AP Invoicing Service
May 18th, 2015
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Mission and Vision
Mission
Develop a new service team responsible for the intake and processing of
vendor invoices on behalf of the campus departments.
Vision
1) All Purchase Order invoices are delivered to a single location
2) The new service team provides scanning, data entry, and quality
assurance for invoice payments
3) Two-way matching reduces the need for Fiscal Officers to approve
low value invoices
4) Departments can easily retrieve invoice payment status and request
assistance with payment disputes
5) High-volume and high-spend vendors are transitioned to strategic
invoicing methods, payment terms, and settlement options
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Why Now?
Invoicing over the last 12 months (March ‘14 thru Feb ’15)
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10,500 invoices processed by campus departments each month
8,482 unique vendors
555 different initiators within the financial system
37.5 days from Invoice Date to date payment request is entered
2.5 days from when payment is entered to full approval
37% of invoices are paid late, according to invoice terms
3% of our invoices have early payment discount terms
0.3% of vendors have default discount terms established
Top 50 Vendors (by volume)
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58,033 invoices (45%)
$34,307,000 in spend (8%)
Potential early payment discounts (1%): $343,070
Total early payment discounts captured over last 12 months: $23,447
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Why 2-way matching?
Spend to Volume Table
Invoice Volume
Count
Less than $500
% of Total
Invoice Spend
Spend
% of Total
83,748
64.2% $
11,949,748
14,833
11.4% $
10,550,694
13,738
10.5% $
21,757,426
7,757
5.9% $
27,605,372
$5,000 - 9,999
4,293
3.3% $
30,149,719
7.5%
$10,000 - 20,000
2,697
2.1% $
37,469,405
9.3%
3,337
2.6% $
264,216,935
82% 65.4%
130,403
100.0% $
403,699,298
100.0%
$500 - $999
76%
$1,000 - 2499
$2,500 - 4,999
> than $20,000
Totals
92%
8%
3.0%
6%
2.6%
5.4%
18%
6.8%
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Why Now?
“Cultivate a Culture of Organizational Excellence,
Effectiveness and Stewardship” – Chancellor’s Vision Plan
Top Reasons:
1. Reduce overall workload for campus departments
2. Reduce errors through better quality control of invoice
data
3. Increase discount capture rate and potential revenues
through strategic settlement options
4. Provide single channel of communication for vendors
and reduce fraud
5. Better alignment with best practices and procedures
implemented by other Universities
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Our Approach
Phase 1: Information Gathering (January to July)
• Develop a partnership between Accounts Payable, Contracting Services,
and Shared Services Center
• Solicit campus feedback and input into processes, visit other UCs to
learn best practices, and identify stakeholder concerns
• Develop process flows, staffing requirements, and system changes
• Establish the Strategic Vendor Management team and new menu of
payment terms
Phase 2: Pilot, Measure, Report (July to January)
• Service team to begin processing invoices on behalf of units already
supported by the Shared Services Center
• Implement and monitor 2-way matching workflow changes
• Identify and measure key performance indicators (KPIs), comparing
service team to the rest of campus invoice processing
• Revise processes as necessary during the pilot
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Our Approach
Phase 3: Academic Pilot (January ‘16 to July)
• Service team to begin processing invoices on behalf of academic units
willing to participate as early adopters
• Revise process flows to accommodate specialized academic needs,
such as Uniform Guidance requirements
• Continue to measure KPIs, including error rate and number of
disputes due to 2-way matching
• Measure increased discount capture rates due to efforts of the
Strategic Vendor Management team
• Gauge readiness of service team to take on balance of campus
invoices
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Questions / Comments
Project Contacts:
Mike Kuhner
Manager, Central AP/Travel
[email protected]
Megan Villasenor
Operations Manager, SSC
[email protected]
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