0. Leveraging technology — From invoice to payment
Robin Steffey
Senior Vice President
Payables Solutions Consultant
Reid Andrews
Treasury Management Consultant
July 17, 2017
© 2017 Wells Fargo Bank, N.A. All rights reserved. For public use.

1. Procure to Pay

2. Typical procurement process – inefficient and costly
RPMG Research Corporation, 2014 Purchasing Card Benchmark Survey Results

3. The process starts WHERE HOW WHEN WHO Centralized | Decentralized
Electronic | Paper
WHEN
Timeliness
WHO
Multiple touchpoints
RPMG Research Corporation, 2014 Purchasing Card Benchmark Survey Results

4. How does your organization stack up?
Invoice processing time
Invoice processing cost
Early payment discount capture
$23.30
65.8%
42.7%
In days
Bottom quartile
$9.60
Average
Best
$4.00
8.9%
From the Shadows to the Forefront: AP Automation and the Strategic Vision, Aberdeen

5. Automation is the key Full A/P automation Payments factory
61%
Full A/P automation
33%
46%
Payments factory
14%
40%
Invoicing network
28%
Mobile application for financial management activities
40%
23%
Supply chain finance module /platform
20%
11%
Leaders Followers
Percentage of respondents, n=60
Source: Aberdeen Group

6. Receiving invoices
2015 USPS Fact Sheet
2015 Visa Benchmark Study

7. Fully automated workflow

8. Invoices get into the AP system
Gorilla Expense – April 2015

9. Payment Optimizer Sample Output – Overall Vendor Snapshot
Unlocked working capital based on current DPO
Model Inputs
Potential unlocked working capital based on targeted DPO
E-Payment Strategy

10. Payment Optimizer Sample Output – Vendor Specific Snapshot

11. Payment Automation

12. Supplier characteristics
Supplier payments
Commercial cards
ACH
Wires
Checks
Remittance
Supplier characteristics
Terms
Relationship
Technology

13. Analyzing how you pay
Average cost per transaction cost by payment type
Payment method
Cost per transaction
Paper
Paper checks
$7.15
Electronic
Wire transfer
$10.33
ACH
$4.78
Commercial cards
$3.91
Potential savings with Card: $3.24 per transaction
Scott Pezza, William Jan, and Ankita Tyagi, "The E-Payables Solution Selection Report: A Buyer's Guide to Accounts Payable Optimization," Aberdeen Group (October 2013).

14. Cost to the supplier Cost to buyer?* Cost to supplier† Value?
Value factors
Check
$7.15
$33 ?
ACH / DD
$4.78
$32
Wire / Electronic
$10.33
$43
Commercial card
$3.91
$22
Vendor Reporting
Spend Management
Process Automation
Compliance
Expense Control
Audit
Cash Back / Rebate?
*Scott Pezza, William Jan, and Ankita Tyagi, "The E-Payables Solution Selection Report: A Buyer's Guide to Accounts Payable Optimization," Aberdeen Group (October 2013).
†Fully loaded cost per $500 transaction

15. Having a game plan — supplier analysis
Collect vendor data
Analyze data
Define and deploy strategy
Achieve results
Reduced payment issuance costs +
Working capital impact +
Payment discounts +
Card revenue share +
Supply chain finance +

16. Once you determine method of payment, automate your payment process
One file
Payee
Your payables system
Your bank
Major banks like Wells Fargo offer payment platforms, such as Wells Fargo’s Payment Manager® that can support multiple payment types in a single file.

17. The payments landscape is changing fast
– and much of this fast-paced change is being driven by today’s digitally empowered consumers, whose expectations have been transformed by the smartphone and the services these supply.
* ITProPortal, “Trends in electronic payments: What to expect in 2016,” December 2015

18. Mobile payments are catching on
Person to person (P2P) mobile payments: consumers sending payments to other consumers online or via mobile app
1.4 Billion smart phones sold in 2015
U.S. P2P mobile payments
(Billion $)
25% U.S. adult smartphone users initiate
P2P payments monthly
58%
of consumers
favor the convenience
of mobile
commerce
28% of Americans view mobile payments as payment method of the future
Sources: Gartner, eMarketer.com, Mobile Commerce Press, Mintel

19. Payment Manager® with B2P payments
Pay consumers electronically with addresses or mobile phone numbers in lieu of bank account info*
Leverages the clearXchange database (an Early Warning Services company+), to be rebranded as Zelle in mid 2017
*USD payments to consumers with US bank accounts
+Early Warning Services is a real-time securing messaging platform and directory

20. What powers B2P payments?
Digital payments network
Created by banks and managed by Early Warning Services
One-time registration
Consumers associate their address/mobile phone number with a bank participating in the network or at clearXchange.com, thereby setting up their “token”
Cross-reference of bank-to-token information
At payment initiation, Wells Fargo receives address or mobile phone number (payee’s token) and makes call to the network to receive depository bank information. Then money is moved from bank to bank to complete payment.

21. B2P payment solutions B2P to both Registered & Unregistered Payees
At time of payment initiation, registered payees receive funds into depository account within 2 business days, without requiring further action from payee
If payee is not registered at time of payment initiation, Wells Fargo will * payee a one-time registration invitation, including instructions for enrollment to receive the electronic payment
Payee has 14 calendar days to register
Solution reduces need to ensure payees are registered prior to payment initiation
Promotes payee acceptance of B2P payment type as no upfront effort is required
B2P to Registered Payees
Send payments only to payees who have already registered their address or mobile phone number
Payments initiated to an unregistered or mobile phone number will reject, to be reinitiated using an alternate payment method
Solution reduces potential for returned payments as no additional steps are required from payees for payments to settle into depository accounts
B2P to Registered Payees, with WF Check Completion Option
Send payments to payees who have already registered their address or mobile phone number.
If the B2P payment cannot initiate successfully to a registered address or mobile phone number, or the solution determines the address or mobile phone number is not registered, Wells Fargo will automatically issue a check payment, which will streamline your back-office operations.
You include complete check instructions along with the B2P payment request
Solution reduces need for you to ensure payees are registered prior to payment initiation
*For Unregistered Payee, enrollment instructions can only be sent with a payment initiated using an address

22. Continue to evaluate your processes
“Electronify” Payments
Streamline Ordering Process
Automate Receipt of Invoices
Rationalize Suppliers
Analyze Payment Methods
This shouldn’t be viewed as a “one time” event or project. Continue to evaluate… what you implemented a few years ago might not work as well now, there may be newer and more advanced options available
Are you processing too much paper?
Are you utilizing your most valuable resources efficiently (FTE)?
Are you spending too much to process your accounts payable?
Are your current processes ‘Best in Class”? If not, work with your bank partner to achieve peak performance from your accounts payables.
Best-in-Class organizations establish periodic reviews of processes and strive for continual improvement. While an entire overhaul may be the right solution, realistically most businesses have to take things one step at a time. Our Treasury Management team at Wells Fargo can assist you with this this process.

23. Thank you