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Invoicing and Finance

Everything Procurement Should Know About Payments: Procurement’s Role and P2P Case Examples (Part 1) [PRO]

E-procurement is essentially what is sounds like. The same goes for e-invoicing, too. But when you add payments to the equation, things get messy.

Whether procurement and finance organizations are looking for an integrated procure-to-pay (P2P) solution or standalone invoice-to-pay (I2P) technology, the notion of either solution incorporating end-to-end payment and reconciliation capability is misleading at best. Granted, some providers, such as SAP Ariba and Coupa, have taken steps toward enabling the payment lifecycle through partnerships. But their payment solutions focus on the outcome rather than providing a broader toolbox around payment process management and reconciliation for buyers and suppliers alike.

How can these vendors, which deal predominantly in indirect goods, influence the total payment picture?

This Spend Matters PRO research series unearths the often misunderstood components of the “second P” in P2P. We start with a high-level overview of what procurement systems do (and do not) do today to enable payment processes, as well as what procurement’s responsibilities for payments are (and are not). We also profile what SAP Ariba and Coupa are enabling on the payments front, as well as the general approaches of other vendors.

Subsequent briefs in the series will provide a detailed summary of best-in-class e-procurement and e-invoicing native payment capability and integrations to enable payments, a detailed overview of the invoice to reconciliation process, an exploration of P2P and payments best practices, and guides for how to set up suppliers for payment in a system, the integration of cash management and payments, how to think about trade financing and payments, and the role of shared services in payments.

P2P and E-Invoicing Compliance: Spelling Out What TrustWeaver Does and Does Not Do [PRO]

Technology and solution providers typically deliver electronic invoicing (e-invoicing) compliance offerings as a component rather than the central focus of an overall procure-to-pay (P2P) or accounts payable automation solution. Few vendors focus squarely on compliance as the central value proposition of their offering. But one provider does offer invoicing compliance “as a service”: TrustWeaver. Yet TrustWeaver is “consumed” by organizations as an integrated component of third-party P2P and e-invoicing solutions rather than directly. This research brief explores precisely what TrustWeaver enables from a compliance perspective in its current summer 2017 offering. Also included are insights into additional TrustWeaver compliance capabilities that the provider plans to add during 2H 2017.

This brief provides checklists to understand specific areas of e-invoicing compliance centered on three areas: local laws and regulations, invoice processing and value-added services. In this context, it describes what localized e-invoicing compliance requirements TrustWeaver supports and those it does not support. In this brief, our goal is to help procurement and finance organizations understand what precisely a vendor means when it says it is a “TrustWeaver” partner — and what other steps they (or their solution partner) may need to take to ensure broader compliance requirements are met.

The Growth of E-Invoicing Compliance (Part 3): Buyer and Supplier Functional Checklists [PRO]

public procurement

Just what defines “compliant electronic invoicing” continues to be one of the least understood areas of procure-to-pay (P2P) solutions. One of the reasons for this is that many technology providers — not limited to just P2P providers but also accounts payable automation vendors — hawk compliance as if it were a bag of peanuts in the hand of a vendor at a baseball game. In reality, however, few single solutions even approach “full compliance” on a global, or even localized, basis.

The challenge for buyers of technology or managed services e-invoicing solutions is that when we address the topic of e-invoicing compliance, we’re talking about a complex barrel of goodies (the metaphorical equivalent of nuts, candy and fruit), not just a ballpark freshly roasted (or generically bagged) special. Further complicating the topic of e-invoicing compliance is that we must fully address both buyer- and supplier-led compliance depending on whether someone is on the issuing or receiving side of an invoice — the two are not the same.

This Spend Matters PRO research brief succinctly cuts to the chase (we hope!) of what a compliant solution must contain. It provides both a buyer and supplier diagnostic checklist to ascertain whether a provider is offering a compliant solution. Also see the first installment (E-Invoicing Compliance, Globally: Beyond TrustWeaver’s “Seal of Approval”) and second installment (The Growth of E-Invoicing Compliance: Exploring Vendor Capabilities and Approaches (Part 2) in this series.

The Growth of E-Invoicing Compliance: Exploring Vendor Capabilities and Approaches (Part 2) [PRO]

MBO Partners

In recent years, invoice-to-pay service providers have grown significantly, and there are now hundreds of them around the world. Some are truly local on an in-country basis. Others have a regional focus. And the largest tend to serve customers globally (albeit with partner support on a localized basis). We can even find service providers who handle just inbound invoices and others who can handle both inbound and outbound invoices.

This Spend Matters PRO research brief explores the solution scope and reach of e-invoicing providers today, including Coupa, Invocus (Zycus), GEP, SAP Ariba, Taulia and Tradeshift. Our approach is to cut through the noise to help companies to assess providers to determine the degree to which they fully support VAT, regulatory, statutory, data privacy and related compliance areas on a localized basis — beyond just partnering with TrustWeaver, alone. Provider insight is in part based on the information collected and analyzed as part of the Spend Matters Q2 2017 Invoice-to-Pay SolutionMap.

PRO Subscribers can also access the first installment of this series: E-Invoicing Compliance, Globally: Beyond TrustWeaver’s “Seal of Approval”

E-Invoicing Compliance, Globally: Beyond TrustWeaver’s “Seal of Approval” [PRO]

invoice

Just about every solution provider with an e-invoicing or procure-to-pay (P2P) solution talks about compliance in the invoice-to-pay — and sometimes order-to-cash — area. Many often use language that would suggest their “unique” approach is a source of competitive advantage when it comes to complying with local government regulations. But all too often providers are referring to just having a digital signature or signing capability (often in part or in whole outsourced or certified by a third party) for the purposes of proving authenticity and certification of origin. Beyond this, there are other forms of e-invoicing compliance, such as complying with local VAT requirements and the archiving of invoices for audit purposes (e.g., the number of years varies depending on the country).

But compliance is even more nuanced than just simply checking the box on one or more of these areas for a particular country, and just having an agreement with TrustWeaver does not mean it is fully compliant for a specific transaction scenario. Depending on how tightly one wants to define compliance, it is also necessary to meet not only inter-country requirements but also intra-country (and intra-regional) requirements. This includes scenarios in countries where a submitted e-invoice requires a previous clearance by tax administrations and where part of the regulation requires that additional attachments be added to transactional documents in the invoice-to-pay process, as is the case in some Latin American and Asian countries.

This Spend Matters PRO brief explores components of what true e-invoicing compliance is — or should be. It starts by taking a look at the basics, including what TrustWeaver certification provides vendors (and their customers) with. Yet our approach is not just to address the basics, even though they are important. Rather, we take aim at the myth of vendor e-invoicing compliance that permeates the market today and what a broader definition and approach to compliance should encompass. The second installment in this brief will explore what specific steps vendors such as SAP Ariba, Coupa, Taulia, Tradeshift and others are doing beyond the norm to provide compliant solutions for trading partners.

What is Your Invoice-to-Pay Persona? Understand Your Requirements and Mass Customize Your Vendor Shortlist [PRO]

e-invoicing

No two accounts payable, finance or shared services organizations are alike (or procurement departments, for that matter). Each has its own persona that reflects not only its own value proposition and engagement approach but also the stakeholders it serves — and its supply base. The same principle holds true of procure-to-pay (P2P) application providers. Each has a persona that reflects its value proposition, solution strategy and targeted customer segments. Therefore, finance and procurement organizations should seek providers whose personas best align to theirs. In other words, there is no “magic” solution provider, and finding the right fit is critical, because a P2P application represents the main interface for most of procurement’s internal customers.

To that end, we are excited to preview our approach to Spend Matters SolutionMapTM, a comparative analytical framework for practitioners to evaluate relevant solutions to meet their accounts payable, working capital and procurement needs. Our SolutionMap initiative depicts vendor rankings based on specific buyer personas to reflect the unique value proposition, solution strategy and customer segments served by a vendor. Participating vendors are scored both on their solution as well as on customer value, based on in-depth tech reviews (including live demos) by the Spend Matters analyst team and aggregated direct customer input from surveys. Each SolutionMap is updated quarterly rather than in 12-month (or longer) cycles, to accurately reflect the pace of market developments.

As part of our Spend Matters SolutionMap vendor comparison ranking for invoice-to-pay and procure-to-pay solutions (publishing next week, with subsequent quarterly updates), the Spend Matters analyst team has dedicated considerable time to developing the unique organizational “personas” that we’ve most often seen in our decades of experience working with procurement organizations. We have used these personas to weight the requirements that we used in solution scoring, which includes customer satisfaction scoring by solution customers. Having collected feedback from hundreds of invoice-to-pay users, vendors and consultants in recent months as part of our SolutionMap research, we see these personas as useful starting points for procurement organizations to classify themselves before looking at solution rankings of providers in the market.

This Spend Matters PRO analysis shares six of the most common customer personas in invoice-to-pay buying needs. Aimed at practitioners as well as vendors and the consultants advising them, this research brief will be helpful to drive the type of “mass customization” of procure-to-pay solutions needed to meet specific organizational needs.

Below, we present our six personas for invoice-to-pay. For each, we include: full definitions, typical organizational priorities (based on each persona), functional/solution and customer value emphasis and recommended selection processes. Comparative vendor rankings will be published for each persona next week on Spend Matters (and updated quarterly).

Procurement is from Mars and Finance is from Jupiter: How to Align Planets [Plus +]

finance

Mars might be the god of war and mighty in its own right – ready to battle any time with a combative supplier or recalcitrant internal stakeholder. But Jupiter is the king of gods: large, distant, cold, foreboding. (There is no Venus here...that's a Plus brief — nay, multipart series — for another day on working with Marketing). These gods might seem similar, and in the business world, Procurement and Finance should in theory be highly aligned and focused on cost management, risk mitigation, quantitative analysis, and other areas. For example:

  • Enterprise risk management requirements (e.g., fraud, regulatory compliance, etc.) should extend seamlessly into the supply base.
  • Working capital should be optimized alongside cost reduction and compliance.
  • The Source-to-Settle process should have an embedded P2P process that aligns purchasing and AP to each other and to broader spend category requirements.
There are many things that keep the two groups from singing Kumbaya. In this Spend Matters Plus brief, we list five important ones and give practitioners some suggestions on how to align and conquer (no lightning bolts or Holst necessary).

Basware: Vendor Snapshot (Part 2) — Product Strengths & Weaknesses [PRO]

e-invoicing

Basware, a Nordic procure-to-pay (P2P) provider that until recently pursued a conservative global growth strategy, is not as well known outside its customer base for its set of differentiated and robust capabilities, especially in the AP automation, e-invoicing and supplier network areas. Most recently, through its acquisition of Verian, it added sufficient e-procurement capability to compete against other best-in-class purchasing technology providers (previously, its cloud-based Alusta platform, which forms the basis of its AP automation and invoicing capability today, was not competitive in the e-procurement market against specialized providers). In the trade financing area, we have applauded Basware in the past for taking a highly strategic approach, in partnership with Arrowgrass, to both payables and receivables financing (yet as with most competitive providers, execution in both areas has been slow to date).

Above all, the differentiated capabilities of Basware’s solutions are not well known because the company has underinvested in global marketing efforts. Moreover, at least until recently, Basware has lacked a common theme or rallying cry (e.g., Coupa’s “value as a service”) to unite both its own organization, and partners and customers.

This Spend Matters PRO vendor snapshot explores Basware’s strengths and weaknesses in the P2P, supplier network and trade financing areas, providing facts and expert analysis to help organizations decide if they should shortlist the vendor as a potential provider. Part 1 of our analysis comprised a company and detailed solution overview and a SWOT analysis, as well as a summary recommended fit suggestion for what types of organizations should consider Basware. The remaining parts of this multipart series will offer a user selection guide, user interface (UI/UX) analysis, competitive alternatives and evaluation and selection considerations.

Basware: Vendor Snapshot (Part 1) — Background & Solution Overview [PRO]

finance

Basware is one of the largest technology providers in the global procurement and accounts payable technology market. Founded in 1985 in Espoo, Finland as Baltic Accounting Systems to deliver enterprise finance software solutions, the company (which has been public since 2000 and is traded on the NASDAQ OMX Helsinki Ltd. as BAS1V) has grown from a small country player to a global platform that does over 143.4M Euros annually (2015) with its client base of over 2,500 international P2P customers that collectively do business with over 1 million companies in over 100 countries.

The numbers do not tell the full Basware story, however — nor do the firm’s higher-level marketing efforts, which in turn do not get at the level of nuance, and capability, of its often deep and clever P2P solutions. Sure, the company manages one of the largest e-invoicing and B2B commerce networks, and supports its global customer base through its operational footprint that spans over 50 countries on six continents and includes over 100 partners and resellers. Yet while Basware may look to be doing well on paper, it has even greater potential if it can execute more successfully on a commercial basis in the coming years, including maximizing the Verian asset and it’s cheeky “WeProcurement” positioning around its e-procurement offering. For more on the Verian acquisition, see our first take and market analysis, competitive and customer implications, and solution comparison and integration strategy analysis.

This Spend Matters PRO Vendor Snapshot explores Basware’s P2P and network capabilities, including strengths and weaknesses in the market, providing facts and expert analysis to help procurement organizations decide if they should shortlist the vendor. Part 1 of our analysis provides a company and detailed solution overview and a SWOT analysis, as well as a summary recommended fit suggestion for what types of organizations should consider Basware. The remaining parts of this multipart series will offer a user selection guide, user interface (UI/UX) analysis, competitive alternatives and evaluation and selection considerations.

E-Invoicing Market Outlook 2016-2018: 10 Technology and Mega Trends (Part 1) [PRO]

technology maturity model

With apologies to Hollywood and those behind a recent Oscar winning film, E-Invoicing is a market undergoing radical transformation from both the inside (and) out. A combination of disruptive new technology models that go far beyond first generation supplier networks and evolving market and customer requirements (and expectations) are in the early process of taking a sleepy accounts payable-centric solution area and putting it front and center as an enabler of broader procurement, finance, supply chain and IT strategies. Spend Matters research and analysis based on interviews with a variety of solution providers, practitioners and consultants indicates the largest visible changes will take shape in the years ahead. This multipart Spend Matters PRO brief provides an e-invoicing outlook and forecast for 2016-2018. Included in this series are 10 technology and mega trends, a market forecast and sizing analysis, market growth and adoption scenarios and a look at the evolving competitive landscape and vendor shortlists, including how e-invoicing will increasingly intersect with supplier networks, invoice discounting, transactional analytics (procurement, A/P, payments), statement/invoice audit recovery and related market segments. For organizations looking to get started with the e-invoicing basics – or accelerate program adoption – we recommend starting with the PRO series E-Invoicing: What it Takes to Get to World Class (see Part 1 and Part 2).

Arrowgrass Acquires Oxygen Finance: Company Update and Solution Analysis (Part 1) [PRO]

In February, Arrowgrass Capital Partners, a London-based asset manager, announced it acquired Oxygen Finance. The acquisition is curious, in part because of the existing Arrowgrass and Basware partnership and Oxygen’s unique model, which we explore in this analysis. Oxygen currently has “billions of pounds” flowing through its infrastructure annually, primarily from U.K.-based public sector clients, yet it is not a P2P or e-invoicing vendor like most other providers focusing on discounting. Nor is it like C2F0, which focuses on creating loosely coupled — from a transactional systems perspective — competitive markets that provide greater flexibility to suppliers around participation compared with Oxygen. This multipart Spend Matters PRO brief delves into the Oxygen Finance solution in detail and explores a number of questions that Oxygen and the acquisition raise. These include whether or not the deal signals that additional private funds are likely to make more investments and buyouts in the sector. (Note Zouk investing in Taulia recently.) More important for users, we provide our analysis of the Oxygen Finance model, which is theoretically based broadly on a closed loop buyer network with its suppliers, and whether it might be able to gain the same type of discount scale and supplier adoption that new e-invoicing led trade financing models of the sort Taulia is bringing to market with its SCF+ are hoping to achieve through an alternative means. Finally, we analyze the days payable outstanding (DPO) and working capital impact Oxygen can have in comparison to alternative approaches — and why the public sector appears the most fertile ground for the solution approach.

Partnerships, SCF+ and More: Taulia’s Crossroads (Part 2) [PRO]

crossroads

In the first installment in this series, we provided our own recent history lesson on Taulia and how it got to where it is today — and the crossroads it currently faces from a strategy perspective. As we wrap up our Spend Matters PRO update on Taulia, we explore a number of specific areas of its business today, including a deep dive into its SCF+ offering, a tech-enabled and simplified approach to reverse factoring for the long-tail supplier masses instead of just large vendors. We also explore how Taulia is currently positioning itself today as it engages customers and how, on many levels, its core offering is a Trojan horse for what it really wants to sell with partners (but why that foot in the door with procurement, IT, accounts payable and treasury is an important as a first step and how these different worlds are converging). Granted, it would be easy — and not incorrect — to observe that the broader e-procurement market and purchase-to-pay (P2P) market remains distinctive from Taulia’s core sector today. Yet going forward, one can make the case that the worlds of generic (indirect) and category-specific buying, transactions, financing and payment will come together. And this is where understanding Taulia's emerging strategy matters.