Transcript PPL Services Corp. Corporate Disbursements Controls

18th Annual Forum
IAPP
San Diego, CA
Workshop #610
Accounts Payable’s Role in e-Commerce
Jeff Joseph, CAPP, CPCP
PPL Services Corp.
Manager-Accounts Payable
[email protected]
Tim McKee
Account Executive
Enporion, Inc.
[email protected]
Accounts Payable’s Role in e-Commerce
Overview
•Who is PPL?
•PPL’s electronic invoice process prior to partnering with Enporion
•Who is Enporion?
•Services provided by Enporion
•How Purchasing headed the initiative of growing electronic invoicing
•How Enporion helped PPL to reach their goals
•How PPL went about gaining supplier participation
•Single invoice interface from PPL to Enporion
•The results
•Payment terms
•Electronic invoicing for services
•Integrated Cash System (ICS)
Accounts Payable’s Role in e-Commerce
Who is PPL?
FORTUNE 500® global energy holding company.
Headquarters: Allentown, Pa.
PPL Corporation includes:
PPL Generation LLC
PPL EnergyPlus LLC
PPL Electric Utilities Corp.
PPL Gas Utilities Corp.
PPL Services Corp.
Accounts Payable’s Role in e-Commerce
PPL Generation
This business line controls more than 11,000 megawatts in the United States. Its
portfolio includes power plants in Connecticut, Illinois, Maine, Montana, New York and
Pennsylvania.
Our power plants are low cost, use multiple fuels (coal, natural gas, oil, uranium and
water) and are strategically located to provide PPL access to various markets.
PPL EnergyPlus
One of the leading suppliers of competitively priced electricity and energy services in
the mid-Atlantic region. The company sells wholesale and retail electricity in key U.S.
states.
PPL Electric Utilities
The electric delivery business line serves 1.4 million customers in Pennsylvania.
PPL Gas Utilities
PPL is the local natural gas delivery company for about 75,000 homes or businesses
in 34 counties of Pennsylvania and a small part of Maryland. In the past, you’ve known us
as PFG Gas or North Penn Gas. Now we are PPL Gas Utilities.
PPL Services
Providing shared services to PPL’s business lines.
Accounts Payable’s Role in e-Commerce
PPL’s electronic invoice process
prior to partnering with Enporion
2004
Traditional EDI
5,700 invoices (7%)
Web Entry
40 invoices (less than 1%)
Paper
77,000 invoices (93%)
Accounts Payable’s Role in e-Commerce
Who is Enporion?
Accounts Payable’s Role in e-Commerce
How Purchasing headed the initiative
of growing electronic invoicing
The Purchasing Department used Enporion for
their eCommerce market place for purchasing
related activity.
The next step was to complete the eCommerce
circle by enabling suppliers to use electronic
invoices.
Accounts Payable’s Role in e-Commerce
What is a successful e-invoice program?
• Provides process efficiencies
– Less paper = Less data entry
– Reduction in time spent dealing with errors & issues
• Enables data visibility
– Internal
– External via Remittance Advice & Payment Status
• Is supplier focused
– Flexible connection options
– Easily implementable
• Pays for itself
– Hard $ = Early Pay Discounts
– Soft $ = Quantifiable process savings
Accounts Payable’s Role in e-Commerce
What are the key ingredients?
• Preparation
– Identify the transactions to be automated
•
•
•
•
Purchase Order
Change Order/Purchase Order Response
Invoice
Remittance Advice/Payment Status
– Create a Requirements Documents that can be
shared with suppliers
– The supplier interface should validate your
business requirements up front
• Automatic notification generated for suppliers
submitting non-compliant transactions
Accounts Payable’s Role in e-Commerce
What are the key ingredients?
• Teamwork
– A.P. & Purchasing must work together on
implementation
• Purchasing owns the supplier relationship
• Purchasing owns content on the front end
– Keep the lines of communication open through
the entire process
– Set joint goals & objectives tied to program
success
Accounts Payable’s Role in e-Commerce
What are the key ingredients?
• Teamwork (Part 2)
– The primary beneficiary of process efficiencies is
AP so be sure to spell out the benefits for
Purchasing
•
•
•
•
Improved supplier relations
Increased leverage in negotiations
Less time consumed investigating errors & issues
Reduced Soft Costs:
– Cost of paper PO = $30
– Cost of electronic PO = $13
Accounts Payable’s Role in e-Commerce
What are the key ingredients?
• Supplier Adoption!!!!!
– Provide suppliers with easy access to the tools they will
need to fully participate
• Supplier Enablement Portal
– Self Registration/Requirements Documents/Training Materials
– Provide options for connecting
• EDI/XML
• Email/Web Interface
– Make it easy
• Very little key entry via PO Flip
– Identify the supplier value proposition up front
• Increase in on-time payments
• Increase in early pay
• They are making their customer happy
Accounts Payable’s Role in e-Commerce
Single invoice interface from PPL to Enporion
Order Manager (PO flip) creates a XML file that
is sent to PPL
The Integrated option allows suppliers to send
files in multiple formats to Enporion. Enporion
converts the files to XML.
PPL manages one interface from Enporion in
one format rather than many files from many
suppliers like traditional EDI.
Accounts Payable’s Role in e-Commerce
The Results
2007
Enporion
25,000 invoices (30%) up from 7% in 2004
Paper
58,000 invoices (70%) down from 93% in 2004
Percent
PO Invoices - Percent Electronic
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
1
2
3
4
5
6
7
8
9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29
Month
2008 – currently over 40%
Accounts Payable’s Role in e-Commerce
Payment Terms
Electronic invoicing decreases the cycle process
time from vendor to the A/P system.
Supplier (1 day)
Supplier (1 day)
US Mail (3 days)
Enporion (1 day)
Scanning (1 day)
Entry (0 days)
A/P Entry (5 days)
2 DAYS
10+ DAYS
Now buyers can negotiate
discount payment terms creating
extra income for PPL.
Accounts Payable’s Role in e-Commerce
Electronic invoicing for services
So far, electronic invoices have been for material orders that do not
require paper invoice documentation since the approval is based on the
matching process for price and quantity.
What next’s? Electronic invoices for services.
Contractors will enter their invoices using Enporion’s Order Manager
website, but will also attach a document of the invoice or other required
supporting documentation.
PPL will receive the file and turn the attachment into an image which
will be indexed to the voucher that is created. The voucher will be
approved in PPL’s workflow process.
PPL’s Next Step is to Fully Integrate the Physical &
Financial Supply Chains
• One “version of the truth” facilitated by an independent marketplace
• Elimination of company maintained contract managers, procurement systems, etc.
Information
Information
Supply Chain Hub
Shipping/
Receiving
Financial
Obligation
Financial Settlement
Information
Information
Contract/
Order
Transaction Initiation
Product/
Service
Transaction Initiation
Seller
Buyer
Bank
The Ultimate Solution: The Settlement Hub
Payment obligations
processed within various
front-office silos
Create back-office “hay
piles” – i.e. siloed data
bases and settlement
instructions
SILOS – The Traditional Back-Office Settlement Model
Goods & Services Payments
Payroll
With Treasurers manually
”bailing the hay” to create:
•Patchwork corporate data
bases
•Last minute cash
forecasts & disbursements
•Multiple settlement
processes & related
controls
Treasurer
Interest & Dividends
Accounts Payable’s Role in e-Commerce
Integrated Cash System (ICS)
Enporion and PPL have partnered to build a settlement hub
that will be used by the Treasury Department to integrate to
all PPL front office systems to manage receipts/receivables
and disbursements/payables.
A detailed picture of PPL’s planned Settlement Hub looks like this:
Legend:
Investor
Activities
Employee
Activities
Interest/
Dividends,
etc.
Payroll
Payables
Invoices &
Receivables
Payables/
Receivables
Invoices
Other
Payables/
Receivables
Treasury Back Office
"E" Commerce
Data
Receivables/
Payables
Paper Invoices
Check Remittances
U.S. Post Office
Settled
Electronic
Bills
Receipts/
Disbursements
Wires/ACHs
Digital
Mailroom
Paper Bills
Electronic
Receipts
Vendor
Payables
Checks
Electronic
Invoices
Other PPL
Front Offices
Payables
Electronic Invoices
Electronic Receipts
External
Material/
Service
Supplier
Activities
Payables
Front Office
Treasury Back Office
Bank
Including
ARC
Deposits
Questions
???