# Presentation: 161822

## Customer Advisory Board Meeting  

**Customer Advisory Board Meeting**** **** **
**April 4, 2008**

## Agenda

**Agenda**

- Introduction
- Business Problem
- The Internet Payment Platform
- Benefits to Agencies
- IPP Considerations
- The IPP Team
- Next Steps
- Contacts

## Introduction

**Introduction**

- Brett Smith
- Financial Management Service (FMS)
- Program Manager
- Teresa Ricoy
- Federal Reserve Bank of Boston (FRBB)
- Business Analyst

## IPP Primary Goals:

- Transform time-consuming paper-based system into streamlined electronic process
- Support digital file exchange between agencies and their suppliers
- Expedite invoice approvals with central online workflow
- Reinforce agency compliance with the Prompt Pay Rule
- Improve agency supplier relationships

**Notes:**
The IPP primary goals is to:
Eliminates time-consuming and expensive paper-based processes 
Expedites approvals by routing invoices automatically 
Improves communications and discount opportunities with suppliers 

## Business Problem

**Order-to-Pay is Paper, People, and Time-Intensive**
- Expensive to process paper
- It can take agencies weeks or months to process a vendor payment
- Agencies (and FMS) field many phone and e-mail inquiries from payees asking for more payment-related information

**Notes:**
The IPP:
Eliminates time-consuming and expensive paper-based processes 
Expedites approvals by routing invoices automatically 
Improves communications and discount opportunities with suppliers 

## Pressure on agencies to modernize financial management systems and processes
President’s Management Agenda
Process standardization efforts gaining traction 
Financial Management LOB

- Pressure on agencies to modernize financial management systems and processes
- President’s Management Agenda
- Process standardization efforts gaining traction
- Financial Management LOB

**Business Problem (Cont’d)**

## Business Problem (Cont’d)

**The Order-to-Pay Cycle is “Stove-piped”**

**Agency Procurement**** Systems**

**Supplier Invoicing****Systems**

**US Treasury ****Disbursement Systems**

**Agency Payables****Systems**

- Multiple financial systems
- do not share related data

**Notes:**
Agencies that invest in ERP solutions to meet their enterprise needs often face difficulty in shifting from the stovepiped processes to the enterprise processes that underlie the ERP concept. 

Under the ERP concept, it does not matter whether an individual is in budget, accounting, procurement, or any other organizational component; 

## Is a Web-based payment information service provided by the Financial Management Service at no charge to Federal government agencies
Centralizes purchase order, invoice, and proprietary information on Treasury payments for transparency to agencies and suppliers
Allows federal agencies and their suppliers to eliminate paper for order-to-pay transactions
Aggregates suppliers across multiple Government agencies

- Centralizes purchase order, invoice, and proprietary information on Treasury payments for transparency to agencies and suppliers
- Allows federal agencies and their suppliers to eliminate paper for order-to-pay transactions
- Aggregates suppliers across multiple Government agencies

**The Internet Payment Platform**

**Notes:**

1. The Internet Payment Platform (IPP) is a comprehensive payment information service made available to all Federal agencies and their suppliers by the US Department of the Treasury’s Financial Management Service (FMS).  The service is available at no charge to agencies and suppliers.

2. The Internet Payment Platform provides a centralized location to view all transactions in the purchase-to-pay process. The IPP transforms paper-based processes into an electronic process for both Federal agencies and their suppliers. 

3. IPP allows agencies and their suppliers to eliminate paper based transactions. 
4. Using a centralized directory to facilitate supplier enrollment– deploy a vendor once to transact with all IPP participating agencies

## What the IPP Is...

- NOT a replacement for an Agency ERP System
- NOT a replacement for an Agency Procurement or Accounts Payable (A/P) platform
- NOT the system of record for a business transaction
- NOT a payment certification system
- NOT a system for agencies to make payments to suppliers

**Notes:**
IPP is not a 
 The IPP facilitates the display and exchange of data between agency financial systems and supplier partners

The IPP facilitates the display and exchange of data between agency procurement or account payable systems

3.The system of record for purchase orders, contracts, invoices or payment requests CHECK 
The IPP will house and display information related to data contained within the financial systems operated by Federal agencies, suppliers and FMS

4. A payment certification system
The IPP does not replace or replicate any payment certification processes.  Agencies will continue to use FMS’ Secure Payments System (SPS) for all payment certifications
5. A new system for agencies to make payments to suppliers
The IPP imports payment files directly from FMS’ current payments system.  Agencies will continue to create and submit payment schedule files directly to FMS

## IPP

- _[Workflow](slide16.xml)_

**Agency ERP**
**Purchasing**

- Purchase Orders (w/updates)

- Vendor
- (Ordering
- System)

- Vendor
- (Invoicing System)

- Vendor
- (A/R System)

- Invoices

**Agency ERP**
**A/P**

- Invoices

- Invoice Status

**Treasury Regional Operations**

- Payment Request

- Payment Information

**Vendor’s Bank**

- Payment Information

- POs

- Account Reconciliation

- ACH

- 1

- 2

- 3

- 4

- 5

- 6

- 7

- 8

- 9

- Acks &  ASNs

**Workflow**

**IPP**

**Web Display**

**IPP*** ***Information Flow Overview**

**  ****ACK is purchase order acknowledgement by Supplier**
**  ****ASN is an advanced shipping notice **

*****

*****

*****

**Notes:**
The original PO comes from your ERP system to display in the IPP so that you suppliers can it electronically.
Your suppliers can download the PO to their systems as we can see in number two. 
Once your suppliers views your PO they can send you a Acknowledgement that they received your PO. They can also, send you  send an advance shipping notice. 
Once the PO is processed you supplier can “flip” a PO to an invoice by just clicking a button and the only data entry they need to do is write the invoice number, which come from their system.
 The agency can send Invoice status to the IPP enabling your suppliers to obtain more information about the invoice status. Before moving to number 6 I like to talk a little about our Workflow Modular. The approval process of an invoice can be done electronically through IPP and then send that information to your ERP.   
Once the Invoice is approved, either through IPP or your own system, the request for payment is now in process. What is you current payment process?
After the request for payment is made through the Treasury, will send a copy of the payment information to the IPP. This of course is an opportunity for your suppliers to know what exactly they will receive in their bank account. In this particular case, it is helpful for the suppliers to find out if they payment has been cancelled, reduces or offset. And detail information will be available only to the suppliers not particularly to the agency. 
The payment is made to the suppliers bank account. 
The payment information will be web display and can be downloaded to the Suppliers A/R system
 At the end of the process, number 10, the suppliers A/R office can conciliate with what they received to what they billed. 

## What the IPP Is

**What the IPP Is**

**6. EFT Payment**

**5. Treasury Disbursement **

**4. Invoice Approval**

**3. Goods Receipt**

**2. Supplier Invoice**

**1. Purchase Order**

**Visibility into all data in the Order-to-Pay cycle**

## How Does the IPP Benefit Agencies? 

- The IPP is an opportunity for agencies to streamline
- processes and eliminate time consuming inefficiencies

**Streamlined**** ****Processes**

**Reduction in Paper-Based Expenses**

**Improved Vendor Relations**

**Time-Saving Systems**

**Primary Agency Benefits**

- Improves purchase order and invoice flows through electronic automation

- Provides a new channel for electronic presentment of POs and invoices, reducing expenses associated with paper and postage

- Improves supplier / merchant  relations by reducing late payments and providing for discount opportunities

- Minimizes agency time spent responding to payment-related email and phone inquiries through vendor self-help over the Web

**Notes:**
Benefits include the following:
Save in Processing Costs View transactions on-line to eliminate the costs of issuing and mailing paper purchase orders and routing invoices.
Flexible Workflow for Expedite ApprovalsRoute and approve invoices online to cut down on the time needed to send and receive copies of invoices to and from authorized approvers. 
Manage Prompt Pay RulesUse automated notification alerts, escalation strategies, and online reports to make sure that invoices are approved and paid according to Federal Prompt Pay guidelines.
Increase the Efficiency of TransactionsEncourage suppliers to convert to EFT and a paperless invoice and payments processing environment to improve agency process efficiency.
IPP Solutions Are Available At No ChargeTransform purchase order and approval processes without the high costs associated with solutions offered by commercial vendors. 

## IPP Considerations

- IPP is implemented in a modular fashion
- Leverage existing Agency investments in financial systems
- Opportunity for incremental transformation
- Select services appropriate to an Agency’s needs:
- Electronic purchase order delivery to suppliers
- Electronic invoice submission from suppliers
- Invoice routing for on-line approval (Workflow)
- Discount management
- Payment and adjustment reporting
- Email notification options

**Notes:**
1. The IPP’s modular design allows agencies to select and implement the specific services most appropriate to their business needs, with the option of adding additional features in the future.
2.  Features Include:
Enabling electronic purchase order delivery  to registered suppliers 
Receiving electronic invoices from suppliers 
Routing invoices automatically for expedited online approvals 
Capitalizing on discount opportunities offered by suppliers 
Viewing reports on Treasury payments 
Using a centralized directory to facilitate supplier enrollment– suppliers enrolled by one agency can transact with all IPP agencies 
Selecting from a wealth of email notification options 

## IPP Considerations (Cont’d)

- Endorsed as part of the FMLOB’s Standard Payment Process
- Payment Management Work Group
- Encourage use of Government Off The Shelf (GOTS)
- Interfaces with all major financial systems (Oracle, SAP, Momentum, etc.)
- File-based system interaction
- Downstream from Procurement process
- IPP accepts and delivers only approved Purchase Orders

## IPP Considerations (Cont’d)

- Process of making payment request from Treasury stays the same as today
- Certification in SPS
- Focus on “Type B” payments in first release
- Opportunity to transform and streamline existing business processes
- IPP live in production as of in November 19, 2007
- Working with agencies now for initial implementation
- Agency implementation takes 4 – 6 months

## The IPP Team

**The IPP Team**

- FMS owns and manages the IPP service
- The Federal Reserve Bank of Boston (FRBB) develops, operates and maintains the IPP
- FMS and FRBB will support agency implementation and supplier outreach activities at no charge

**Notes:**
Before: 	assist agency staff
During: 	manage campaign and enroll suppliers
After: 	provide support

## Next Steps

- To start the implementation process:
- Schedule an Onsite Information Session
- Sign an Agency Participation Agreement
- Name an Executive Sponsor and a Project Manager
-  Initiate project(s)
- For more information go to _www.ipp.gov_

## Contacts

**Contacts**

**Please forward questions and comments to:**
**Brett Smith**, Financial Management Service
- _Brett.Smith__[@fms.treas.gov](mailto:Alexander.Dashevsky@fms.treas.gov)__ _
- (202) 874-6666
**Teresa Ricoy**, Federal Reserve Bank of Boston
- _[Maria.T.Ricoy@bos.frb.org](mailto:Maria.T.Ricoy@bos.frb.org)__ _
- (617) 973-3027