater rewards for the organization The advantage of a holistic approach

26. 26 How to meet the needs of AP, IT and Finance

27. Needs  Relief from the paper  Relief from supplier phone calls and emails  Move away from internal perception as inefficient cost center  Ease month-end stress  Lessen pressure to do more with less  Help enforcing business rules  Help dealing with invoice exceptions Addressing the needs of AP

28. Needs  Relief from the paper  Relief from supplier phone calls and emails  Move away from internal perception as inefficient cost center  Ease month-end stress  Lessen pressure to do more with less  Help enforcing business rules  Help dealing with invoice exceptions Apply technology – critical capabilities  Intelligent data capture  Supplier portal option  Approval workflow that can support business rules  Line-level approval  Facilitates productivity  Three-way matching  User-friendly interface  Accelerated coding Addressing the needs of AP

29. Needs  Lessen pressure to do more with less  Align project with IT strategy  Minimize demand to learn new computer environments  Maintain high reliability and business continuity Addressing the needs of IT

30. Needs  Lessen pressure to do more with less  Align project with IT strategy  Minimize demand to learn new computer environments  Maintain high reliability and business continuity Apply technology – critical capabilities  Supports latest PeopleSoft technology  Real-time integration with PeopleSoft application  Highly ‘configurable’ solution  Continuous, agile development of imaging and workflow  ‘Light’ IT project  Deployment/Training/Maintenance  Supports clustered environment Addressing the needs of IT

31. Needs  Pressure to maintain margin, manage cash  ROI for projects  Business operational efficiency  Ability to forecast  Access to reporting tools  Visibility over liabilities  Regulatory compliance requirements  Strong supplier relations Addressing the needs of Finance

32. Needs  Pressure to maintain margin, manage cash  ROI for projects  Business operational efficiency  Ability to forecast  Access to reporting tools  Visibility over liabilities  Regulatory compliance requirements  Strong supplier relations Apply technology – critical capabilities  Early payment discounts  Performance analytics  End-to-end processing  Shorter implementation time, cloud option or low customization option  Enforce compliance  Vendor portal  Audit controls  Fixed bid  Good value Addressing the needs of Finance

33. AP automation solution from Lexmark 33

34. AP automation solution from Lexmark ERP Integration Invoice Capture PO Line Pairing CAPTURE Exceptions/Non PO Invoice Approvals Accrual Reporting MANAGE Search ACCESS Desktop, Mobile, Web Lexmark enterprise content management platform Visibility and Control 30

35. What sets us apart more invoices with fewer resources PROCESS for how you do business FLEXIBLE investment across the enterprise LEVERAGE process owners with visibility and control EMPOWER

36. Industry recognition Leader Gartner Magic Quadrant for ECM Global presence and financial stability 2 billion invoices processed per year by customers 12,000 AP automation customers Innovator last 4 Institute of Financial Operations Innovation award winners are customers 1,365 issued patents 447 pending patents

37. Lexmark enterprise content management platform Automation solutions beyond AP Legal and Contracts  Contract management  Sales agreements  Intelligent discovery Finance Solutions  General ledger reconciliation  Audit solutions HR Solutions  Employee file management  Employee recruitment  Employee onboarding  Employee benefits management  Disciplinary and rewards management Accounting Solutions  Invoice processing  Expense processing  Supplier data management  Order processing  Remittance processing Procurement Solutions  Purchasing automation Payroll Solutions  Payroll processing Information Technology  Records and information management

38. Session ID: Please complete the session evaluation 103370