Indianapolis Power

1
Indianapolis Power Light CompanyAccounts
Payable transformation process

• NAPP Conference
• February 12, 2008

2
Agenda

• Introductions
• Maggie Bond, CPA
• Kym Stone, CAPP
• IPL Snapshot
• Invoice Approvals
• AP Best Practices
• AP Action Plans
• Working Examples
• AP Priorities
• Automation Opportunities
• Questions?

3
IPL A Snapshot

• Indianapolis Power Light Company (IPL)
• has nearly 1,500 employees
• provides electric service to approximately
  470,000 customers
• has a service territory of 528 square miles
• owns and operates three primarily coal-fired
  generating plants and a separate combustion
  turbine, with a total generating capacity of
  3,400 megawatts (MW)

4
IPL A Snapshot cont.

• IPLs parent company, AES, is a global power
  company, generating and distributing electric
  power for millions of people in 26 countries on
  five continents.

5
Invoice Approvals Then Vs Now

• In the year 2000
• AP Invoices
• Mailed out to individual users for signature
• 7 Invoice Auditors spread over 4 locations
• -Standard Practice-

6
Invoice Approvals cont. Then Vs Now

• In the year 2007
• AP Invoices
• All Invoices received by AP department, entered
  into Oracle ERP
• 5 Invoice Auditors, 2 locations
• -BEST Practice-

7
Journey to Success

• In 2004, a collaborative initiative began and
  prompted the successful start of an AP Best
  Practices Journey
• Identified Shortfalls
• Inconsistent processing
• Petty cash reimbursements Vs Expense Reports
• Undocumented transactions inconsistent ERP
  recordings

8
Journey to Success cont.

• Established industry recognized AP Procedures to
  remedy
• number of overall quick checks being issued daily
• the lack of resources and underutilization of
  summary billing
• underutilization of purchasing cards

9
Action Planning

• Created Play-scripts to aid Invoice Auditors
• Step by step guide for the varied types of
  invoice processing
• Created and Published a Preferred Methods of
  Procurement document
• A simple, yet effective, tool for end-users to
  follow approved methods of payment for
  wide-ranging expenditures
• Published on company wide intranet portal

10
Preferred Methods of Procurement example
11
Action Planning cont.

• Problem Inefficient Invoice Processing
• Action All invoices mailed directly to AP
• Benefits Easier for Vendors and Users, and
  ensured an average of 81 of available discounts
  to be taken
• Logical Best Practices Taken
• Invoices entered into ERP upon receiving
• Reduced non value-added work
• Created an internal cross training and work
  rotation procedure

12
Action Planning cont.

• Substituted petty cash reimbursements for expense
  reports
• Reduced quick check writing by 90
• Increased Purchasing Card transactions by 27
• Reduced 5,000 Invoices
• Began scanning each invoice and attaching in ERP
• Created better and more efficient visibility for
  both research audit

13
Action Planning cont.

• Further Measures Implemented
• Utilized recurring Invoice feature in Oracle to
  eliminate processing monthly invoice
• Processed all 1099s using Oracle instead of
  outdated mainframe
• Implemented onsite check processing in a single
  location
• Implemented RAPP (Resolution Accounts Payable
  Purchasing)

14
Revenew InternationalAP Compliance Audit

• Primary objective was to access the adequacy of
  AP systems and controls
• 3 Year Time Period
• Selected 99K invoices with total spend of 700M
• Results concluded 13 payment claims recovering
  40K (

15
Working Example Meade

• Objective
• To reduce the number of invoices received and
  processed.
• Streamline the processes
• Past process was extremely labor intensive
  cumbersome for AP and end users

16
Working Example Meade cont.

• Action Item
• Move contracts from standard purchase orders to
  Blanket PO
• Establish work categories and required
  information. (8 categories identified)
• Generate a Blanket PO for each category of work
• Estimate monthly dollars by category for releases
• Develop an invoice coversheet backup process

17
Working Example Meade cont.

• Before
• Monthly
• 165 POs
• 1,250 Line Items
• 176 Invoices
• After
• Monthly
• 8 Blanket Releases
• 8 Line Items
• 29 Invoices

18
Working Example Meade cont.

• Currently
• All of Meade Electric multi-unit contracts have
  been set up.
• 8 trenching multi-unit contracts were created.
• Next Steps
• Obtain invoices electronically.
• Provide invoice information in an Excel
  spreadsheet so electronic uploading is possible.

19
AP Priorities

• Manage continuous improvement in order to
  maximize effectiveness
• Process 80 of payments using EFT
• Perform Cash Recovery In-House
• Allow end users to enter requests for checks
  online
• Improve efficiencies by scanning invoice
  documents prior to invoice entry
• Metric (less processing time)

20
Automation Opportunities

• Implement ERS
• Designed for high volume inventory transactions
• Purchasing Card Transaction Management
• Provide transaction history in financial module
• Improve efficiencies by scanning invoice prior to
  entry into Oracle
• Use data loader for summary billing invoices

21
(No Transcript)
22
Indianapolis Power Light CompanyAccounts
Payable transformation process

• NAPP Conference
• February 12, 2008